Q&A: Purchasing Using Cooperative Agreements
Nutrition Services Division Management Bulletin
Purpose: Policy, Beneficial Information
To: All Child Nutrition Program Sponsors
Attention: Agency Officials Responsible for Procurement; Food Service Directors and Coordinators and Other Staff Involved with Procurement
Date: May 2017
Reference: U.S. Department of Agriculture Policy Memorandum SP 05-2017, CACFP 03-2017, SFSP 02-2017: Questions and Answers: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-party Services; California Public Contract Code, sections 20111 and 20118, and Title 2, Code of Federal Regulations, sections 200, 200.318-326, and 200.403.
Supersedes: Management Bulletin USDA-SNP-38-2012: Procuring Services of Purchasing Cooperatives, Group Purchasing Organizations, Group Buying Organizations, etc.
Subject: Questions and Answers: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-party Services
This management bulletin provides guidance to child nutrition program (CNP) operators regarding the use of cooperative agreements, agents, and third-party services in accordance with federal procurement standards, and clarifies California Public Contract Code (PCC), Section 20118, with regard to cooperative agreements. Information on this management bulletin pertains to the U.S. Department of Agriculture (USDA) Policy Memorandum SP 05-2017, CACFP 03-2017, SFSP 02-2017: Questions and Answers: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-party Services, which is located on the USDA Food and Nutrition Service Policy Web page at https://www.fns.usda.gov/school-meals/policy. This management bulletin supersedes management bulletin USDA-SNP-38-2012: Procuring Services of Purchasing Cooperatives, Group Purchasing Organizations, Group Buying Organizations, etc., dated September 2012.
Title 2, Code of Federal Regulations (2 CFR), Section 200.318(e), allows CNP operators to enter into intergovernmental or interagency agreements to offer greater economy and efficiency for procurement of common or shared goods or services. It is important that CNP operators entering into these types of agreements still conduct competitive procurements in accordance with 2 CFR, sections 200.318–326. Specifically, CNP operators must ensure that each of the following requirements are met:
- Costs paid from the nonprofit school food service account are necessary, reasonable, and otherwise allowable per 2 CFR, Section 200.403, and the applicable cost principles in 2 CFR, Part 200, Subpart E.
- Procurement is conducted in a manner maximizing full and open competition, and consistent with federal procurement standards in 2 CFR, sections 200.318–326, in addition to applicable CNP regulations.
Failure to competitively procure goods and services is a violation of federal regulations and may result in delays, disputes, findings of noncompliance, and costs being disallowed.
Additional California-Specific Guidance
In addition to the answers provided by the USDA in SP 05-2017, CACFP 03-2017, SFSP 02-2017, Questions and Answers: Purchasing Goods and Services Using Cooperative Agreements, Agents, and Third-party Services, California CNP operators must ensure compliance with the following California PCC requirements.
- Per California PCC, Section 20111, when purchasing goods and services through cooperative agreements, agents, and third-party services, all contracts must only be awarded to the lowest responsible bidder.
- Per California PCC, Section 20118, when a school district chooses to enter into an existing contract, commonly known as piggybacking, the school district must ensure that:
- The governing board of the school district has determined that entering into an existing contract is in the best interest of the district.
- They follow all procurement laws that authorize the school district to make leases or purchases.
- The existing contract does not include any specialized services.
All contracts must be procured in an open and fair manner. The bid documents should include specific terms and conditions that give notice to potential bidders that other agencies may purchase or lease identical items at the same prices and upon the same terms and conditions. Before entering into a cooperative agreement, CNP operators should also obtain a copy of the executed contract to ensure it was awarded in accordance with all federal, state, and local laws and regulations and includes a provision for cooperative agreements (piggybacking).
If you have any questions regarding this subject, please contact your agency’s designated Procurement Resources Unit (PRU), Child and Adult Care Food Program Unit (CACFPU), or Summer Meals Unit (SMU) specialist listed below:
PRU: You may contact Debbie Reeves, PRU Office Technician (OT) by phone at 916-319-0636, or by e-mail at SFSContracts@cde.ca.gov to be directed to a PRU Specialist.
CACFPU: The CACFPU specialist contact list is located in the CNIPS Download Forms section, Form ID CACFP 01. You can also contact the CACFPU OT by phone at 916-327-2991, or by e-mail at email@example.com.
SMU: The SMU county specialist contact list is located in the CNIPS Download Forms section, Form ID SFSP 01. You can also contact the SMU OT by phone at 916-322-8323, or by e-mail at firstname.lastname@example.org.