UNDERSTANDING THE BUY AMERICAN PROVISION for PROCUREMENT Ronna SeGraves, MS, RD, LD May 2016

Required under 7 CFR Part (d); section 104(d) of the Child Nutrition Reauthorization Act of 1998  SFA’s MUST purchase, to the maximum extent practicable, domestic commodity or product  SFA’s MUST comply with this as one of the standards for procurement

 Supports Mission of the Child Nutrition Program  Supports local and small businesses  USDA requesting the Industry to be ‘engaged & supportive’

Definitions:  “Domestic Commodity or Product” – an agricultural commodity that is produced in the US and a food product that is processed in the US using substantial agricultural commodities that are produced in the US.  “Substantial” – over 51% of the final processed product consists of agricultural commodities that were grown domestically.

NOTE……..Guam, American Samoa, Virgin Islands, Puerto Rico, Northern Mariana Islands are allowed as US territories

HOW TO DETERMINE THAT AN ITEM IS DOMESTIC  Packaging information during delivery  Box  Individual cans/package  Invoice as country of origin

All Procurement Transactions must comply with Buy American whether purchased by SFAs or entities purchasing on their behalf  Group Purchasing Organizations  Cooperatives of schools  Inter-entity agreements  Food Service Management Companies

LIMITED EXCEPTIONS  Used as a last resort  Product not produced or manufactured in US in sufficient & available quantity or satisfactory quality  Competitive bids reveal the cost significantly higher than non- domestic product

SFA MUST have documentation to justify the exception

WHAT KIND OF DOCUMENTATION?  Bid Prices for both domestic & foreign products  Documentation between SFA and the food supplier   Telephone communication Documentation

BEST PRACTICES  Understand your market  Include ‘Buy American’ provision in all product specifications, bid solicitations, RFP, contracts, purchase orders Teach staff proper receiving practices

REQUIRED ‘BUY AMERICAN JUSTIFICATION FORM’ for each non- domestic product

Buy American Justification Form (Worksheet)  Product Name, Purchase Unit, Usage  Country of Origin  Estimated Annual Cost of the Domestic Product  Estimated Annual Cost of the Foreign Product  Alternatives Considered  Explanation of Foreign Product Use instead of Domestic Product  Signature, Date

COMPLIANCE MONITORING  administrative review AND / OR  separate procurement review

Review of :  Solicitation and Contract Documents  Labels on food products in facilities  Supplier invoices/receipts  In the event of Exceptions….documentation for justification

If non-domestic products are identified without documentation, a finding will be issued with required corrective action

PROCUREMENT CODE OF CONDUCT  WRITTEN INTO PROCUREMENT POLICIES & PROCEDURES for the CHILD NUTRITION PROGRAM

Written CODE OF CONDUCT should :  Prohibit employees from soliciting gifts  Prohibit employees from travel packages  Prohibit employees from other incentives from prospective contractors

CODE OF CONDUCT cont….  Prohibit employees from participating in the selection, award & administration of any contract to which an entity, or certain persons connected to them, have financial interest

CODE OF CONDUCT cont….  Provide for CNP operators to set standards when financial interest is not substantial or the gift is an unsolicited item of nominal value and is acceptable

CODE OF CONDUCT cont….  Provide disciplinary actions to be applied in the event standards are violated

SUMMARY  Districts MUST follow BUY AMERICAN provision  All non-domestic products must be evaluated with documentation  The ‘BUY AMERICAN JUSTIFICATION FORM’ MUST be completed for all non-domestic products  Administrative and Procurement Reviews  Districts MUST have a WRITTEN Procurement Code of Conduct

QUESTIONS ?