Government and Public Sector Procurement Solutions
Introduction
Government agencies and public sector organizations operate under strict procurement regulations, compliance requirements, and transparency mandates that differ significantly from private sector business rules. Federal Acquisition Regulation (FAR), state procurement codes, competitive bidding requirements, minority-owned business participation goals, grant fund tracking, and public accountability standards require specialized validation logic.
Public sector procurement challenges include competitive bidding thresholds and processes, sole source justification documentation, small business and socioeconomic program compliance (DBE, MBE, WBE, VOSB), grant fund accounting and cost allocation, prevailing wage requirements (Davis-Bacon Act), buy American provisions, conflict of interest detection, and audit trail documentation for public transparency.
QUALIA Rule Engine enables government organizations to automate procurement compliance while maintaining the transparency and accountability required for public sector operations.
Government procurement requirements:
Competitive bidding threshold enforcement
Sole source justification and approval workflows
Small and disadvantaged business tracking
Grant fund segregation and compliance
Prevailing wage validation for public works
Buy American and domestic preference enforcement
Conflict of interest screening
Public records documentation and retention
Part 1: Competitive Bidding Requirements
Procurement Threshold Enforcement
Government procurement regulations require competitive bidding above specific dollar thresholds.
Validation Set: Purchase Order - Bidding Requirements - OnRelease
Rule 1: Enforce Competitive Bidding Threshold
Table: Purchase Header (38)
Condition:
[38:91] > 50000
AND [38:CustomProcurementMethod]
Action - Message:
Type: Error
Message:
COMPETITIVE BIDDING REQUIRED
Purchase Order: [38:3]
Vendor: [38:79]
Amount: $[38:91]
Federal/State procurement regulations require competitive bidding for purchases exceeding $50,000.
Required Process:
1. Prepare detailed specifications
2. Publicly advertise solicitation (minimum 21 days)
3. Receive and evaluate sealed bids
4. Award to lowest responsive, responsible bidder
5. Document evaluation criteria and selection
Competitive Bidding Methods:
- Invitation for Bid (IFB): Price-based selection
- Request for Proposal (RFP): Best value selection
- Request for Quotation (RFQ): Informal quotes (if under formal bid threshold)
Exceptions:
- Emergency procurement (requires justification)
- Sole source (requires written justification and approval)
- Cooperative purchasing agreements
Set Procurement Method to 'Competitive Bid' and enter solicitation number before proceeding.
Procurement Officer: [Buyer contact]
Reference: [Agency] Procurement Code § [Section]
Rule 2: Validate Solicitation Documentation
Condition:
[38:CustomProcurementMethod] is 'Competitive Bid'
AND [38:CustomSolicitationNumber]
Action - Message:
Type: Error
Message:
SOLICITATION NUMBER REQUIRED
Purchase Order: [38:3]
Procurement Method: Competitive Bid
Amount: $[38:91]
Competitive bids require documented solicitation process.
Required Documentation:
- Solicitation Number (IFB/RFP/RFQ number)
- Advertisement Date
- Bid Opening Date
- Number of Bids Received
- Bid Evaluation Documentation
- Award Justification
Enter solicitation number that documents competitive process.
Format: [FY]-[Type]-[Sequence]
Sole Source Justification
Rule 3: Require Sole Source Documentation
Validation Set: Purchase Order - Sole Source Approval - OnRelease
Condition:
[38:91] > 10000
AND [38:CustomProcurementMethod] is 'Sole Source'
AND [38:CustomSoleSourceJustification]
Action - Message:
Type: Error
Message:
SOLE SOURCE JUSTIFICATION REQUIRED
Purchase Order: [38:3]
Vendor: [38:79]
Amount: $[38:91]
Sole source procurement requires written justification demonstrating:
Valid Sole Source Reasons:
1. Only one source available
- Proprietary/patented product
- Sole manufacturer/distributor
- Required for compatibility with existing systems
2. Emergency/urgency
- Immediate need to prevent harm
- Temporary measure (follow-up bid required)
3. Federal/state grant requirement
- Specified vendor in grant award
- Grant compliance necessity
Required Justification Elements:
☐ Description of why sole source necessary
☐ Market research conducted
☐ Explanation why competitive bidding not feasible
☐ Attempts to find alternate sources
☐ Price reasonableness determination
☐ Department head approval
☐ Procurement officer approval
[IF([38:91] > 100000,
'Executive approval required for sole source > $100,000',
''
)]
Enter detailed sole source justification and obtain required approvals.
