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​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.​

The Buy American provision requires school food authorities to purchase, to the maximum extent practicable, domestic commodities or products. This provision supports the mission of the Child Nutrition Programs, which is to serve children nutritious meals and support American agriculture. Program regulations that govern this provision apply to school food authorities that operate the National School Lunch and/or School Breakfast Programs and are found at 7 CFR 210.21(d) and 7 CFR 220.16(d), respectively.

Actions a School Food Authority (SFA) must 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.
• Ask the supplier for specific information about the percentage of U.S. content in the food product.

Definitions:

• Domestic commodity or product means  (A) An agricultural commodity that is produced in the United States; and (B) A food product that is processed in the United States substantially using agricultural commodities that are produced in the United States.
• Substantially using agriculture commodities that are produced in the United States means over 51 percent of a food product must consist of agricultural commodities that were grown domestically. 
• A meal component means one of the food groups which comprise reimbursable meals. The meal components are fruits, vegetables, grains, meats/meat alternates, and fluid milk. A meal component is considered an agricultural commodity.

Exceptions:

As per, 7 CFR 210.21(d)(5): The purchase of foods not meeting the definitions outlined in 7 CFR 210.21(d)(1) is only permissible when the following criteria are met:

1. The school food authority determines that one of the following limited exceptions is met:
   1. The product is listed in the Federal Acquisitions Regulations (FAR) at 48 CFR 25.104 and/or is not produced or manufactured in the U.S. in sufficient and reasonably available quantities of a satisfactory quality; or
   2. Competitive bids reveal the cost of a United States product is significantly higher than the non-domestic product.
2. Non-domestic food purchases (those that do not meet the definition of domestic commodity or product, as defined in section 8.5 above and in 7 CFR 210.21(d)(1)) must not exceed the following caps by the established deadlines:
   1. By July 1, 2025, non-domestic food purchases must not exceed 10 percent of total annual commercial food costs that a school food authority purchases per school year.
   2. By July 1, 2028, non-domestic food purchases must not exceed 8 percent of total annual commercial food costs that a school food authority purchases per school year.
   3. By July 1, 2031, non-domestic food purchases must not exceed 5 percent of total annual commercial food costs that a school food authority purchases per school year.
3. School food authorities must maintain documentation, except when the item purchased is found on the FAR at 48 CFR 25.104 when using an exception under paragraph (d)(5)(i) of this section (and in section 8.6(i) above).
4. School food authorities must maintain documentation, to demonstrate that when using an exception under paragraph (d)(5)(i) (and in section 8.6(i) above) of this section their non-domestic food purchases do not exceed the annual threshold specified in paragraph (d)(5)(ii) of this section (and in section 8.6(i) above).

In the event a domestic product is not available, the Vendor/ Company must:

• Requests consideration from SFA (written documentation require) on the use of domestic alternative foods before approving an exception.
• Document the use of a non-domestic food exception when competition reveals the cost of domestic is significantly higher than non-domestic food.
• Document the use of a non-domestic alternative food due to the domestic food not produced or manufactured in sufficient and reasonable available quantities of a satisfactory quality.
• A sample exception form is the “Buy American – Record of Exception."

USDA POLICIES AND RESOURCES

• Buy American - Summary Presentation 
  
• SP38-2017: Compliance with and Enforcement of the Buy American Provision in the NSLP
• SP32-2019: Buy American and the Agriculture Improvement Act of 2018
• SP23-2024: Buy American Provisions Related to the Final Rule Titled, Child Nutrition Programs: Meal Patterns Consistent With the 2020-2025 Dietary Guidelines for Americans
• USDA Buy American Fact Sheet
• Sample Buy American Procurement Clauses​​
  

Each Program Operator is required, as per 2 CFR 200.318(c), to develop and implement a written code of conduct designed to govern the performance of employees engaged in procurement. 

