Top 5 Considerations When Using Federal Funds for ARPA projects 


Arik Bronshtein

May 10, 2022

This article provides a comprehensive guideline for writing a successful ARPA fund solicitation for local governments.

1. Be aware of ARPA fund requirements in competitive procurements

  • Solicitation documents (whether, RFP, RFQ, ITB, etc.) must acknowledge the use of federal funding for the contract.
  • If a federally funded procurement exceeds the $10k micro-purchase threshold, the MWBE steps listed below must be followed.  Per federal guidelines, procurements below the micro-purchase threshold do not require competition.  However, your agency's policy may require competition for procurements under $10,000.  
  • A single audit requirement is triggered by an expenditure of $750k or more funded by federal financial assistance. Learn more here.

To learn more, check out this article

2. Consider the eligible uses of ARPA funds

  • Revenue replacement for the provision of government services to the extent that revenue was reduced due to the COVID-19 public health emergency relative to revenues collected in the most recent fiscal year prior to the emergency.
  • COVID-19 expenditures or negative economic impacts of COVID-19, including assistance to small businesses, households, and hard-hit industries, and economic recovery.
  • Premium pay for essential workers.
  • Investments in water, sewer, and broadband infrastructure.

To learn more, check out the US Department of the Treasury

3. Know the restrictions of ARPA funds

  • Funds allocated to states cannot be used directly or indirectly to offset tax reductions or delay a tax or tax increase;
  • Funds cannot be deposited into any pension fund.
  • Funding must be spent by the end of the calendar year 2024.

If you have specific questions or need clarification, GFOA has launched an online portal to gather member questions to help shape engagement and solicit answers from the Administration.

4. Be prepared for a single audit

Federally-funded solicitations are stressful in part because of the possibility of an audit of spending. Therefore, keeping track of funds as they go out the door is extremely important, or future funding could be in jeopardy, especially since not all procurement people are aware of the extensive accounting that goes on with these kinds of funds. You can learn more about ARPA audits here.

5. Draft a clear and concise solicitation document

  • Think about what you really need and make sure that's the objective in your Request for Proposals/Qualifications or other solicitation
  • The importance of detailed solicitation cannot be overstated - it will save you time, effort, and money in the long run.
  • Write clearly and concisely. Do not include requirements that you don’t need and avoid rambling. Include relevant figures, schemes, and tables. Sometimes a picture is worth a thousand words. You want to make sure your requirements are clear.
  • Share and discuss the proposal draft with your colleagues in the agency, to ensure that they all agree with the final version to be submitted.

This article offers a general approach to solicitation writing that is applicable across a range of contexts, but it is out of our scope to provide tailored advice in specific disciplines or topics. In any case, you will need to strictly follow the procurement policy of the agency you work with.

If writing a solicitation using ARPA funds is still daunting, contact our team today to learn more about how UrbanLeap can help you through the federal funds process.

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