Template: [Link to sole source justification form]
Part 2: Small Business and Socioeconomic Programs
Minority and Disadvantaged Business Goals
Government contracts often include participation goals for certified disadvantaged businesses.
Validation Set: Purchase Order - DBE Participation - OnRelease
Rule 1: Track DBE/MBE/WBE Participation
Source References:
1. Vendor (23)
Link via: [38:4] = [23:1]
2. Project (Custom Table)
Link via: [38:CustomProject] = [Project:No]
Condition:
[Project:CustomDBEGoalPercentage] > 0
AND [23:CustomDBECertified] is false
AND [23:CustomMBECertified] is false
AND [23:CustomWBECertified]
Action - Message:
Type: Warning
Message:
DISADVANTAGED BUSINESS ENTERPRISE (DBE) GOAL
Project: [Project:Description]
DBE Participation Goal: [Project:CustomDBEGoalPercentage]%
This purchase order:
Vendor: [23:2]
Amount: $[38:91]
DBE Certified: No
MBE Certified: No
WBE Certified: No
Current Project DBE Participation:
Committed: $[Project:CustomDBECommitted]
Percentage: [Project:CustomDBECommitted / Project:CustomTotalValue * 100]%
Remaining to Meet Goal: [Project:CustomDBEGoalPercentage - Current%]%
Using non-certified vendor reduces DBE participation percentage.
Options:
1. Source from certified DBE/MBE/WBE vendor
2. Request vendor obtain DBE certification
3. Document good faith efforts to achieve DBE goals
4. Justify why certified vendor not available
Certified Vendor Directory: [State DBE directory URL]
Rule 2: Verify Current Certification Status
Condition:
[23:CustomDBECertified] is true
AND [23:CustomDBECertExpiration] < [T]
Action - Message:
Type: Error
Message:
DBE CERTIFICATION EXPIRED
Vendor: [23:2]
DBE Certification Expired: [23:CustomDBECertExpiration]
Vendor DBE certification expired [T - [23:CustomDBECertExpiration]] days ago.
Cannot count this purchase toward DBE participation goals with expired certification.
Required Actions:
1. Contact vendor to verify certification status
2. Obtain updated DBE certificate
3. Update vendor master with new expiration date
4. Verify certification with issuing agency
Certification Verification:
Agency: [23:CustomDBECertifyingAgency]
Certificate Number: [23:CustomDBECertNumber]
Small Business Set-Asides
Rule 3: Small Business Preference Enforcement
Validation Set: Purchase Requisition - Small Business Review - OnRelease
Condition:
[Requisition:Amount] > 3000
AND [Requisition:Amount] < 150000
AND [Requisition:CustomSmallBusinessReserve] is true
AND [Requisition:CustomVendorSizeCategory]
Action - Message:
Type: Error
Message:
SMALL BUSINESS SET-ASIDE REQUIREMENT
Requisition: [Requisition:No]
Amount: $[Requisition:Amount]
This requirement is set aside for small businesses only.
Small Business Criteria (Federal):
- Manufacturing: 500 employees or less
- Services: $7.5M - $41.5M annual receipts (varies by NAICS)
- Wholesale: 100 employees or less
- Retail: $8M annual receipts or less
Selected Vendor: [Vendor:Name]
Size Category: [Requisition:CustomVendorSizeCategory]
Options:
1. Select certified small business vendor
2. Remove small business set-aside designation (requires justification)
3. Split requirement if exceeds small business capacity
Small Business Vendor Search: [SBA vendor directory]
Part 3: Grant Fund Management
Fund Source Tracking and Restrictions
Federal and state grants have specific allowable cost restrictions.
