Arkansas Department of Education Child Nutrition Program Buy American Procurement Requirements and Justification

Memo Information

Memo Number
CNU-16-039
Memo Date
5/9/2016
Memo Type
Administrative
Section
Child Nutrition
Regulatory Authority
7 CFR Part 210.21(d); USDA Policy Memo SP-24-2016
Response Required
NO
Attention
Federal Programs; Superintendents; Principals; Technology Coordinator; Test Coordinator; General Business Manager; Teachers

Contact Information

Memo Text

This memo replaces all previous Arkansas Department of Education (ADE) Commissioner’s Memos related to Buy American in the Child Nutrition Programs.

The Buy American provision (7 CFR Part 210.21(d)) is one of the procurement standards School Food Authorities (SFAs) must comply with when purchasing commercial food products served in the school meals programs.  Under this provision, SFAs are required to purchase, to the maximum extent practicable, domestic commodity or product.

The following definitions apply to this regulation:

  • Domestic commodity or product - an agricultural commodity that is produced in the United States and a food product that is processed in the United States using substantial agricultural commodities that are produced in the United States.
  • Substantial - over 51 percent of the final processed product consists of agricultural commodities that were grown domestically.

Products from Guam, American Samoa, Virgin Islands, Puerto Rico, and the Northern Mariana Islands are allowed under this provision as territories of the United States.

SFAs are reminded that when funds are used from the nonprofit food service account, procurement transactions for food products on the commercial market must comply with the Buy American provision.  This is true whether food products are purchased by SFAs or entities that are purchasing on the SFAs behalf.

Some examples of entities purchasing on the behalf of SFAs include: food service management companies, group purchasing organizations, cooperatives of school districts purchasing shared goods and services, or through an inter-entity agreement, etc. If SFAs have difficulty ensuring that food products meet this regulation, the United States Department of Agriculture (USDA) Food and Nutrition Services (FNS) encourages a specification to be included in solicitations and contracts that only 100% domestically grown and processed products are approved for purchase.

There are limited exceptions to the Buy American provision which allow for the purchase of food products not meeting the “domestic” standard as described above (“non-domestic”) in circumstances when use of domestic products is truly not practicable. However, before utilizing an exception, alternatives to purchasing non-domestic food products should be considered. For example, SFAs should ask:

  • Are there other domestic sources for this product?
  • Is there a domestic product that could be easily substituted, if the non-domestic product is less expensive (e.g. substitute domestic pears for non-domestic apples)?
  • Am I soliciting bids for this product at the best time of year? If I contracted earlier or later in the season, would prices and/or availability change?Although exceptions to the Buy American provision exist, they are to be used as a last resort. These exceptions are:
  • The product is not produced or manufactured in the U.S. in sufficient and reasonable available quantities of a satisfactory quality; or
  • Competitive bids reveal the costs of a U.S. product are significantly higher than the non-domestic product.

If a SFA is using one of the above exceptions, there is no requirement to request a waiver in order to purchase a non-domestic product. SFAs must, however, keep documentation justifying the exception(s).

Purchasing Products that Meet the Buy American Requirements:

 Purchasing products that meet the Buy American requirements is accomplished by SFAs including the Buy American provision in solicitations, contracts, and product specifications. A reply offer to comply with Buy American terms in a solicitation ensures contractors are aware of Buy American requirements. Further, bidder assurance of the Buy American provision ensures that the bidder is responsive and responsible to the solicitation. Best practices would then entail including language in the solicitation and contract on how the bidder would address alternative methods to conform to the Buy American provision, if needed. Furthermore, language should be included that establishes the method of requesting exceptions before supplying non-domestic products.

Additionally, solicitation and contract language must be monitored to ensure compliance. SFAs must monitor contractor performance as required in 2 CFR Part 200.318(b), to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. This is accomplished by ensuring the product label designates the United States, or its territories, as the country of origin.

Therefore, SFAs must ensure that products delivered comply with any Buy American contract provisions by reviewing products and/or delivery invoices/receipts to identify the country of origin is the United States or its territories. SFAs also need to conduct a periodic review of storage facilities, freezers, refrigerators, dry storage, and warehouses to ensure products comply with the Buy American provision, unless a limited exception has been approved by the district child nutrition director.

SUGGESTED LANGUAGE FOR PROCUREMENT DOCUMENTS: 

  1. As required by the Buy American provision, all products must be of domestic origin as required by 7 CFR Part 210.21(d).
  2. The District participates in the National School Lunch Program and School Breakfast Program and is required to use the nonprofit food service funds, to the maximum extent practical, to buy domestic commodities or products for Program meals. A “domestic commodity or product” is defined as one that is either produced in the U.S. or is processed in the U.S. substantially using agricultural commodities that are produced in the U.S. as provided in 7 CFR Part 210.21(d).
  3. Exceptions to the Buy American provision should be used as a last resort; however, an alternative or exception may be approved upon request. To be considered for the alternative or exception, the request must be submitted in writing to a designated official, a minimum of ___day (s) in advance of delivery. The request must include the:
    1. Alternative substitute (s) that are domestic and meet the required specifications:
      1. Price of the domestic food alternative substitute (s); and
      2. Availability of the domestic alternative substitute (s) in relation to the quantity ordered.
    2. Reason for exception: limited/lack of availability or price (include price):
      1. Price of the domestic food product; and
      2. Price of the non-domestic product that meets the required specification of the domestic product.

COMPLIANCE MONITORING: 

The Arkansas Department of Education, Child Nutrition Unit (ADE/CNU) is required to conduct procurement reviews beginning School Year 2016-2017. ADE/CNU must ensure that SFAs comply with the Buy American provision. ADE/CNU must determine if a SFA’s solicitation and contract documents contain the language for contractors to supply products in compliance with the Buy American provision; review the label on a variety of food products in storage facilities; and review a sample of supplier invoices/receipts to ensure the country of origin is the United States or its territories. If exceptions are identified, ADE/CNU must request documentation justifying the exception(s) outlined above. If non-domestic products are identified and there is no documentation justifying the exception, then ADE/CNU must issue a finding and require corrective action.

In order to assist SFAs with documentation justifying an exception to the Buy American requirement, the attached Buy American Justification Form is required for each non-domestic product purchased.These forms must be available to ADE/CNU for review at all times.

 

Attachment

Buy American Justification Form