Procurement Compliance for School Food Authorities (SFAs)

School Food Authorities (SFAs) participating in the National School Lunch Program (NSLP) and other Child Nutrition Programs are subject to strict federal procurement regulations. These requirements ensure that public funds are used efficiently, competition is maximized, and all vendors are provided with a fair and equal opportunity to provide goods and services.

The Foundation of Compliance

Procurement for SFAs is governed primarily by 2 CFR Part 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards). SFAs must maintain a written code of standards of conduct, maintain oversight to ensure contractors perform in accordance with contract terms, and ensure that procurement transactions are conducted in a manner that provides full and open competition.

Procurement Methods

SFAs must choose the appropriate procurement method based on the dollar value of the purchase and the nature of the goods or services. The primary methods include:

• Micro-Purchasing: Used for the acquisition of supplies or services where the aggregate dollar amount does not exceed the micro-purchase threshold. These purchases can be made without soliciting competitive quotes if the SFA considers the price reasonable.
• Small Purchase Procedures: Used for relatively simple and informal procurement methods for services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. In this method, price or rate quotations must be obtained from an adequate number of qualified sources.
• Sealed Bids (Formal Advertising): Used for large-scale purchases where the procurement is expected to exceed the Simplified Acquisition Threshold. Bids are publicly solicited, and a firm-fixed-price contract is awarded to the responsible bidder whose bid conforms with all terms and conditions of the invitation for bids.
• Competitive Proposals: Used when conditions are not appropriate for the use of sealed bids. This method allows for a fixed-price or cost-reimbursement contract and considers both price and non-price factors.

Acquisition Thresholds

Thresholds are vital for determining the level of documentation required. While federal thresholds exist, SFAs must always adhere to the most restrictive thresholdwhether it be federal, state, or local policy.

Method	Requirement
Micro-Purchase	Below federal/local threshold (typically $10,000); no quotes required.
Small Purchase	Below the Simplified Acquisition Threshold (SAT), currently $250,000.
Formal Procurement	At or above the SAT; requires public advertisement and formal process.

Key Compliance Regulations

Beyond thresholds and methods, SFAs must remain vigilant regarding specific regulatory requirements:

1. Geographical Preference

SFAs may apply a geographic preference when procuring unprocessed locally grown or locally raised agricultural products. This does not permit the exclusion of non-local vendors, but rather allows for a preference in the evaluation process.

2. Buy American Provision

Section 104(d) of the William F. Goodling Child Nutrition Reauthorization Act of 1998 requires schools to purchase, to the maximum extent practicable, domestic commodities or products. A product is "domestic" if it is produced in the U.S. and processed in the U.S. substantially using agricultural commodities that are produced in the U.S.

3. Conflict of Interest

All procurement transactions must be free from personal, organizational, or financial conflicts of interest. Employees, officers, and agents of the SFA must not participate in the selection, award, or administration of a contract if they have a real or apparent conflict of interest.

4. Contract Provisions

Federal regulations require certain provisions to be included in all contracts awarded by the SFA. These include, but are not limited to, remedies for breach of contract, termination for cause/convenience, Equal Employment Opportunity requirements, and compliance with the Davis-Bacon Act for construction contracts.

Documentation and Record Keeping

SFAs must maintain comprehensive records detailing the history of every procurement. This includes the rationale for the method used, selection of contract type, contractor selection or rejection, and the basis for the contract price. These records are subject to audit by state agencies and the USDA.