Validation Set: Purchase Order - Grant Compliance - OnValidate
Rule 1: Validate Allowable Costs
Source References:
1. Grant (Custom Table)
Link via: [38:CustomGrantNumber] = [Grant:GrantNumber]
2. Item (27)
Link via: [PurchLine:6] = [27:1]
Condition:
[38:CustomGrantNumber] is not ''
AND [27:CustomCostCategory] not in [Grant:AllowableCostCategories]
Action - Message:
Type: Error
Message:
UNALLOWABLE COST FOR GRANT FUNDING
Grant: [Grant:GrantNumber] - [Grant:Description]
Grantor: [Grant:GrantorAgency]
Item: [27:3]
Cost Category: [27:CustomCostCategory]
Amount: $[PurchLine:Amount]
This cost category is not allowed under grant restrictions.
Grant Allowable Costs:
[LIST(Grant:AllowableCostCategories)]
Grant Unallowable Costs:
- Alcoholic beverages
- Entertainment
- Lobbying
- Fundraising
- General government expenses (unless specifically allowed)
[Grant:SpecificRestrictions]
Options:
1. Change funding source to non-grant funds
2. Select different item in allowed category
3. Seek grantor pre-approval for exception (document approval)
Grant Period: [Grant:StartDate] to [Grant:EndDate]
Remaining Grant Funds: $[Grant:BudgetAmount - Grant:CommittedAmount]
Reference: [Grant:ComplianceDocument]
Grant Administrator: [Grant:AdministratorContact]
Rule 2: Cost Allocation Compliance
Condition:
[38:CustomGrantNumber] is not ''
AND [38:CustomCostAllocationMethod] is ''
AND [Grant:RequiresCostAllocation]
Action - Message:
Type: Error
Message:
COST ALLOCATION REQUIRED
Grant: [Grant:GrantNumber]
Purchase Order: [38:3]
Amount: $[38:91]
This grant requires documented cost allocation methodology.
Cost Allocation Methods:
1. Direct Costs: Clearly identifiable to grant activities
Example: Equipment used solely for grant program
2. Indirect Costs: Allocated based on approved rate
Example: Facilities, utilities, administration
Your approved indirect rate: [Agency:IndirectCostRate]%
3. Shared Costs: Allocated based on benefit
Example: Shared staff time, multi-use equipment
Allocation basis: Time studies, usage logs, participant counts
Required Documentation:
- Cost allocation plan
- Time and effort reporting (for personnel)
- Basis for allocation percentages
- Approval from grant administrator
Enter cost allocation method and percentage before proceeding.
OMB Uniform Guidance 2 CFR 200 Subpart E - Cost Principles
Grant-specific allocation requirements: [Grant:AllocationPolicy]
Match Requirement Tracking
Rule 3: Grant Match Compliance
Validation Set: Invoice - Grant Match Validation - OnPost
Source References:
1. Grant (Custom Table)
Link via: [Invoice:CustomGrantNumber] = [Grant:GrantNumber]
Condition:
[Grant:RequiresMatch] is true
AND ([Grant:TotalInvoiced] + [Invoice:Amount]) / [Grant:TotalMatch] > [Grant:MatchRatio]
Action - Message:
Type: Error
Message:
INSUFFICIENT GRANT MATCH
Grant: [Grant:GrantNumber]
Match Requirement: [Grant:MatchPercentage]% ([Grant:MatchRatio] ratio)
Current Status:
Grant Funds Invoiced to Date: $[Grant:TotalInvoiced]
This Invoice (Grant Funds): $[Invoice:Amount]
Total Grant Funds: $[Grant:TotalInvoiced + Invoice:Amount]
Match Funds to Date: $[Grant:TotalMatch]
Required Match: $[[Grant:TotalInvoiced + Invoice:Amount] / [Grant:MatchRatio]]
Match Shortfall: $[[Required Match] - [Grant:TotalMatch]]
Match ratio would be: [Grant:TotalMatch / [Grant:TotalInvoiced + Invoice:Amount] * 100]%
Required ratio: [Grant:MatchPercentage]%
Cannot invoice additional grant funds until match requirement satisfied.
