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Introduction to Procurement for CACFP Operators
Welcome to the California Department of Education (CDE) Nutrition Services Division (NSD) Introduction to Procurement for CACFP Operators online course.
Course Description
This online course is for current and prospective CACFP Operators to provide information on federal and state procurement rules. This course applies to all CACFP adult and child care centers, emergency shelters, at-risk afterschool programs, and sponsoring organizations. Day care home providers are not
required to save receipts or comply with the guidance in this course.
Table of Contents
Instructions
-
Read the Introduction to Procurement for CACFP Operators online course located below.
-
After reading the course content, you will:
-
Answer the Course Assessment questions related to the course content,
-
Print a certificate of completion, and
- Notify the CDE NSD that you have completed the Introduction to Procurement for CACFP Operators online course.
A link to the Course Assessment and additional details are provided in the Course Assessment Instructions section at the end of this course.
Training Objectives
The training objectives of this online course are for current and prospective CACFP Operators to:
-
Learn the four principles of proper procurement.
-
Identify the four allowable procurement methods.
- Understand the federal requirement that all CACFP Operators develop and maintain two procurement documents: Written procurement procedures and a written code of conduct.
Principles of Procurement
Procurement is the process of acquiring goods and services needed by program operators through competitive practices while following all applicable federal, state, and local rules.
When conducting any type of procurement, program operators should always keep in mind the following four fundamental procurement principles:
1. Understand and comply with applicable federal, state, and local requirements
A strong understanding of procurement rules is key for program operators to correctly procure goods and services with confidence that they are in compliance and, equally important, that they are receiving the best products at the best prices.
Each level of government can make regulations, laws, rules, and policies about the use of the nonprofit food service account, the procurement process, and contracting requirements. State and local rules may only be more restrictive than federal rules, and program operators are required to follow the most restrictive rules.
The backbone of federal procurement regulations is found in
Title 2, Code of Federal Regulations
(2 CFR
), Sections 200.318 through 200.326
. These regulations apply to all agencies receiving federal funds to operate a federal Child Nutrition Program (CNP).
There are additional federal procurement regulations for the CACFP in
Title 7, Code of Federal Regulations
(7 CFR
), sections 226.6(i), 226.21, and 226.22
.
Since local rules may be more restrictive than federal and state rules, a best practice is that program operators consult with their agency’s procurement specialists and legal counsel prior to conducting procurements.
Contract Certifications
There are federal and state requirements for contract certifications that must be included in contracts between program operators and vendors. This section lists some of the more common certifications that program operators must include in their contracts. Please note that this is not an inclusive list:
Required certifications in all contracts for goods or services regardless of the dollar amount:
Even though a vendor certifies that they are not debarred or suspended, it is in the best interest of the program operator to search records on the
System for Award Management web page
to be certain that a potential vendor is not on this list before awarding a contract.
For contracts awarded in excess of $10,000, program operators must include a provision requiring compliance with Executive Order 11246, entitled “Equal Employment Opportunity,” as amended by Executive Order 11375, and as supplemented in Department of Labor regulations.
For contracts over $10,000, program operators must include a termination for cause or termination for convenience provision per
2 CFR
, Part 200, Appendix II(B)
(PDF)
and
7 CFR
, Section 226.22(l)(2)
.
For contracts over $100,000, the Byrd Anti-Lobbying Amendment must be included per Title 31, United States Code
Section 1352 and
2 CFR
, Part 200, Appendix II(I)
(PDF)
.
For contracts over the federal simplified acquisition threshold (also known as the small purchase threshold), which is currently set at $250,000, program operators must include language in the contract that addresses administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as appropriate per
2 CFR
, Part 200, Appendix II(A)
(PDF)
and
7 CFR
, Section 226.22(l)(1)
.
2. Ensure full and open competition
Full and open competition means that all potential suppliers are on a level playing field and have the same opportunity to compete. Fairness and integrity in all aspects of the procurement process are critical to achieving full and open competition. Competition is essential to ensuring program operators are able to purchase high quality goods and services at the lowest possible price.
The regulations on competition can be found in
2 CFR
, Section 200.319
and
7 CFR
, Section 226.22
.
The following are examples of situations that are unallowable because they restrict competition:
-
Placing unreasonable requirements on vendors in order for them to qualify to do business—for example, requiring a vendor to have at least two drivers at all times when delivering food.
-
Having organizational conflicts of interest—for example, because of relationships with a parent company, the program operator is unable to be impartial in conducting the procurement.
-
Having unnecessary bonding and experience requirements—for example, requiring the vendor to be in business for a minimum of 20 years.
- Specifying only a brand name product instead of allowing an equal product to be offered—for example, a program operator stating that they will only accept the Green Acre Farms brand of broccoli spears.
