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This webpage is on procurement guidance and requirements for all Child Nutrition Programs, including School Nutrition Programs (such as the National School Lunch Program, Special Milk Program, and School Breakfast Program), the Summer Food Service Program, and the Child and Adult Care Food Program. Procurement means the process of obtaining goods and/or services in accordance with applicable rules and regulations. Procurement rules ensure that program benefits are received by eligible schools and participants, and that taxpayer dollars are used effectively and efficiently, with no waste or abuse. Regulations require that all purchases made, whether funded wholly or in part with Child Nutrition Program funds, comply with all federal, state, and local procurement requirements.

All procurement transactions must be conducted in a manner that provides maximum open and free competition. Procurement procedures must ensure they do not foster noncompetitive practices between firms, do not create organizational conflicts of interest, and do not restrict or eliminate competition. Procurement must not place unreasonable requirements on firms, require unnecessary experience, or establish unrealistic bonding requirements. Cost plus a percentage of purchase is not an allowable system. There must be descriptions of all products purchased and identical instructions provided to all potential vendors.

Formal standards of conduct should govern the performance of officers, employees, and agents in the award and administration of contracts. These standards should provide that officers, employees, or agents should not solicit nor accept gratuities, favors, or anything of monetary value from contractors, potential contractors, or parties of sub-agreements.​

 Bid Protest

Any action that diminishes open and free competition seriously undermines the integrity of the procurement process and may subject any School Food Authority/ Sponsoring Organization to bid protests. School Food Authorities/Sponsoring Organizations are responsible for properly responding to protests and concerns raised by potential contractors. Pursuant to 2 CFR 200​, School Food Authorities/Sponsoring Organizations must have protest procedures in place to handle and resolve disputes relating to their procurements and must in all instances disclose information regarding a protest to the Illinois State Board of Education Nutrition Department.​

 Buy American

​School food Authorities are required to adhere to the Buy American provisions found in federal regulations (7 CFR 210.21(d)). Actions a SCHOOL FOOD AUTHORITY should take to comply with these requirements are as follows:

  • Include a Buy American clause in all food product procurement documents (product specifications, bid solicitations, purchase orders, etc.);
  • Monitor contractor performance;
  • Require suppliers to certify the origin of the product;
  • Examine product packaging for identification of the country of origin; and
  • Ask the supplier for specific information about the percentage of U.S. content in the food product.

Sample Buy American Clauses: The following clauses may be incorporated into bid solicitations, purchase orders, and/or product specifications for food products purchased for use in any of the Child Nutrition Programs.

  • The vendor shall purchase, to the maximum extent practicable, domestic commodities or products which are either an agricultural commodity produced in the United States or a food product processed in the United States substantially using agricultural commodities produced in the United States (U.S.).
  • The vendor shall certify the percentage of U.S. content in the products supplied to the School Food Authority.
  • The School Food Authority reserves the right to review purchase records to ensure compliance with the Buy American provision in 7 CFR 210.21(d)​.
  • The vendor shall provide nutrition facts labels and any other documentation requested by the School Food Authority to ensure compliance with U.S. content requirements.
  • In the event a product is not produced or manufactured in the U.S.; the cost of a U.S. produced product is significantly higher than foreign products; and/or the product is not produced or manufactured in the U.S. in sufficient and reasonably available quantities of a satisfactory quality, the vendor shall provide reasonable notice to the School Food Authority in advance of the product purchase. The School Food Authority may then issue approval of such product purchases on a case-by-case basis.

USDA policies and resources

 Code of Conduct

​Each School Food Authority/Sponsoring Organization is required to have written standards of conduct covering conflicts of interest that prohibit officers, employees and agents from soliciting or accepting gratuities, favors or anything of monetary value from contractors or parties of subcontracts.

  • Procedures must provide for disciplinary actions for violations by officers, employees, or agents. 

