Buy American Provision Requirements for School Nutrition Programs

CARMEN OCANAS-LERMAFOOD AND NUTRITION PROGRAM DIRECTOR

REGION ONE EDUCATION SERVICE CENTER

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7 C.F.R. § 210.21(d) – Buy American

Code of Federal Regulations 25.104 – List of nonavailable domestic items

USDA Memo - SP-24-2016 Compliance with and Enforcement of the Buy American Provision in the

National School Lunch Program

7 C.F.R. § 210.21(d) – Buy American

Definition of Domestic Commodity or Product:i. An agricultural commodity that is produced in the United States; and ii. A food product that is processed in the United States substantially using agricultural commodities that are produced in the United States.

Requirement:i. In general. Subject to paragraph (d)(2)(ii) of this section, the Department shall require that a school food authority purchase, to the maximum extent practicable, domestic commodities or products. ii. Limitations. Paragraph (d)(2)(i) of this section shall apply only to—

A. A school food authority located in the contiguous United States; and B. A purchase of domestic commodity or product for the school lunch program under this part.

Code of Federal Regulations 25.104

Bamboo shoots Bananas Beef, corned, canned Beef extract Brazil nuts, unroasted Capers Cashew nuts Chestnuts Cocoa beans Coconut and coconut meat Coffee, raw or green bean

Grapefruit sections, canned Olive oil Olives (green) Oranges, mandarin, canned Pineapple, canned Tapioca flour & cassava Tartar, crude; tartaric acid & cream of tartar Tea in bulk Vanilla beans Water chestnuts Yeast, active dry and instant active dry

Provides a list of articles that have been determined to be nonavailable in accordance with 25.103(b), food items include:

USDA Memo – SP-24-2016 Compliance & Enforcement of the Buy American Provision

REQUIREMENTS: Section 104(d) of the William F. Goodling Child Nutrition Reauthorization Act of

1998 (Public Law 105-336) added a provision, Section 12(n) to the NSLA (42 USC 1760(n)): Requires school food authorities (SFAs) to purchase, to the maximum extent

practicable, domestic commodity or product. Definition of “domestic commodity or product” is 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” means that 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.

USDA Memo – SP-24-2016 Compliance & Enforcement of the Buy American Provision

IMPLEMENTATION: Supports the mission of Child Nutrition Programs

Serve children nutritious meals, and Support American agriculture

When CNP funds are used, procurement transactions for food products on the commercial market must comply with the Buy American Provision.

USDA-FNS encourages specifications be included in solicitations and contracts that only 100% domestically grown and processed products are approved for purchase.

USDA Memo – SP-24-2016 Compliance & Enforcement of the Buy American Provision

SUPPORTS LOCAL & SMALL BUSINESS: Using food products from local sources supports small local farms and provides

healthy choices for children in the school meal programs.

Supports the local economy.

Encourages conducting business with local, or small, minority, and women-owned businesses. As required in 2 CFR 200.321

USDA Memo – SP-24-2016 Compliance & Enforcement of the Buy American Provision

LIMITED EXCEPTIONS: Only to be used as a last resort….

1. The product is not produced or manufactured in the U.S. in sufficient and reasonable available quantities of a satisfactory quality; or

2. Competitive bids reveal the costs of a U.S. product are significantly higher than the non-domestic product

The School Food Authority (SFA) must keep documentation justifying the exception(s).

USDA Memo – SP-24-2016 Compliance & Enforcement of the Buy American Provision

BEFORE USING AN EXCEPTION: Alternatives to purchasing non-domestic food products should be considered…

1. Are there other domestic sources for this product?

2. Is there a domestic product that could easily be substituted, if the non-domestic product is less expensive (e.g. substitute domestic pears for non-domestic apples)?

3. 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?

USDA Memo – SP-24-2016 Compliance & Enforcement of the Buy American Provision

MONITORING BY THE SFA: Include the Buy American provision in solicitations, contacts, and product

specifications, this ensures Contractors are aware of the Buy American requirements Bidder is responsive and responsible to the solicitation

Best practice: Include language in the solicitation and contract on how the bidder would

address alternative methods to conform to the Buy American provision, if needed.

Solicitation and contract should include a method of requesting exceptions before supplying non-domestic products

USDA Memo – SP-24-2016 Compliance & Enforcement of the Buy American Provision

MONITORING BY THE SFA, continued: Ensure contractors perform in accordance with terms, conditions, and

specifications of their contracts or purchase orders (POs). Required in 2 CFR Part 200.318(b)

Ensure product labels designates the United States, or its territories, as the county of origin

Review products an/or delivery invoices/receipts to identity the county of origin is the US or its territories.