To ensure full and open competition, federal regulations do not allow potential vendors to develop or draft specifications, requirements, scopes of work, Invitation for Bids (IFB) or Request for Proposals (RFP) for program operators. Program operators may ask vendors for their specifications on certain products, but the program operator must determine and develop the specifications to include in their solicitation.
3. Award only to responsive and responsible vendors
To be considered responsive, vendors must conform to all the program operator’s stated terms and conditions. For example, if a program operator issues a solicitation for apples and the vendor responds with a bid for peaches, the vendor is not responsive.
To be considered responsible, vendors must be capable of performing successfully under the terms and conditions of the contract. For example, if a program operator requires that responders provide evidence of past success meeting delivery times and, when calling the responder’s references, the program operator learns that the vendor has a poor track record of on-time deliveries, the vendor would not be considered responsible.
4. Adhere to the Buy American Provision when purchasing food for School Nutrition Programs
Please note: This section only applies to School Nutrition Program (SNP) Operators who also operate the CACFP
. Current and prospective CACFP Operators who do not operate an SNP, such as the National School Lunch Program (NSLP) or School Breakfast Program, can disregard this section.
The National School Lunch Act requires SNP Operators to purchase, to the maximum extent practical, domestic agricultural commodities and products. These regulations can be found in
7 CFR
, sections 210.21(d)
and
220.16(d)
.
SNP Operators must comply with the Buy American Provision when purchasing agricultural commodities and products using funds from the nonprofit school food service account for the SNPs and, in cases where the program operator cannot segregate food purchases for the SNPs, from other CNPs. For example, the program operator cannot segregate purchases made for the NSLP from purchases made for the CACFP.
SNP Operators must:
-
Include the Buy American requirement in solicitations, contracts, and procurement procedures.
-
Document exceptions prior to receiving nondomestic foods and processed products.
- Monitor the contract to ensure that the requested domestic goods are received.
For more information, reference the U.S. Department of Agriculture (USDA) Policy Memorandum
SP 38-2017, Compliance with and Enforcement of the Buy American Provision in the NSLP
(PDF)
, view the CDE Buy American Provision for SNPs online course
, and read the Buy American Provision section on the CDE Procurement in the CNPs Frequently Asked Questions (FAQ) web page
.
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Four Methods of Procurement
This section includes information on the four procurement methods that a program operator can use to purchase goods and services. All four procurement methods are fully described in the following federal regulations
2 CFR
, Section 200.320
and
7 CFR
, Section 226.22 (h) and (i)
.
1. Micropurchase Method
Micropurchases enable program operators to purchase goods and services without soliciting competitive quotes if the following three conditions exist:
-
The amount of the single purchase transaction is equal to or below the current micropurchase threshold of $10,000. Note: Program operators cannot intentionally split purchases into smaller amounts in order to use the micropurchase method.
For example, if the program operator needs five dishwashers at a total cost of $15,000, they cannot split this into two procurements of $7,500 each so they can use the micropurchase method.
-
The program operator considers the price reasonable.
For example, if the program operator were using their own money, would they consider the price to be reasonable and make the purchase?
-
Micropurchases are distributed equitably among qualified suppliers.
For example, the program operator spends roughly the same amount among qualified suppliers. Rotating stores allows multiple vendors to benefit from federal dollars coming into their community.
As per
2 CFR
, sections 200.318(i) and 200.403(g)
, program operators must keep all receipts, invoices, and purchase orders for procurements made using the micropurchase method so they can be provided upon request during an on-site administrative review.
2. Small Purchase Method
In accordance with
2 CFR
, Section 200.320(b)
and
7 CFR
¸ Section 226.22(i)(1)
, when using the small purchase method, price or rate quotations must be obtained by an adequate number of qualified sources.
The small purchase method may be used when purchases are equal to or below the most restrictive applicable small purchase threshold. Most program operators in California will adhere to the federal small purchase threshold, which is equal to or less than
$250,000.
For SNP Operators only
: Public school districts are required to comply with the California Public Contract Code
( PCC
); however, food service departments within public school districts are no longer required to adhere to the more restrictive California small purchase threshold to procure goods and services due to an amendment to California PCC
, Section 20111, unless required by their local educational agency or school board.
Although most program operators will adhere to the federal small purchase threshold of $250,000, program operators need to determine whether their agency must comply with a more restrictive local small purchase threshold that is set by either their local government or by their own agency.
Since the CDE does not track local thresholds, program operators will need to consult with their legal department or reference their procurement procedures to ensure that they follow all applicable laws and regulations.
Five Steps for Conducting Small Purchases
-
Develop written specifications, terms, and conditions that detail the requirements of the intended agreement. Include details such as estimated quantity required, delivery needs, packing conditions, and, if the purchase is for food, SNP Operators must include the Buy American requirement.