USDA policies and resources

 Contract Certification Forms

​The following certification forms must be included with all solicitations, contracts, and/or renewal agreements as described below. The forms must be signed by each bidder/contractor as indicated.

 Contracting Diversification

Contracting With Small and Minority businesses, Women's Business Enterprises, and Labor Surplus Area Firms

2 CFR 200.321 Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms.

  1. The non-Federal entity must take all necessary affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible. (b) Affirmative steps must include:
    1. Placing qualified small and minority businesses and women's business enterprises on solicitation lists;
    2. Assuring that small and minority businesses, and women's business enterprises are solicited whenever they are potential sources;
    3. Dividing total requirements, when economically feasible, into smaller tasks or quantities to permit maximum participation by small and minority businesses, and women's business enterprises;
    4. Establishing delivery schedules, where the requirement permits, which encourage participation by small and minority businesses, and women's business enterprises;
    5. Using the services and assistance, as appropriate, of such organizations as the Small Business Administration and the Minority Business Development Agency of the Department of Commerce; and
    6. Requiring the prime contractor, if subcontracts are to be let, to take the affirmative steps listed in paragraphs (1) through (5) of this section​.​


2 CFR 200.319 Competition

  1. All procurement transactions m​ust be conducted in a manner providing full and open competition consistent with the standards of this section. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Some of the situations considered to be restrictive of competition include but are not limited to:
    1. Placing unreasonable requirements on firms in order for them to qualify to do business;
    2. Requiring unnecessary experience and excessive bonding;
    3. Noncompetitive pricing practices between firms or between affiliated companies;
    4. Noncompetitive contracts to consultants that are on retainer contracts;
    5. Organizational conflicts of interest;
    6. Specifying only a “brand name" product instead of allowing “an equal" product to be offered and describing the performance or other relevant requirements of the procurement; and
    7. Any arbitrary action in the procurement process.
  2. The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract.
  3. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations:
    1. Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a "brand name or equivalent" description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated; and
    2. Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals.
  4. The non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period.​

 Emergency Procurement Guidance

7 CFR 200.320(c) Noncompetitive Procurement

If necessary, school food service staff can conduct emergency purchases to continue uninterrupted food service using noncompetitive procurement methods. This type of procurement or purchase is short-term in duration, which means these contracts cannot be renewed for the following school year. Emergency noncompetitive procurement methods are a standing flexibility and do not require a waiver.

If utilized, the school can award the purchase without requesting bids from multiple suppliers. We recommend negotiating a reasonable price, if possible.

When experiencing difficulties with obtaining the products you need/want, you can look at alternative emergency procurement options:

  • Purchase from a grocery store, wholesale/bulk food supplier, local business – you should still attempt to get the best prices you can, but we understand with limited time and resources SFAs will do their best.
  • Purchase produce from local farmers or farm cooperatives.
  • If you had multiple distributors and some dropped you and some are still delivering, see what other products the one(s) still delivering to you have and can provide to you. Discuss with them what they have and what they could get if you ordered enough of it and gave enough lead time.
  • Supplies: If you are having trouble getting supplies you need like disposable trays look into different color trays that are not as popular but available, look into bags, boxes, etc.

Emergency noncompetitive procurement(s) must be properly documented, and records must be maintained

For example, a log of all such purchases must be maintained and reviewed monthly by the School Food Service Department. The log of emergency purchases should record, at a minimum, the following:

  • Date
  • Contractor/supplier name
  • If available, contractor/supplier primary contact information and address
  • Contractor/supplier name of person supplying pricing
  • Description of product and/or service being purchased/contracted
  • Purchase amount/contract value
  • If applicable, duration of contract (contract term)
  • Reason for emergency

Here is a sample logExcel Document.