Conduct a periodic review of storage facilities, freezers, refrigerators, dry storage, and warehouse to ensure products comply with the Buy American provision.

USDA Memo – SP-24-2016 Compliance & Enforcement of the Buy American Provision

MONITORING BY THE STATE AGENCY (Texas Department of Agriculture): Compliance with the Buy American provision is checked by TDA during

procurement and/or administrative reviews TDA must determine if SFA’s solicitation and contract documents contain the

language for contracts to supply products in compliance with the Buy American provision

Review product labels to ensure it designates the United States, or its territories, as the county of origin

Review supplier invoices/receipts to ensure the county of origin is the US or its territories. Conduct a review of storage facilities, freezers, refrigerators, dry storage, and

warehouse to ensure products comply with the Buy American provision. Request documentation to justify any exception(s)

TDA must issue a finding and require corrective action if non-domestic products are identified and there is no documentation justifying the exception(s).

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Administrators Reference Manual

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Section 17: Procurement Buy American 17.55-

17.56

Buy American Checklist for Non-Domestic Food

Product Purchases

TDA-Administrator’s Reference ManualUpdated 4/4/17: New Buy American Guidance

Definition of Buy American: Requirement for schools to purchase, to the maximum extent practicable,

domestic commodities and products. A domestic commodity or product means an agricultural commodity that is

grown in the United States and processed in the United States or that is processed in the United States substantially using agricultural commodities that are produced in the Untied States.

For a food product to meet the Buy American requirement, over 51% of the final processed food product must consist of agricultural commodities that were grown domestically.

Applies to all purchases made with SNP funds. The Buy American requirement must be included in all contracts, requests for

offers, and purchase orders with all potential contractors.

TDA-Administrator’s Reference ManualUpdated 4/4/17: New Buy American Guidance

Considerations for a Buy American Exception: The CE/School District must determine that the use of non-United States (US) or

non-domestic food product is acceptable (not the distributor, supplier or vendor). The purchase of non-domestic food product should be an occasional not

frequent occurrence. Each time a non-domestic food product is purchased or delivered, the CE/School

District must determine if the Buy American requirements are met. If the distributor, supplier, or vendor is repetitively unable to provide US or

domestic food products, the CE/School District should discuss the Buy American requirements with the distributor, supplier, or vendor and determine if the entity is capable of fulfilling the terms and conditions of the contract.

TDA-Administrator’s Reference ManualUpdated 4/4/17: New Buy American Guidance

Considerations for a Buy American Exception, continued: The CE/School District may purchase food products that are an exception to the

Buy American provision, in the following situations:

1. The Food Product is not produced in sufficient quantities of a satisfactory quality

2. Competitive offers reveal that the cost of a domestic food product is significantly higher than the non-domestic food product

TDA-Administrator’s Reference ManualUpdated 4/4/17: New Buy American Guidance

Considerations for a Buy American Exception, continued: The CE/School District must first determine if the food product is gown in the US or

not:

TDA-Administrator’s Reference ManualUpdated 4/4/17: New Buy American Guidance

Considerations for a Buy American Exception, continued: The CE/School District must determine if the domestically grown food can be

purchased in large enough quantities of a satisfactory quality:

TDA-Administrator’s Reference ManualUpdated 4/4/17: New Buy American Guidance

Considerations for a Buy American Exception, continued: If the CE/School District purchases non-domestic food products, it must maintain

documentation demonstration the situation that warrants on exception. TDA has developed the Buy American Checklist for Non-Domestic Food Product

Purchases to assist CEs/School Districts in maintaining documentation. The CE/School District may verify that a food product is not grown in the US in

sufficient quantities for purchase as a domestic food product through the USDA Agricultural Marketing Resource Center (http://www.agmrc.org/commodities-products/) - use the search text box to find item. If the CE uses this source, it must retain documentation to demonstrate compliance.

Reasonable cost is defined as the amount that does not exceed a cost that a prudent (sensible) person would consider acceptable under similar circumstances.

TDA’s Buy American Checklist for Non-Domestic Food Product Purchases

TDA’s Buy American Checklist for Non-Domestic Food Product Purchases

Buy American Resources

7 C.F.R. § 210.21(d) – Buy American Code of Federal Regulations 25.104 USDA Memo – SP-24-2016 Compliance with and Enforcement of the Buy American

Provision in the National School Lunch Program TDA-FNS Administrators Reference Manual Section 17: Procurement TDA-FNS Buy American Checklist for Non-Domestic Food Product Purchases Region One CNP-STC Buy American Rules, Regulations and Nonavailable Items