Acceptable Match Sources:
[IF([Grant:CashMatchRequired],
'- Cash match only (no in-kind)',
'- Cash contributions
- In-kind donations (at fair market value)
- Volunteer time (at approved rate)
- Donated equipment/facilities'
)]
Document and record match contributions before invoicing grant funds.
Match tracking: [Link to match documentation system]
Part 4: Prevailing Wage Requirements
Davis-Bacon Act Compliance
Public works projects require payment of prevailing wages to laborers and mechanics.
Validation Set: Project - Prevailing Wage Setup - OnInsert
Rule 1: Identify Covered Projects
Table: Job (167)
Condition:
[167:CustomProjectType] is in ('Construction', 'Renovation', 'Public Works')
AND [167:CustomFederalFunding] > 0
AND [167:CustomPrevailingWageApplies]
Action - Message:
Type: Warning
Message:
PREVAILING WAGE REQUIREMENTS MAY APPLY
Project: [167:3] - [167:Description]
Project Type: [167:CustomProjectType]
Federal Funding: $[167:CustomFederalFunding]
Total Project Cost: $[167:CustomTotalBudget]
Davis-Bacon Act applies to:
- Contracts over $2,000
- Federally funded or assisted
- Construction, alteration, or repair
- Public buildings or public works
If Davis-Bacon applies, contractors must:
1. Pay prevailing wages determined by Department of Labor
2. Submit certified payroll reports weekly
3. Post prevailing wage determination at worksite
4. Comply with apprentice/trainee ratios
5. Maintain payroll records (3 years)
Penalties for Non-Compliance:
- Contract termination
- Debarment from federal contracts (3 years)
- Withholding of funds
- Back wage payment to workers
Verify prevailing wage applicability and set flag accordingly.
Wage Determinations: [DOL wage determination database]
Project Location County: [167:CustomCounty]
Construction Type: [167:CustomConstructionType]
Wage Determination Number: [Enter WD number]
Rule 2: Validate Certified Payroll Submissions
Validation Set: Project - Payroll Compliance - Scheduled Weekly
Source References:
1. Contractor (Custom Table)
Link via: [167:CustomPrimeContractor] = [Contractor:No]
2. Certified Payroll (Custom Table)
Link via: [167:3] = [Payroll:ProjectNo]
Reference Filters:
[Payroll:WeekEnding] >= [T]
Condition:
[167:CustomPrevailingWageApplies] is true
AND [167:Status] is 'In Progress'
AND COUNT(Payroll:*) is 0
AND [167:CustomConstructionStartDate] < [T]
Action - Email:
To: project.manager@agency.gov, contractor.contact
CC: compliance.officer@agency.gov
Subject: OVERDUE - Certified Payroll Report Required
Body:
CERTIFIED PAYROLL PAST DUE
Project: [167:3] - [167:Description]
Contractor: [Contractor:Name]
Week Ending: [Last Friday]
Davis-Bacon prevailing wage projects require weekly certified payroll submission.
Required Form: WH-347 (Payroll Form)
Payroll Report Must Include:
- Name and social security number of each worker
- Labor classification for each worker
- Hours worked each day
- Total hours worked per week
- Hourly rate paid
- Gross wages earned
- Deductions made
- Net wages paid
- Statement of compliance signed by contractor
Submit certified payroll within 7 days of week ending.
Consequences of Non-Submission:
- Work stoppage until payroll submitted
- Payment withholding
- Contract compliance review
- Potential debarment
Submit payroll to: [Compliance officer email]
Payroll submission portal: [Portal URL]
Part 5: Buy American Requirements
Domestic Preference Enforcement
Federal projects require domestic procurement preference.
Validation Set: Purchase Order - Buy American - OnRelease
Rule 1: Enforce Buy American Provisions
Source References:
1. Vendor (23)
Link via: [38:4] = [23:1]
2. Item (27)
Link via: [PurchLine:6] = [27:1]
Condition:
[38:CustomFederalProject] is true
AND [27:CustomCountryOfOrigin] is not 'USA'
AND [27:CustomBuyAmericaWaiver]
Action - Message:
Type: Error
Message:
BUY AMERICAN REQUIREMENT VIOLATION
Project: [38:CustomProjectNo]
Item: [27:3]
Country of Origin: [27:CustomCountryOfOrigin]
Vendor: [23:2]
Buy American Act requires:
- Iron and steel: 100% domestic
- Manufactured products: Manufactured in U.S. from substantially domestic components (>55% domestic content)
This item does not meet Buy American requirements.