Once the emergency situation is over, and if future purchases are needed, the school will need to follow normal procurement guidelines for those purchases.​​​​


​The OMB guidance​ and U.S. Department of Agriculture (USDA) regulations at 2 CFR 200.313​PDF Document define “equipment" as tangible personal property (including information technology systems) having a useful life of one year or longer and a per-unit acquisition cost that equals or exceeds the lesser capitalization level established for financial statement purposes, $5,000, or a lower threshold set by local level regulations.​

During administrative reviews required by 7 CFR Parts 210, 225, 226 and procurement audits as required by 2 CFR 200.501, ISBE will review equipment purchases, ensuring  purchases were made based on either the approved equipment list or the ISBE prior approval process.  If equipment purchase(s) are deemed unallowable during any audit or review process, ISBE may disallow the purchase(s) and require the SFA/ Sponsoring Organization to replenish the non-profit school food account as appropriate.

Costs associated with remediation or repair to the facility (i.e. plumbing, heating, air conditioning, construction, etc) that would add to the permanent value of the facility are unallowable. These costs should be borne by the School Food Authority's/ Sponsoring Organization's general fund.

The purchase of equipment must follow local, state, and federal procurement rules and regulations. For more information visit our General Procurement website for more procurement resources including:

 Expenditures (School Nutrition Programs)

​Revenues must be used for expenses that are necessary for child nutrition program operation and improvement. This includes, but is not limited to, food, equipment, supplies, and program personnel. School nutrition program (SNP) funds must not be used for expenditures that are not directly related to the SNP operation and improvement even though the SNP account may be part of the SFA’s general fund. All expenditures must be reasonable, allowable, allocable, and adequately documented.

All financial transactions related to expenditures are subjected to the federal, state, and local procurement regulations. SFAs must use that guidance in addition to the guidance in this section to ensure that they are in compliance with all regulations related to financial management.

SFAs must use the following guidance to determine if an expense is allowable.

Direct or Indirect Costs
  • Direct Costs: Direct costs are defined as expenses that can be identified specifically with a particular cost objective used to meet a specific program goal or goals. For Example: Cost of food, staff salaries, supplies and materials related to the food service program.
  • Indirect Costs: Indirect costs are defined as expenses that are incurred for the benefit of multiple programs or functions and are also necessary for the general operation of the food service program, but these expenses cannot be directly attributable to the program. For Example: Costs associated with payroll services, building utilities, or facilities management.
  • Indirect Costs, Equipment and Capital Expenditures: Equipment and other capital expenditures are unallowable as indirect costs.
  • Indirect Rate, Public Schools: The indirect cost rate for public schools is approved annually by the Illinois State Board of Education (ISBE) School Finance Department. Additional information can be found on the ISBE Indirect Cost Rate website ( 
  • Indirect Rate, Private Schools and Residential Child Care Institutions (RCCIs): SFAs that are private schools and RCCIs should work with the agency regulating their organizations to get an approved indirect rate.
  • Indirect Cost, Consistent Application: It is unallowable to bill the nonprofit school food service account for indirect costs that were paid from the general fund in prior years unless an agreement exists to show that the SFA has been loaning the nonprofit school food service account funds to cover the indirect costs in one or more prior years.
Factors Affecting the Allowability of Costs
To determine if a cost is allowable the SFA must consider the following factors:

  • Reasonable: A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the purchase decision was made. In determining the reasonableness of a purchase cost, consideration must be given to the following issues:
    • Necessary: Is the cost generally recognized as ordinary and necessary for the operation of the food service program or the proper and efficient performance of the program?
    • Sound Business Practices and Regulations: Does the purchase meet the standards or regulations imposed by sound business practices; federal, state, local, tribal, and other laws and regulations; and terms and conditions of the SFA’s agreement with ISBE?
    • Fair Price: Is the cost in line with market prices for comparable goods or services for the geographic area?
    • Prudent: Have the individuals involved with the purchase acted sensibly in the situation or circumstance considering their responsibilities to the SFA?
    • Established Practices: Does this purchase significantly deviate from the SFA’s established practices and policies regarding such purchases?
  • Allocable: A cost is allocable to a particular program or other cost objective if the goods or services involved are chargeable or assignable to that program or cost objective based on the relative benefits received. In determining if a cost is allocable, consideration must be given to the following issues:
    • Purpose: Is the purchase cost aligned with the purposes described for the federal program for which the funds were awarded?
    • Shared Benefits: If the purchase benefits both the program and other non-program activities can the cost be distributed in proportionally to all programs that benefit from the purchase?
    • Necessary and Allowable: Is the cost necessary and allowable?
    • Indirect Costs: Will any indirect costs associated with this purchase be treated consistently across programs, including the determination of unallowable and allowable cost?
  • Consistency: The cost must be consistent with the policies and procedures that apply uniformly to both the federally financed and other activities of the SFA.
    • Ordinary and Common: Is the item or service generally considered an ordinary and a common expense for child nutrition programs?
    • Consistent Treatment: Is the cost for the item or service consistent with the way the SFA charges the costs for other programs for direct and indirect costs?
Is the Cost Allowable?
Using the criteria described in the “Necessary and Reasonable” and “Allocable” subsections in this section, the SFA determines if the cost of the item is allowable. The cost of an item or service is allowable if it meets the criteria described in the following questions:
  • Questions to Help Determine if a Cost Is Necessary, Reasonable, and Allocable
    • Could the SFA justify the purchase to USDA, ISBE, the media, or auditors? Would taxpayers deem the cost to be appropriate for the objectives of the food service program?
    • Would a prudent person consider the cost to be reasonable? Is the cost charged at a fair rate or do alternatives exist that may be more cost effective?
    • Does the item or service support the operation of the program? Does the item or service help the SFA to achieve program objectives?
  • Questions to Help Determine if a Cost Is Consistent with Federal, State, and Local Requirements
    • Is the payment method for the item or service consistent with the way other programs pay for direct and indirect costs?
    • Has the SFA made sure that the cost of the item or service is not associated with any cost or matching contributions for any other grant?
  • Questions to Help Determine if a Cost Is in Line with Accounting Principles
    • Is the use of the item or service recognized as ordinary an appropriate for food service program operation?
    • Is use of the item or service consistent with the Generally Accepted Accounting Principles (GAAP)?
    • Will payment for the item or service be made from Child Nutrition funds or from general funds?
    • Is the invoice and payment for the item or service adequately documented?
Capital Expenditures
A capital expenditure is an expense of $5,000 or more for an item that is to be used for general purposes and is intended to be used for multiple years. This includes equipment which means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000. For capital expenditures, SFAs must use the following guidance:
  • Prior Approval: Before making a capital expenditure, the SFA must submit a request to ISBE Nutrition Department; the SFA must have ISBE approval before purchasing the capital expenditure item.
  • Capital Improvements: Capital expenditures for improvements to land, buildings, or equipment that materially increase their value or useful life are unallowable as a direct cost except with the prior approval of ISBE Nutrition Department.
  • Charge Period: Capital expenditures must be charged in the period in which the expenditure is incurred unless ISBE approves a payment structure that spans multiple funding years.
  • Direct Cost: Capital expenditures must be coded as a direct cost; they cannot be classified as an indirect cost.
  • Procedure to Request a Capital Expenditure: To request a capital expenditure, SFAs must complete the capital expenditure formPDF Document.

 FFVP Procurement Information (School Nutrition Programs)

​When purchasing fresh fruits and vegetables or other allowable items, you may use your current vendor as long as proper procurement methods were already followed AND the items being purchased were included in the procurement specifications. This includes terms by which a “new" item may be purchased. If the item being purchased was NOT included in the original procurement specifications, terms were not included for “new" item purchases*, and the purchase will not total more than $250,000, informal purchase procedures must be followed and quotes MUST be obtained from a minimum of three prospective vendors (which may include your current vendor). If the purchase will exceed $250,000 annually, you must use formal competitive procurement methods. Refer to the School-Based Child Nutrition Programs Administrative HandbookPDF Document for details on determining the proper method of procurement.