This code of conduct must prohibit employees from soliciting gifts, travel packages, and other incentives from prospective contractors. In addition, the code of conduct must prohibit an employee from participating in the selection, award, and administration of any contract to which an entity or certain persons connected to them, have financial interest. The code of conduct must also provide for Child Nutrition Programs operators to set standards when financial interest is not substantial, or the gift is an unsolicited item of nominal value and may be acceptable. Finally, the code of conduct must provide for disciplinary actions to be applied in the event the standards are violated.

USDA Policies and Resources

• Policy Memo: Written Codes of Conduct and Performance of Employees Engaged in Award and Administration of Contracts
• Sample Code of Conduct Template (USDA) – This is an optional document to use if written procedures do not currently exist. This document is a sample and is not intended to be all-inclusive. This document does not replace pre-issuance contracts with vendors and Food Service Management Companies as required by the Illinois State Board of Education. The program operator is ultimately responsible to ensure that the local procurement procedures complies with all federal regulations, state rules and regulations, and local procurement policies. ​
  

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 offeror/contractor as indicated.

• Bid-Rigging Certification (68-65)​
  Must be included in all solicitations and contracts. Do not use for contract renewals. Each offeror must submit the signed form certifying the offeror has not been barred from bidding on a public contract as a result of either the bid-rigging or bid rotating statutes.
• Certificate of Independent Price Determination (68-66)​
  Must be included in all solicitations and contracts. Do not use for contract renewals. Each offeror must submit the signed form certifying the offeror has independently determined all prices offered. The Program Operator must also sign the form certifying that no Program Operator representative has taken action that may have jeopardized the independence of the offer.
  
• Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion - Lower Tier Covered Transactions (85-34N)
  If the estimated contract cost is $25,000 or more, include this form. This form must be signed by the contractor and submitted with all offers and annual contract renewals, when applicable.
  
• Certificate Regarding Lobbying - Contracts, Grants, Loans and Cooperative Agreement (85-36N)​
  If the estimated contract cost is over $100,000, include this form. This form must be signed by the contractor and submitted with all offers and annual contract renewals, when applicable.
  
• Disclosure of Lobbying Activities (85-37N) ​​
  If the estimated contract cost is over $100,000, include this form. This form must be signed by the contractor and submitted with all offers and annual contract renewals, when applicable.
  

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 under the Federal award m ust be conducted in a manner providing full and open competition and is consistent with the standards of this section and 2 CFR 200.320. 
   
   
2. 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. 
   
   
3. Examples of 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. 
   
   
4. The recipient or subrecipient must have written procedures for procurement transactions. These procedures must ensure that all solicitations:
1. Are made in accordance with 2 CFR 200.319(b);
   
2. Incorporate a clear and accurate description of the technical requirements for the property, equipment, or service being procured. The description may include a statement of the qualitative nature of the property, equipment, or service to be procured. When necessary, the description must provide minimum essential characteristics and standards to which the property, equipment, or service must conform. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to clearly and accurately describe the technical requirements, a “brand name or equivalent" description of features may be used to provide procurement requirements. The specific features of the named brand must be clearly stated; and
3. Identify any additional requirements which the offerors must fulfill and all other factors that will be used in evaluating bids or proposals. 
   
   
5. The recipient or subrecipient must ensure that all prequalified lists of persons, firms, or products used in procurement transactions are current and include enough qualified sources to ensure maximum open competition. When establishing or amending prequalified lists, the recipient or subrecipient must consider objective factors that evaluate price and cost to maximize competition. The recipient or subrecipient must not preclude potential bidders from qualifying during the solicitation period. 
   
   
6. To the extent consistent with established practices and legal requirements applicable to the recipient or subrecipient, this subpart does not prohibit recipients or subrecipients from developing written procedures for procurement transactions that incorporate a scoring mechanism that rewards bidders that commit to specific numbers and types of U.S. jobs, minimum compensation, benefits, on-the-job-training for employees making work products or providing services on a contract, and other worker protections. This subpart also does not prohibit recipients and subrecipients from making inquiries of bidders about these subjects and assessing the responses. Any scoring mechanism must be consistent with the U.S. Constitution, applicable Federal statutes and regulations, and the terms and conditions of the Federal award.
    