-
Identify sources by contacting potential vendors by phone, email, or in-person visits and requesting quotes. Program operators must maintain written documentation of the specifications, terms, and conditions that they shared with potential vendors and each vendor’s response, even when contact was made by phone or in-person.
-
Evaluate responses to ensure that responders are responsive and responsible and document each bid in writing.
-
Award the contract. The program operator awards the contract to the vendor that is responsive and responsible and offers the lowest price.
-
Manage the contract to ensure that the program operator is receiving everything from the vendor that the contract stipulated.
3. Formal Purchase Method
Use of the formal purchase method is required for any purchase above the program operator’s most restrictive small purchase threshold. Most program operators will follow the federal small purchase threshold of $250,000 and are only required to use the formal purchase method for purchases that exceed
$250,000, unless they are required to adhere to a more restrictive local small purchase threshold, which could be set by the agency or the local government.
Within the formal procurement method, there are two types of formal solicitation tools that a program operator can use (as described at
2 CFR
, Section 200.320[c][d]
and
7 CFR
, Section 226.22[h][i]
).
-
An IFB is a procurement tool that is used when there is no substantial difference between the products or services that meet the specifications; the only real difference between the submissions is the price. To use the IFB tool, CACFP Operators must have a complete, adequate, and realistic specification available, and there must be two or more vendors who are willing and able to compete for the contract. For example, an IFB would typically be used when the CACFP Operator is purchasing office supplies.
-
An RFP is a procurement tool that is used when the CACFP Operator knows what they want, but the methods and exact specifications are not known; therefore, factors other than price are considered. For example, an RFP would typically be used when the CACFP Operator is planning a kitchen remodel.
Five Steps for Conducting Formal Purchases
-
Develop a written solicitation which will contain the scope of work or specifications, instructions for responding vendors, and the general terms and conditions of the procurement. Include details such as estimated quantity required, delivery needs, packing conditions, and, if the purchase is for food, SNP Operators must include the Buy American requirement. Please note, this step is the responsibility of the program operator; contractors may not write the solicitation or specifications on behalf of the program operator.
-
Announce the solicitation to receive bids or proposals. If the solicitation is an IFB, the program operator must solicit an adequate number of bids and is only required to publicly advertise the solicitation if they are a local or tribal government. If the solicitation is an RFP, the program operator must publicize the solicitation and identify all evaluation factors and their relative importance.
-
Evaluate bids or proposals from vendors once they are opened at the time and place prescribed. Please note that IFBs solicited by local or tribal governments must be opened publicly. The evaluation of bids or proposals is done by the evaluation criteria outlined in the solicitation. The offers are ranked based on either evaluation criteria or cost, depending on the type of solicitation used.
-
Award the contract to a responsive and responsible bidder who offers the most advantageous proposal (with price and other factors considered) for an RFP or the lowest price for an IFB.
- Manage the contract. The program operator remains responsible for ensuring compliance with the contract’s terms and conditions in addition to federal, state, and local rules.
For more information on the formal procurement method, view the CDE formal procurement online courses (course numbers 097, 098, and 099) in the SNP tab on the CDE CNP Course Catalog web page
.
4. Noncompetitive Purchase Method
Noncompetitive procurements can be used if one or more of the following conditions exist (as described at
2 CFR
, Section 200.320[f]
and
7 CFR
, Section 226.22[i][4]
):
-
An item is only available from a single source; this is known as a sole source procurement.
-
The public’s need is urgent or an emergency exists.
- After solicitation from a number of sources, competition is deemed inadequate.
It is important to note that when conducting any procurement transaction, program operators must keep all documentation and justification of the procurement method used and the basis for the award.
Program operators should be aware that failure to adequately follow procurement guidelines and requirements related to noncompetitive or sole source procurements may result in the cost of the contract being disallowed.
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Procurement Procedures and Code of Conduct
This section provides an overview of the requirement that all program operators have written procurement procedures and a code of conduct.
Procurement Procedures
Procurement procedures describe how a program operator will conduct procurement transactions, that is, how the program operator obtains goods and services following all federal, state, and local rules.
The federal regulations in
2 CFR
, Section 200.318(a)
and
7 CFR
, Section 226.22(c) and (e)
require that program operators use their own documented procurement procedures. This means that the required written procurement procedures are unique to each program operator.
Procurement procedures are beneficial to both program operators and taxpayers because they:
-
Provide written documentation that the program operator’s procurement procedures follow proper procurement principles and comply with federal, state, and local rules.
-
Ensure taxpayer dollars are not wasted. Program operator procurement transactions use public money, and therefore, the program operator’s procurement practices are always under scrutiny. Having written procurement procedures in place increases the chance that public money will not be wasted and that funds are used effectively, efficiently, and ethically.
- Protect the program operator by providing a document that procurement staff can use to ensure that they are following procedures that comply with all applicable procurement principles and rules.
Some best practices for procurement procedures include:
-
Train employees about procurement procedures and how it affects them.