However, if you have a Food Service Management Company (FSMC) contract you must carefully assess​ all contractual provisions allowing the FSMC to charge costs other than actual costs of fresh fruits and vegetable prior to executing a FFVP contract with the FSMC. This assessment will help ensure the allowability of the fixed fee component charged to the FFVP (or any other fees charged to the FFVP not related to the actual cost of the fresh fruits or vegetables) and that the resulting contract executed adheres to the FFVP requirements. Please note that, if provisions are to be added to an existing FSMC contract, the amendment must be evaluated by the State Agency prior to execution to determine whether the change is material.

*Since you cannot always foresee every single item that you may need during the course of a year or predict new items that may come on the market, you may include a method for handling new and other products in your original procurement specifications. For example, you may choose to use “vendor's cost + fee/case": $0.00–$10.00 + $1.00, $10.01–$20.00 + $2.00, and so forth. It is recommended that you research the marketplace to determine the best method for handling these types of purchases in your area.

Please contact ISBE staff at (800) 545-7892 with any questions regarding procurement for the Fresh Fruit and Vegetable Program.

 Geographic Preferences

​Federal regulations require procurements to be conducted in a manner that allows for free and open competition. Therefore, a School Food Authority/ Sponsoring Organization cannot impose geographic restrictions on potential bidders, with one exception. Geographic preference may only be applied to the procurement of unprocessed agricultural products which are locally grown and locally raised, and that have not been cooked, seasoned, canned, or combined with any other products. De minimis handling and preparation are allowable in order to present an agricultural product to a School Food Authority/ Sponsoring Organization in a useable form as long as the product retains its inherent character. Handling and preservation techniques that are permissible include: cooling, refrigerating, freezing, washing, packaging (such as putting eggs in a carton), vacuum packing and bagging (such as placing vegetables in a bag), drying/dehydration, applying high water pressure or “cold pasteurization", butchering livestock, fish and poultry, pasteurizing milk, and adjusting the size through size reduction made by peeling, chopping, cutting, slicing, dicing, grinding, and shucking.

While a geographic preference may be used to encourage the purchase of locally grown and locally raised products by enabling School Food Authority's/ Sponsoring Organizations to grant an advantage to local growers, this provision does not eliminate the requirement for procurements to be conducted in a manner that allows for free and open competition as noted previously. In addition, while School Food Authority's/ Sponsoring Organizations are permitted to apply a geographic preference for the procurement of locally grown and locally raised unprocessed agricultural products, School Food Authority's/ Sponsoring Organizations are not required to do so. The School Food Authority/ Sponsoring Organization  has the discretion to determine whether and how a geographic preference meets its needs, but must keep in mind that for all procurements, whether formal or informal, bids/quotes must be obtained from a minimum of three prospective vendors.

USDA policies and resources

 Group Purchasing Organization

​Participating in intergovernmental and inter-agency agreements can offer greater economy and efficiency for procurement or use of common or shared goods or services (2 CFR 200.318(e)), Program operators participating in these agreements must still conduct competitive procurement in accordance with 2 CFR Part 200.318-.326 and applicable program regulations and guidance Specifically, Program operators must ensure all:

  • Costs paid from the nonprofit food service account are necessary, reasonable, allocable, and otherwise allowable per 2 CFR 200.403 and the applicable cost principles in 2 CFR 200, subpart E.
  • Procurements are conducted in a manner maximizing full and open competition consistent with federal procurement standards in 2 CFR 200.318-.326 and in applicable Program regulations. 

Failure to competitively procure goods and services is a violation of federal regulations and may result in delays, disputes, findings of noncompliance, and costs being disallowed.

