General Procurement Requirements
All procurement transactions must be conducted in a manner that provides maximum open and free competition. All agencies receiving federal funds must have a procurement plan on file. 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.
Federal regulations require agencies receiving federal assistance to competitively purchase food, supplies, equipment, and services when the aggregate amount to be purchased is in excess of $150,000.
All sponsors are encouraged to take affirmative steps to ensure that minority firms and women’s business enterprises are used when possible. Affirmative steps may include placing such business on solicitation lists and ensuring such businesses are solicited whenever they are deemed potential sources. When economically feasible, sponsors may wish to divide their total procurement needs into smaller quantities to facilitate participation by minority business enterprises or establish delivery schedules that will help minority business enterprises meet deadlines. See links below for 7 CFR 3016 and 3019.
Agencies may apply a geographic preference to all procurement practices. Please see below for USDA guidance.
Vended Meals: the contractor provides the meals only (generally pre-packaged/ pre-plated) and does not manage any aspect of the food service. However, if the contractor's employees are responsible for the management of the program and/or for the final preparation and/or serving of pre-packaged/pre-plated meals, the contract becomes a FSMC contract and is no longer considered a vended meals contract.
Food Service Management Company (FSMC): a contract is one in which the contractor manages some aspect of the school food service program. Generally, the FSMC prepares and serves the meals and/or manages the school meal program(s). Programs contracting for meals for the Summer Food Service Programs must have a FSMC.
USDA regulations prohibit delegation of certain duties such as:
- Observing the limits on the use of nonprofit food service revenues including the use of nonprofit food service ac Ensuring only reimbursable meals are included on the claim for reimbursement regardless of the number of regardless of the costs billed by the FSMC;
- Determining and verifying the eligibility of children for free and reduced-price meals;
- Ensuring only reimbursable meals are included on the claim for reimbursement regardless of the number of meals billed by the FSMC; and
- Not permitting the accrual of all income and expenses to the FSMC.
Agencies are required to have specific procedures in place to determine the validity of meals claimed for reimbursement. To ensure the validity of meal counting and claiming systems at the schools under its jurisdiction, programs must conduct an on-site review of each year prior to February 1 of each school year. If the review identifies problems with the meal counting or claiming procedures, the agency shall ensure the school implements corrective action and, within 45 days of the review, the SFA must conduct a follow-up, on-site review to determine if the corrective action resolved the problems. Whether a SFA self-operates its food services or uses a food service management company, the SFA must conduct the on-site review and remains responsible for ensuring deficiencies are identified and effective actions are taken to correct any deficiencies found.
Programs must ensure food service management or vended meals contract language indicates the duration of the contract is no longer than one year. Additionally, options for yearly renewal of a contract must not exceed four additional one-year extensions. Since the decision to renew the contract is an affirmative decision made by both parties to the contract each year, either party, for any reason, may decide not to exercise the renewal option. If the contract is not renewed, the SFA must either conduct a new procurement or self-operate its food service.
Should either party determine revisions to the contract are necessary, non-material changes are generally made when the contract is renewed. These alterations cannot result in substantive changes to the original contract.
The following changes would normally not constitute a substantive change in the contract:
- Number of sites —(i.e., if new sites are added);
- Changes in enrollment—decreases and increases in enrollment and the corresponding change expected in participation;
- Changes in student/adult meal price);
- Per meal cost increases—cost increases limited to a measurable index; and/or
- Meal equivalency—minor adjustments to the per meal equivalency as set forth in the contract.
The basis for renewing the contract, including price increase provisions, if any, must be stated in the contract and be based on a measurable index such as the Consumer Price Index for All Urban Consumers. Programs should ensure that price increases are within the terms of the contract. You must submit a copy of the executed renewal to our office along with all applicable contract certification forms prior to the approval of your program participation for each fiscal year. 7 CFR 225
Agencies contracting for meals must use the Food Service Management Company prototype or Vended Meal prototype below. Changes to these documents must receive prior written approval from Alaska Child Nutrition Programs. All changes must be submitted in writing with a clear identification of items edited. Requests for changes must be submitted to the State no less than 30 days prior to posting.
Successful bids for Food Service Management contracts or Vended Meals that exceed $150,000 must be submitted to Alaska Child Nutrition Programs for review prior to bid award. The state agency will respond within 10 days (5 days for Summer Food Service Programs). Additionally, bids that are the lowest, but not selected for contract must also be submitted to the State Agency with an explanation of why the winning award was selected.
- Intent to Contract Meal Service (required by all programs) - word
- Capital Expenditures Request - word
- Procurement Fact Sheet - word
Applicability of Federal Requirements to Food Service Procurements
In August 2000, a final regulation published in the Federal Register moved the procurement procedure requirements for the Child Nutrition Programs from Department regulation 7 CFR Part 3015 to 7 CFR Parts 3016 and 3019. Agencies are encouraged to share this information with their legal counsel. Please refer to the USDA links below for more information on these requirements.
USDA Policy Memos
- SP18-2011 Procurement Geographic Preference Q&As
- SP03-2013, CACFP 02-2013, SFSP02-2013 Procurement Geographic Preference Q & As Part II
- SP09-2015, CACFP 03-2015, SFSP 02-2015 Written Codes of Conduct and Performance of Employees Engaged in Award and Administration of Contracts>
- SFSP 13-2014 Procurement Thresholds in the Summer Food Service Program
- SP31-2014 State Agency Prior Approval Process for School food Authority Equipment Purchases
- SP12-2016, CACFP 05-2016, SFSP 09-2016 Guidance on Competitive Procurement Standards for Program Operators
- SP03-2016, CACFP 03-2016, SFSP 03-2016 Procurement Standards and Resource Management Requirements related to Franchise Agreements
- SP02-2016, CACFP 02-2016, SFSP 02-2016 Questions and Answers on the Transition to and Implementation of 2 CFR Part 200
- SP01-2016, CACFP01-2016, SFSP01-2016 Procuring Local Meat, Poultry, Game, and Eggs for Child Nutrition Programs