-
Annually review procurement procedures and all applicable laws and regulations for changes and update procedures accordingly. An agency’s procurement procedures must reflect their
procurement practices. For example, if a child care center must comply with a $100,000 local small purchase threshold, this threshold must be included in the agency’s procurement procedures.
-
On a local level, ensure that the governing board approves procurement procedures, as needed.
Code of Conduct
Program operators are required in
2 CFR
, Section 200.318(c)(1)
and
7 CFR
, Section 226.22(d)
to have a written code of conduct, or what the California Government Code calls a conflict of interest code.
A code of conduct is a written policy governing the ethical conduct and actions of employees engaged in the selection, award, and administration of contracts.
In addition to being required by federal regulations and state laws, there are several benefits to having a written code of conduct, including the following:
-
The code of conduct protects the program operator’s reputation in a couple of ways. First, designated employees that must adhere to the code of conduct need to understand that the appearance of unethical conduct is just as damaging as verified unethical conduct. No one wants their agency to be on the news or in the spotlight for the unethical conduct of their employees. Second, having a code of conduct shows the public that the program operator is taking steps to prevent unethical conduct.
-
The code of conduct protects employees by providing set standards so employees understand what conduct is unethical and can take steps to avoid that conduct.
- The code of conduct also provides a single point of reference when employees have questions about whether their conduct is ethical, as well as consequences for unethical conduct.
There are several components that all program operators must
include in their written code of conduct.
-
Conflicts of Interest: The code of conduct must define what a conflict of interest is and ensure that staff who may have a conflict of interest do not participate in contract-related activities.
-
Gratuities, favors, and gifts: The code of conduct must ensure applicable staff do not solicit gifts from contractors and address whether staff are allowed to accept unsolicited gifts of nominal value. If gifts are allowed, the code of conduct must define the dollar amount constituting a nominal value. For example, an agency may allow staff to accept unsolicited gifts from contractors provided that a gift does not exceed the nominal value threshold set by the agency of $10 per gift and $100 per year per contractor.
- Disciplinary action: The code of conduct must include specific disciplinary action for code of conduct violations.
There are several components that some program operators may
need to include in their written code of conduct.
-
Organizational conflicts of interest: This ensures the ability of the program operator to be impartial if conducting a procurement transaction involving a related organization.
- Statement of Economic Interest: This ensures that public employees who make or influence governmental decisions submit a Statement of Economic Interest, Form 700, when required.
The Fair Political Practices Act requires that public school districts and county offices of education:
-
Conduct training for employees about the code of conduct and how it applies to them.
-
Provide employees with forms to report gifts, gratuities, and financial interests, and any decisions they have made regarding the district’s procurement transactions before they resign from their position.
- Obtain board approval for the written code of conduct.
For more information on the Fair Political Practices Act, access the link to the State of California
Fair Political Practices Commission web page
.
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Best Practices to Develop Procurement Documents
The CDE recommends that program operators who do not have written procurement procedures or a written code of conduct:
-
Review the CDE-developed Code of Conduct Checklist (PRU 08), Code of Conduct Sample (PRU 08a) and Procurement Sample (PRU 08b), accessible in the Download Forms section of the
Child Nutrition Information and Payment System
.
-
Determine what components to include in the program operator’s written procurement documents.
-
Draft these documents to match their program operator’s practices.
-
Train procurement staff on what these documents contain and how to use them.
-
Obtain board approval when required.
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Additional Resources
-
USDA
Procuring Local Foods web page
. Includes links to a helpful procurement guide, policy memos and regulations, webinars, and fact sheets.
-
USDA Policy Memorandums SP–05-2017, CACFP 03–2017, SFSP 02–2017,
Q&A: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-Party Services
(PDF)
. Includes guidance on various procurement groups, such as interagency agreements, and how to use each group in a way that complies with federal procurement standards.
-
CDE Procurement in CNPs web page
. Includes links to guidance, helpful resources, and Procurement in CNPs FAQ.
-
CDE CACFP Bulletins web page
-
USDA Food and Nutrition Service
Documents and Resources web page
This concludes the course content for the Introduction to Procurement for CACFP Operators online course. Please follow the instructions below to obtain a certificate of completion and notify the CDE that you have completed the course.
Course Assessment Instructions
1. Open the Course Assessment
. You will be prompted to enter your contact information, answer assessment questions related to the course content, and print a certificate of completion.
2. After printing a certificate of completion and before exiting the Course Assessment, you must select Submit
to notify the CDE that you have completed this course.
Note
: If you do not select Submit
on the final page of the Course Assessment, you will need to once again select the Course Assessment link in Step 1, reenter your contact information, answer assessment questions, and select Submit
to notify the CDE that you have completed this course.
This institution is an equal opportunity provider.
Esta institución es un proveedor que ofrece igualdad de oportunidades.