USDA policies and resources

 Material Change(s) to a Contract


A material change is defined as a change that, had other bidders/proposers known of the change at the time of they submitted their responses, would have caused them to bid/propose differently. 2 CFR 200.324(b)(5) identifies that when a contract modification changes the scope of a contract or increases the contract amount by more than the Simplified Acquisition Threshold (currently set at $250,000), the SFA must make available upon request for review, procurement documents such as requests for proposals or invitations for bids, and/or independent cost estimates. The State Agency (ISBE) must then determine if the amendment is approved for a one-year renewal, or if a re-solicitation is required at the end of the current contract period. State or local acquisition thresholds may be more restrictive, and that the most restrictive threshold applies.

All amendments must be documented, reviewed, and approved by the State agency (ISBE) prior to execution 2 CFR 210.16(a)(10) to ensure that the SFA has not made a material change to the contract and has incorporated all State agency required changes into the amendment. No modification or amendment to this contract shall become valid unless it is made in writing, signed by all parties, and receives prior approval by the State agency (ISBE). Regulations governing procurement in the NSLP, SBP, and SMP, require State agencies to review contracts (and supporting documentation) prior to the execution (i.e. prior to signature) of the contract to ensure that contracts containing unallowable terms and conditions and amendments that may be material in nature are removed prior to the contract being executed. Unallowable costs shall not be paid from the nonprofit food service account.

Some amendments to contracts that may be considered material and thus require a re-solicitation include:

  • Adding other SFAs, or unaffiliated schools (to include new schools to be constructed within the SFA during the contract duration and potential contract renewals) not included in the original solicitation.
  • Adding more Child Nutrition Programs not included in the original solicitation and contract.
  • Changing a fixed price/meal fee for management and/or administration, or a fixed price/meal fee tied to a standard index, such as the Consumer Price index, without a price adjustment clause.
  • Adding the requirement for the Vendor/ Food Service Management Company to cover the cost of labor, or to transition the cost of labor from the SFA to the Vendor/ Food Service Management Company without a provision in the original solicitation and contract that includes the labor transition with specifics for how this will occur.
  • Adding requirements for the Vendor/ Food Service Management Company to purchase/invest in equipment, point of service system, or remodel/renovate facilities for the SFA that were not planned, specified, or included in the original solicitation and contract.
  • Changing the value of a guaranteed return, or failure to achieve a breakeven status, or qualifying these by limits in relation to the value of the administrative/management fee(s).
    • Any guaranteed return promised by the Vendor/ Food Service Management Company must remain in the nonprofit food service account. If the contract contains such guarantees, the contract should also contain language that ensures that the Vendor/ Food Service Management Company bears responsibility for failure to meet those goals. Returns cannot be contingent upon multi-year contracts as Vendor/ Food Service Management Company contracts are for one year with the option for up to four one-year renewals. If the option for renewal is to be considered each year, the best practice is to specify in the original solicitation the SFAs expectations of the guarantee for each renewal year option, if changes in the guarantee will be allowed.

While this list is not exclusive of changes SFAs and Vendors/ Food Service Management Company’s often consider during a contract renewal option, these changes are amendments to the contract, not a contract renewal. Therefore, State agency (ISBE) and SFA staff must take great caution not to approve contract amendments when these changes should be re-solicited. Contract renewals are extensions of the original contract based on the terms and conditions of the original solicitation; contract amendments that change the scope of the contract or exceed the value of the Simplified Acquisition Threshold (valued at $250,000), are subject to approval by the State agency (ISBE) or FNS (USDA).​​

 Procurement Methods

​The primary contracting methods used by the federal government are micro-purchasing, small purchase, and competitive sealed bidding.

