Five Things Every PHA Director Needs to Know About Federal Procurement

Procurement is where a lot of housing authorities get into trouble — not because directors are doing anything dishonest, but because the federal overlay on top of other purchasing rules is genuinely complicated, and nobody handed them a clear guide when they took the job. I've seen agencies lose federal funding, get flagged in HUD monitoring reviews, and spend years digging out of findings that all traced back to the same core procurement gaps. And it's not just findings on paper — I've seen HUD require agencies to repay federal funding out of non-federal sources when procurement actions couldn't be defended. That's real money coming out of your operating budget to cover a process failure.

It's worth being clear about what procurement actually is: it's the first step — the foundation of every contracting action your agency takes. How you solicit, evaluate, and award a contract determines whether that contract is defensible from day one. But procurement is only half the equation. Contract management — how you oversee performance, document changes, approve invoices, and close out the work — is equally nuanced and equally scrutinized. When HUD reviews your files, they're not just looking at how you awarded the contract. They're looking at everything that happened after. A clean procurement with sloppy contract administration is still a finding.

Here's what I tell every director I work with: procurement compliance is not about bureaucratic perfection. It's about building a system that protects your federal funding, protects your board from unnecessary risk, and gives you the confidence to execute contracts the right way every time. These five things are where to start.

1. Know which rulesets govern your procurement — and that the most restrictive one wins

Federal funds mean federal rules. Specifically, 2 CFR Part 200 and HUD Handbook 7460.8 REV 3 govern every procurement you make with operating subsidy and Capital Fund Program dollars. And if your agency administers a Housing Choice Voucher program, take note: applying federal procurement requirements to HCV administrative fees is new under the latest edition of HUD's procurement handbook — a change many directors aren't aware of yet.

Where it gets more complicated is when state or local funding is in the mix. Most housing authorities operate solely under federal rules, but some — particularly those structured as departments of a city or county government, or those that receive state or local funding — face additional procurement requirements layered on top. If that's your situation, the rule is the same as it's always been: when requirements conflict, you apply whichever is more restrictive. Always.

In practice, this can mean your effective procurement thresholds are lower than you think. If your state requires formal competitive bidding for goods above $90,000, that threshold governs — even though the federal simplified acquisition threshold is $250,000. Knowing exactly which ruleset applies to your agency, and at which dollar amount for which contract type, is the foundation of everything else.

2. Choosing the wrong procurement method is itself a violation

Most directors know they need to get quotes. Fewer understand that the method — not just the outcome — is what HUD reviews. There are five methods under 2 CFR 200: micro-purchase, small purchase, sealed bid, competitive proposal, and non-competitive. Each has specific triggers, documentation requirements, and conditions. Using the wrong one, even if you got a fair price, is a compliance finding.

The one that trips people up most often is professional services. Architect and engineer services, legal counsel, and similar engagements require qualifications-based selection — you evaluate firms on experience and capability, not price, and negotiate fee after you've identified the top-ranked firm. You cannot shortcut this by going to a firm you've worked with before, even if they do good work. The process has to be documented and defensible every time.

3. The file is the procurement

This is the one I repeat more than anything else: if it's not written down, it didn't happen. In federal procurement, that's not a best practice — it's the standard by which every dollar you spend will be measured.

When HUD or the Office of Inspector General reviews your procurement activity, they examine the file. Not your memory of how the procurement went. Not the contractor's performance record. The file. A well-executed procurement with a thin file is not defensible. The documentation has to be there — statement of work, cost estimate, quote log, debarment check, cost reasonableness determination, executed contract with federal clauses — and it has to be contemporaneous. An independent cost estimate dated after bids were received is not compliant. A debarment check run after the contract was signed is not compliant. Build the habit of creating the documentation as each step happens, not assembling it afterward.

4. Cooperative purchasing is a legitimate tool — but it requires due diligence

HUD explicitly endorses cooperative purchasing under 2 CFR 200.318(e). Piggybacking on another agency's competitively bid contract can meaningfully reduce your administrative burden for routine goods and services. But before you rely on any cooperative arrangement, you need to verify that the underlying contract was procured in a manner consistent with federal requirements. That means the lead agency ran a competitive solicitation, the contract was open to qualified vendors, and the pricing available to you represents economy and efficiency.

Document that evaluation in your procurement file before placing any order. A lot of agencies skip this step and assume that because a contract exists somewhere, they can use it. That assumption has generated findings. The verification is straightforward — it just has to happen and be documented.

5. You can start making progress right now, before anything else is in place

Procurement remediation can feel overwhelming when you're looking at the full picture. It doesn't have to be. There are things you can do this week that will put your agency on meaningfully better footing.

Pull every active contract and inventory what you have — what was procured, how it was awarded, when it expires, whether a compliant file exists. Run every current vendor through SAM.gov and confirm none are suspended or debarred. Build a 12-month procurement calendar that maps contract expirations against your board's meeting schedule so you stop reacting to renewals and start planning ahead of them.

None of that requires outside help. It requires a few hours and a spreadsheet. And it gives you the baseline you need to know what to fix first.

The agencies that recover from procurement findings fastest are the ones that start moving before they have everything figured out. Documented forward progress changes HUD's posture — from an oversight body focused on past deficiencies to a partner engaged with your corrective action plan. You don't need everything solved. You need to show you understand the issues and are working them.