Exceptions/Waivers:
1. Non-Availability: Product not produced in U.S. in sufficient quantities
2. Public Interest: Domestic preference inconsistent with public interest
3. Unreasonable Cost: Domestic product cost exceeds foreign by >25%
To proceed with foreign product:
1. Request Buy American waiver
2. Document justification (non-availability, cost comparison, public interest)
3. Post waiver request for public comment (15 days)
4. Obtain approval from federal agency
5. Enter waiver approval number in system
Options:
- Source from domestic supplier
- Verify country of origin (may be incorrect)
- Request formal waiver with justification
Buy American applies to:
- Federal Highway Administration projects
- Federal Transit Administration grants
- EPA water infrastructure projects
- Federal-aid construction
Reference: 23 CFR 635.410 (Federal Highway)
Domestic Content Certificate: [Required from vendor]
Part 6: Conflict of Interest Prevention
Employee and Official Relationship Screening
Validation Set: Purchase Order - Conflict of Interest Check - OnRelease
Rule 1: Screen for Employee Relationships
Source References:
1. Vendor (23)
Link via: [38:4] = [23:1]
2. Employee (5200)
3. Vendor Relationships (Custom Table)
Link via: [23:1] = [VendorRel:VendorNo]
Condition:
EXISTS(VendorRel WHERE [VendorRel:RelationshipType] is in ('Owner', 'Officer', 'Employee', 'Spouse', 'Family')
AND [VendorRel:EmployeeNo]
Action - Message:
Type: Error
Message:
POTENTIAL CONFLICT OF INTEREST
Vendor: [23:2]
Purchase Order: [38:3]
Amount: $[38:91]
Employee Relationship Detected:
Employee: [VendorRel:EmployeeName]
Department: [VendorRel:EmployeeDepartment]
Relationship: [VendorRel:RelationshipType]
Ethics regulations prohibit employees from participating in matters affecting their financial interests or relationships.
Required Actions:
1. Document conflict of interest
2. Employee must recuse from procurement process
3. Obtain ethics officer review
4. Obtain written conflict waiver if permitted
5. File public disclosure (if required)
Prohibited Activities:
- Employee involvement in vendor selection
- Procurement decision participation
- Contract negotiation
- Payment approval
- Performance evaluation
Ethics Officer: [Contact information]
Conflict of Interest Policy: [Policy reference]
Summary and Key Takeaways
This guide covered government and public sector procurement validations:
Competitive bidding threshold enforcement and solicitation documentation
Sole source justification with detailed approval workflows
Small business programs DBE/MBE/WBE participation goal tracking
Grant compliance allowable costs, cost allocation, match requirements
Prevailing wage Davis-Bacon Act compliance and payroll monitoring
Buy American domestic preference enforcement with waiver management
Conflict of interest employee relationship screening and ethics compliance
Public sector compliance benefits:
Automated procurement regulation compliance
Audit trail for transparency and accountability
Socioeconomic program goal tracking
Grant fund segregation and compliance
Federal regulation adherence
Conflict of interest prevention
Documentation for public records
Implementation considerations:
Integration with grant management systems
Certified payroll tracking systems
DBE certification databases
Buy American product verification
Ethics and conflict of interest disclosures
Public transparency reporting
Related topics:
Blog 034: Rule Set Organization (organizing by funding source or regulation)
Blog 035: Rule Versioning (tracking regulation changes)
Blog 039: Financial Services Solutions (fund accounting patterns)
Blog 043: Construction and Project-Based Solutions (project cost tracking)
This blog is part of the QUALIA Rule Engine series for Microsoft Dynamics 365 Business Central. Follow along as we explore business rule automation patterns.