When procuring goods and services for the Child Nutrition Programs, a School Food Authority/ Sponsoring Organization must determine whether they must use an informal or formal procurement method. It is important to understand and then identify which method best meets the needs of your individual food service operation. Informal procurement occurs when a School Food Authority's/Sponsoring Organization's purchases fall at or below the federal, state, or local small purchase threshold (whichever is more restrictive). The informal procurement method is commonly referred to as procurement under the small purchase threshold or simplified acquisitions. Although this method is permitted when the amount of a purchase falls at or below the most restrictive small purchase threshold, a School Food Authority/ Sponsoring Organization could choose to use the formal procurement method (see below for more information) rather than the informal procurement method.


  • Micro-purchasing: Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed $ 10,000.
    • Micro-purchases may be awarded without soliciting competitive price or rate quotations, if the Program Operator considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. (2 CFR 200.320(a)(1)(ii))
    • Should distribute micro-purchases equitably among qualified suppliers.
    • Simple purchase.
    • Maintain all documents on file for potential audit purposes.
    • Per USDA guidance “Updates to the Federal Micro-Purchase Threshold in 2 CFR 200.320(a)(1)  SP 02-2022,” program operators have the discretion to utilize the micro-purchase method of procurement for purchase up to $50,000 if specific criteria are met. Please note that in Illinois public schools this option is not applicable to Food Service Management Company (FSMC) contracts. All FSMC contracts estimated at $25,000 or greater must be formally procured utilizing the three-step process described on our website.
    • Government-wide regulations at 2 CFR 200.320(a)(l)(iii) now provide that program operators are “responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk and its documented procurement procedures.”  To assist, please complete the “Increased Micro-Purchase Threshold Worksheet​Word Document” and maintain on file.
  • Small purchase: Procurement by small purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed $ 250,000 (or a lower amount as required by local/district board policy). Also known as simplified acquisition or informal purchase. 
    • In applying the small purchase threshold, the School Food Authority/Sponsoring Organization must adhere to the most restrictive, lowest limit set.
    • Develop a written purchase description of the services/items being solicited;
    • Solicit quotes/bids from three or more potential vendors based on the purchase description; document vendor names along with the date and method of contact - be sure to maintain free and open competition;
    • Record all quotes/bids received and any notification received from vendors declining to bid;
    • Evaluate the quotes for conformance to the purchase description;
    • Award the purchase/contract (record the justification for the award); and
    • ​Maintain all documents on file for potential audit purposes. 


  • Competitive Sealed Bid/ Invitation for Bid (IFB): When the value of the purchase is expected to exceed the small purchase threshold of $250,000 (or a lower amount as required by local/district board policy), School Food Authorities/Sponsoring Organizations must use the competitive sealed bid/invitation for bid method.

    The $250,000 amount is determined by examining the manner in which food has been purchased in the past. If using vendors that supply only one particular type of product, such as bread, milk, or meat, the competitive bid process must be implemented when the annual amount of purchases is in excess of $250,000 per type of product. Exception: When soliciting a Food Service Management Company (FSMC) contract, School Food Authorities/Sponsoring Organizations must use the competitive sealed bid/invitation for bid method regardless of the purchase threshold.

    When multiple vendors, such as full-line vendors, supply various items such as canned, frozen, and dry goods, the total annual purchase amount for all the vendors must be added together. If this amount is in excess of $250,000 annually, the food must be competitively bid.

    • Competitive Sealed Bidding (2 CFR 200.320 ( c ) are bids that are publicly solicited, and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. Also known as Invitation for Bid (IFB).
    • Sealed Bids must be directly solicited to at least five (5) known suppliers
    • Providing suppliers sufficient response time prior to the date set for public opening of the bids, for all Organizations,
    • The invitation for bid must be publicly advertised for at least 10 days before the bid date.
    • The invitation for bid, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond
    • All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly
    • A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder
    • Any or all bids may be rejected if there is a sound documented reason.

​ USDA policies and resources

 Procurement Procedures

​Each School Food Authority/Sponsoring Organization is required to have its own documented procurement procedures in place that reflect applicable state and local laws and regulations, provided that procurements made with Child Nutrition Program funds adhere to the standards set forth in 2 CFR 200.318(a).

