Procurement in the CACFP

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Independent Center Independent center means a child care

center, at-risk afterschool care center, emergency shelter, outside-school-hours care center or adult day care center which enters into an agreement with the State agency to assume final administrative and financial responsibility for Program operations.

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Sponsor of Affiliated Centers Sponsoring Organization of Affiliated

Centers means a public, private for-profit, or private non-profit organization that is entirely responsible for the administration of the food program in:Two or more care centers, outside-

school-hours care centers, or adult day care centers; and

They are part of the same legal entity as the sponsoring organization.

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Sponsor of Family Day Care Homes Sponsoring organization of family day

care homes means a public or nonprofit private organization that is entirely responsible for the administration of the food program in one or more day care homes.

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Sponsor of Unaffiliated CentersSponsoring Organization of Unaffiliated

Centers means a public or nonprofit private organization that is entirely responsible for the administration of the food program in:A child care center, emergency shelter,

at-risk afterschool care center, outside-school-hours care or adult day care center which is a legally distinct entity from the sponsoring organization.

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What is Procurement? Procurement is simply the

purchasing of goods & services.

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What is a Vendor?

Consumer Club: Sam’s Club, CostcoCommercial Food Service Company: GFS, Sysco, etc.Catering CompanyFresh Food MarketLocal Butcher ShopFood Service Management Company

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DisclosureThis is the act of identifying related party

transactions.

Institutions are required to mark and describe the disclosure on the documentation form.

Required when using Program funds.

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Who must follow procurement rules?All Institutions must comply with the procurement

rules.An institution is any organization that has an

agreement with the Indiana Department of Education to operate one of the Child Nutrition Programs.

Facilities can be DCHs, affiliated centers, or unaffiliated centers that have an agreement with a sponsoring organization (an institution).

Facilities are not required by regulation or policy to conduct procurements that uphold free and open competition; i.e., they are free to purchase food and other items according to their own practices.

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Why is Procurement necessary?Institutions agree to follow Federal

Regulations when they receive money from CACFP.

Federal procurement regulations for private non profit institutions, for-profit institutions and public institutions.

Must be able to demonstrate free and open competition

Does not apply to facilities—but they should be encouraged to do so

Where to find procurement rulesFederal Cost Principles

2 CFR 225 (States, Local, & Indian Tribal Governments)

2 CFR 230 (Non-Profit Organizations)Uniform Administrative Requirements for

Procurement7 CFR 3016.36 (State & Local Governments)7 CFR 3019.44 (Non-Profit Organizations)

Program Regulations for Procurement7 CFR 226.22 (CACFP)7 CFR 225.17 (SFSP)

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§226.22 Procurement Standards

(a) This section establishes standards and guidelines for the procurement of foods, supplies, equipment, and other goods and services. These standards are furnished to ensure that such materials and services are obtained efficiently and economically and in compliance with the provisions of applicable Federal law and Executive orders.

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Why is Procurement Important?

Many stakeholders are interested when Federal funds are used

Funds are used effectively and efficiently, no waste or abuse

Procurement is about establishing a sound competitive process that uses free and open competition

Procurement cannot duly restrict or eliminate competition

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Procurement Procurement

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< $150,000>(Small Purchase

Threshold)

InformalSmall

Purchase(required bids

from 3 sources)

FormalSealed Bids

(IFBs) & Competitive

Proposals (RFPS)(requires public

advertising)

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1. Develop Specifications• What is the product or service?• Describe it with detail, for

example, milk in gallons or ½ pints; 1% or skim milk?

• How often do you need delivery

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2. Getting Bids• Identify at least 3

sources• Eligible, able &

willing• Share same

specifications with each vendor

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3. Document & Evaluate Bids

• Share same specifications with each vendor

• Document responses

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4. Determine the best bidder• Who is the most

responsive?• Who is the most

responsible?.• Who is willing to give the

best quality at the best price?

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5. Manage the contract• Is the institution

receiving the product they contracted for?

• Is the product of good quality?

• Is the vendor delivering on time?

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Specification Vendor A Vendor B Vendor C

-Fresh, whole Honey Crisp Apples-Delivered Weekly MondayBusiness hours-100 apples/week

Price/Case Price/Case Price/Case

Procurement: Proper or Not?

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PROPER NOT

PROPER

Procurement: Proper or Not? An independent center staff member needs to buy milk for this week’s meals and looks at three ads in the paper, documents their specifications and ad prices, and determines the cheapest milk in the area.

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Procurement: Proper or Not? A day care home provider needs to buy milk for this week’s meals and stops by a farmers’ market on the way home.

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Procurement: Proper or Not? A sponsoring organization writes specs for fresh carrots but when calling around, the third bidder says it can give them half off frozen carrots. The sponsoring organization buys the frozen carrots on the spot.

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ProcessIndependent centerSponsor-Affiliate Center

Sponsor-FDC HomesSponsor-Unaffiliated Center

Small Purchase Threshold is $150,000

Quote for 5 food itemsWrite specificationsChoose best vendorDo this QUARTERLYEffective Oct. 1, 2014Over $150,000, call SA

Small Purchase Threshold is $150,000

Quote for 3 highest price administrative expenses

Write specificationsChoose best vendorDo this ANNUALLY Effective Oct. 1, 2014Over $150,000, call SA

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Procedure for Procurement 2 versions

Independent Centers and Sponsors of Affiliated Centers

Sponsors of FDC homes and Unaffiliated Centers Explains requirements Explains frequency

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FrequencyANNUAL: one time per fiscal year. Should

be done in conjunction with the preparation of the annual budget

QUARTERLY: every 3 months. Suggested:OctoberJanuaryAprilJuly

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SummaryUse of Federal funds required proper

procurement procedures.Must compare prices and keep the playing field

level.Must disclose less-than-arms-length transactionsMust be able to demonstrate free and open

competition Many stakeholders are interested when Federal

funds are usedFunds must be used effectively and efficiently,

no waste or abuse

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For Questions, Contact

Carol Markle @ cmarkle@doe.in.govHeather Stinson @ hstinson@doe.in.govMary Lou Davis @ mldavis@doe.in.govKaren Edwards @ kedwards@doe.in.govElaine Haney @ mhaney@doe.in.govKim Cobb @ kcobb@doe.in.gov Maggie Boyce @ maggie@doe.in.gov

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USDA is an equal opportunity provider and employer.