7. Noncompetitive procurements can only be awarded in accordance with 2 CFR 200.320(c).​​
   

7 CFR 200.320(c) Noncompetitive Procurement

If necessary, the program operator can conduct an emergency purchase(s) 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. Emergency noncompetitive procurement methods are a standing flexibility and do not require a waiver.

If utilized, the program operator can award the purchase without requesting bids/quotes from multiple suppliers. It is strongly recommended to “shop around" for the lowest price or negotiating a reasonable price, when possible.

When experiencing difficulties with obtaining the products needed, the following alternative emergency procurement options are available:

• 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 program operators 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 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 log.

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

Contract with a Food Service Management Company?
If an emergent situation occurs pertaining to contracting with a Food Service Management Company (FSMC)/ Vended Meals Company, you must contact ISBE staff at (217) 782-2491 or toll free in Illinois at (800) 545-7892 prior to starting the noncompetitive procurement process.

USDA Policies and Resources

• SP 23-2021: Q&A for Child Nutrition Programs Emergency Procurement Due to Supply Chain Disruptions ​
  

The OMB guidance and U.S. Department of Agriculture (USDA) regulations at 2 CFR 200.313 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, $10,000, or a lower threshold set by local level regulations.

During administrative reviews required by 7 CFR 210, 7 CFR 215, 7 CFR 225, and 7 CFR 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.

All equipment purchased must be deemed necessary, reasonable and allocable (2 CFR 200.403, 2 CFR 200.404, 2 CFR 200.405) for proper and efficient performance and administration of the Child Nutrition Programs (CNP) prior to purchasing.

• Purchasing Equipment Process Overview
• ISBE Pre-Approved Equipment List
• Equipment Purchase Attestation Form (for equipment purchased on the pre-approved list)
• Equipment Purchase/Capital Expenditure Request Form (for equipment purchased NOT on the pre-approved list)

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:

• Procurement resources
• Procurement rules, regulations, and Q&As
• Other general procurement requirements
• Procurement Method Fact Sheets
• ICN Resource: Facility Design and Equipment Purchasing for School Nutrition Programs​
  

The purpose of the Fresh Fruit and Vegetable Program Grant is to increase fresh fruit and fresh vegetable consumption in elementary schools that participate in the National School Lunch Program (NSLP). Priority is given to elementary schools based on free and reduced eligibility.

The FFVP program is different from the fresh produce that is a meal component of the School Breakfast and Lunch Programs and is also different from the Department of Defense (DoD) Fresh Fruit and Vegetable Program.

If awarded the FFVP grant, you may use your current vendor to purchase allowable items, as per the grant, 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 and terms were not included for “new" item purchases then the proper procurement method must be followed to purchase FFVP grant allowable items.

Contract with a Food Service Management Company?
Prior to executing a FFVP contract with a FSMC, the SFA must carefully assess all contractual provisions allowing the FSMC to charge costs other than actual costs of fresh fruits and vegetables. The purpose is to ensure adherence to the cost limitations placed on the FFVP (i.e., the requirement that administration costs not exceed 10% of the overall grant). It is recommended that the SFA assess each bid or proposal received from FSMCs in order to determine 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). This type of careful review will help ensure that the resulting contract executed by a SFA adheres to FFVP requirements. Moreover, a SFA must ensure contracts with FSMCs require the FSMC to provide full documentation of allowable costs. This documentation must clearly outline the allocation of costs charged to the FFVP (i.e., amounts charged for labor, administrative fees, and actual costs of fresh fruits and vegetables, etc.). The SFA should then use this information provided by the FSMC as a basis for its reimbursement claim under the FFVP. If the FSMC is unable or unwilling to provide this information, the SFA has two choices: it must consider either running the FFVP separately from its existing FSMC contract; or relinquishing its grant funding. 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.

Please contact ISBE staff at (217) 782-2491 or toll free in Illinois at (800) 545-7892 with any questions regarding the Fresh Fruit and Vegetable Program Grant.