  • The School Food Authority/ Sponsoring Organization must have oversight procedures and documentation.
  • The School Food Authority/ Sponsoring Organization must have written standards of conduct covering conflicts of interest that prohibit officers, employees and agents from soliciting or accepting gratuities, favors or anything of monetary value from contractors or parties of subcontracts.
  • The procedures must avoid acquisition of unnecessary or duplicate items.
  • The School Food Authority/ Sponsoring Organization must award contracts only to responsible contractors.
  • The School Food Authority/ Sponsoring Organization must maintain records sufficient to detail the history of the procurement.
  • School Food Authority/Sponsoring Organization must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold, including contract modifications.   
  • School Food Authority/Sponsoring Organization must take steps to assure that small, minority and women's businesses enterprises and labor surplus firms are used when possible.​

USDA policies and resources

 Procurement Review (School Nutrition Programs)

​The purpose of a procurement review is for state agencies to ensure the procurement process conducted by School Food Authorities (SFAs) complies with program and the government-wide procurement standards. Procurement standards must be conducted in a manner providing full and open competitive (2 CFR 200.319(a)).

Why is there a Procurement Review?

  • Procurement is a major responsibility of each SFA – almost half of the SFA's reimbursement is used on the procuring of goods and/ or services.
  • Procurement has a major impact on financial stability of the SFA's nonprofit school food service account.
  • Not just another “food service" requirement. 2 CFR 200 applies to ALL federal grants and most SFAs receive Federal grants other than just from the Child Nutrition Program.

Overview of a Procurement Review

  • Obtaining the most economical purchase should be considered in all purchases when using Federal funds.
  • All Procurement transactions must be conducted in a manner that provides maximum open and free competition.
  • Federal, state and local laws and regulations specify the procurement method, terms and conditions SFAs must follow to competitively procure goods and services, award contracts, and oversee contractor performance, (2 CFR 200.318(b)).
  • State agencies are required to ensure that SFAs comply with applicable provisions through audits, administrative reviews, technical assistance, training guidance materials and by other means (7 CFR 210.169(a)(3)).

State Agency Review Process

  • Includes reviewing the SFA's procurement documentation and assessing compliance with the procurement standards.
  • The State Agency (ISBE) has the discretion to conduct the procurement review off-site, on-site, or off-site/on-site as long as all procurement documentation needed to conduct the review can be obtained by the State Agency.
  • The procurement review may be conducted as part of the Administrative Review, or as a separate review, as determined by the State Agency. State Agencies must conduct a procurement review on all SFAs once in each review cycle.
  • Once review is complete, the State Agency (ISBE) may provide technical assistance and establish findings and required corrective action, as applicable.

Snapshot of a Procurement Review

The State Agency, the Illinois State Board of Education (ISBE), will conduct the procurement review using a step-by-step approach. From notifying each SFA of a procurement review to closing the review, each step is intended to assess compliance while providing technical assistance in the area of procurement.

Overall, the State agency will:

  • Notify SFA of a procurement review
  • Schedule the review
  • Send the SFA a Procurement Tool to complete and request a list of documentation needed to conduct the review
  • Conduct the review either on-site or off-site, or both
  • Report review results with the SFA
  • Require corrective action, as applicable
  • Review and approve the corrective action, as applicable
  • Close the review

What can you do to prepare?

  • Conduct compliant procurement processes
  • Ensure you have written, detailed procurement procedures
  • Ensure you have a compliant code of conduct
  • Incorporate language in your procurement procedures, solicitations and contracts for food specification to ensure compliance with the Buy American provision
  • Monitor contractors for compliance with specification, terms, and conditions of contracts
  • Review your procurement process and procedures annually

USDA policies and resources

 Rules and Regulations


  • School Food Authority/ Sponsoring Organizations may set more restrictive purchasing thresholds per board/local policy and documented in written procurement procedures.



USDA policies and resources

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