USDA POLICIES AND RESOURCES

• USDA's Fresh Fruit and Vegetable Program - Handbook for Schools​
  
• SP 33-2012: Fresh Fruit and Vegetable Program Fees in FSMC Contracts​
  

​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

• Applying Geographic Preference in Procurements for the Child Nutrition Programs
• Procurement Geographic Preference Questions and Answers​
• Procurement Geographic Preferences Questions and Answers Part II
• Geographic Preference Fact Sheet
  

​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

• USDA Clarification on Group Purchasing Organizations 
• Q&A: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-Party Services
• Procurement of Foods: Cooperative Purchasing Groups
  

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).​​

​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.

INFORMAL

• 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 this option is not applicable to Food Service Management Company (FSMC) contracts. All FSMC contracts 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 Annual Self-Certification 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. 
  

FORMAL

​ USDA policies and resources

• SP02-2022 CACFP 03-2022 SFSP 01-2022: Updates to the Federal Micro-Purchase Threshold in 2 CFR 200.320(a)(1)​​
  
• SP20 CACFP074 SFSP06-2019: Federal Micro-Purchase and Simplified Acquisition Thresholds
• SP04 SFSP01 CACFP04-2018: Market Basket Analysis Memo​​​​
  

​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

• SP02-2016; CACFP02-2016; SFSP02-2016: Questions and Answers on the Transition to and Implementation of 2 CFR Part 200
• Below is an optional document to use if written procedures do not currently exist. This document is a sample and is not intended to be all-inclusive. This document does not replace pre-issuance contracts with Vendors and Food Service Management Companies as required by the Illinois State Board of Education. The School Food Authority/Sponsoring Organization is ultimately responsible to ensure that the local procurement procedures complies with all Federal Regulations, State Rules and Regulations, and local procurement policies. 
  
• Sample Procurement Procedures: SFSP/CACFP (ISBE)
  
• Sample Procurement Procedures: SNP (ISBE)
  
• Sample Procurement Procedures: SNP (ADE)​​
  ​
  

​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
• DOCUMENT! DOCUMENT! DOCUMENT!
• 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

• SP 33-2019: USDA Procurement Tool Guidance
  
• Introduction to the Procurement Review Tool​​
  
• USDA Procurement Tool
• ISBE Back to School Procurement Trainings​
  
• Sample Vendor Paid List/Summary of Vendors 
  
• Below are optional documents to use if written procedures do not currently exist. This document is a sample and is not intended to be all-inclusive. This document does not replace pre-issuance contracts with Vendors and Food Service Management Companies as required by the Illinois State Board of Education. The School Food Authority/ Sponsoring Organization is ultimately responsible to ensure that the local procurement procedures complies with all Federal Regulations, State Rules and Regulations, and local procurement policies.​
  
• Sample Code of Conduct Template (USDA)
  
• Sample Procurement Procedures: SNP (ISBE)
  
• Sample Procurement Procedures: SNP (ADE)​​​​
  

• Procurement in the 21st Century (ICN)​​
  
• ISBE Back to School Procurement Trainings​​​
• USDA Guide to Procuring Local Foods for Child Nutrition Programs
• Equipment Purchasing and Facility Design for School Nutrition Programs
• The Institute of Child Nutrition
• USDA Food and Nutrition Service
• Procurement Practices Influencing Programs Operating within the Guidelines of the CACFP
  

​​Local

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

State

• 105  ILCS 5/10-20.21: The Illinois Public School Code on Contracts
  

Federal

• 2 CFR 200: Uniform Administrative requirements, Cost Principles and Audit Requirements for Federal Awards
• 7 CFR Part 210: National School Lunch Program
• 7 CFR Part 215: Special Milk Program
• 7 CFR Part 220: School Breakfast Program
• 7 CFR Part 225: Summer Food Service Program
• 7 CFR Part 226: Child and Adult Care Food Program

USDA policies and resources

• SP/CACFP/SFSP 02-2010: Procurement Questions
  
• USDA Processing Memo FD-40 Value Pass Through Methods​​​​​​​
  
• USDA Procurement Regulations​​