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Procurement Regulations

SFAs must follow procurement procedures for all purchases for goods or services that are supported in whole or in part with non-profit food service account funds. Following proper procurement procedures helps ensure that procurements are fair, open, and competitive.
This school year, the OPI School Nutrition Programs has begun conducting additional procurement monitoring and training to assist districts with compliance of the rules. 

Use the Procurement Checklist to assist in meeting requirements.

All procurements in the Child Nutrition Programs must comply with:

  • 2 CFR 200;
  • USDA Program regulations (7 CFR Part 210, Part 215, Part 220, Part 225, Part 226, Part 245, and Part 250 as applicable);
  • State law, regulations, and policies that are not in conflict with Federal requirements; and
  • Local law, regulations, and policies that are not in conflict with Federal requirements.

These regulations are important because it ensures taxpayers' funds are used properly, and that schools are receiving the best and most responsive product at the lowest possible price.

State Agency staff will be using the USDA Procurement Tool to evaluate compliance with procurement regulations. The State Agency will be conducting Procurement Reviews on the same schedule as Administrative Reviews.

School Districts will be asked to complete an offsite Procurement Pre Review Questionnaire as part of the review process.

The Federal procurement requirements for the NSLP are published in 7 CFR 210.21

The Federal procurement requirements for the SBP are published in 7 CFR 220.16

The Federal procurement requirements for the SFSP are published in 7 CFR 225.17

The General Procurement Standards are published in 2 CFR 200.318

  1. Purchase food, supplies, and equipment required for the school’s meal preparation and service;
  2. Purchase prepared meals from vendors or joint preparatory schools;
  3. If utilizing a food service management company (FSMCs), can pay the FSMC to operate their food service or carry out significant food service functions; and
  4. Pay for labor and other administrative and operational costs related to the food service.

Any funds from the nonprofit school food service account used to procure goods or services must be used according to:

  • The uniform government wide requirements found in 2 CFR 200, which implement program specific requirements found in the School Nutrition Program regulations (7 CFR Part 210, Part 215, and Part 220).

Procurements made by schools that are not in accordance with the government wide and program specific requirements cannot be paid for with nonprofit school food service account funds.




Public institutions or organizations must follow the most restrictive of state, local, or federal procurement standards.

All SFAs must have their procurement guidelines in writing. SFAs must also maintain a written “standard of conduct” following 2 CFR 200.318(c)(1) and have written protest procedures in place to handle and resolve any disputes relating to their procurement processes.

All procurements in the School Nutrition Programs must be competitive and when made with non-profit school food service account funds must also meet all standards set forth in program regulations and applicable OMB Cost Circulars. Child Nutrition Programs are governed by the Code of Federal Regulations (CFR) under 7 CFR Parts 210, 215, 220, 3016, and 3019 (as applicable).

Use the Procurement Policy Template to assist in developing your district’s Procurement Policy.

Use the Procurement Checklist to assist in meeting requirements.

Procurement Methods

The non-Federal entity must use one of the following methods of procurement.


Federal regulation for a micro-purchase (2 CFR 200.320(a))

MICRO-PURCHASES: Micro-purchase means a purchase of products or services where the total amount does not exceed $3,500 per transaction.

To the extent practicable, purchases must be distributed equitably among qualified suppliers with reasonable prices.

You can identify if a price is reasonable by comparing prices from previous purchases, have personal knowledge of the item being purchased, or comparing prices to similar items being purchased. Check out Market News to get an idea of prices.


  • Receipts documenting total amount purchased falls below $3,500.
  • Documentation showing how purchases are being distributed equitably among qualified suppliers.
  • If only one qualified supplier, must document why there is only one qualified supplier. Include reasons, such as labor and mileage cost for driving to another location.

Informal Procurement

Federal regulation for a small purchase (2 CFR 200.320(b)).
Federal regulatory definition for simplified acquisition threshold (2 CFR 200.88)

INFORMAL PROCUREMENT METHOD:  commonly referred to as procurement under the small purchase threshold or simplified acquisitions. Although this method is permitted when the amount of a purchase falls at or below the most restrictive small purchase threshold ($80,000 in Montana), a school food authority could choose to use the formal procurement method rather than the informal procurement method.

The following steps are typically involved in an informal procurement:

  1. Develop specifications in writing.
    1. Describe the goods or services that are needed
    2. Any due dates or other requirements
  2. Identify sources eligible, able, and willing to provide products.
  3. Contact at least two sources.
  4. Evaluate quotes and response to your written specifications.
  5. Determine most responsive and responsible bidder at lowest price. Keep procurement documentation.


  • Specifications.
  • Receipts, invoices.
  • Documentation of price quotes from adequate number of sources (2 or more).
  • If only one qualified supplier, must document why there is only one qualified supplier. Include reasons, such as labor and mileage cost for driving to another location.

Formal Procurement

Federal regulation for sealed bids (2 CFR 200.320(c))

For purchases greater than the small purchase threshold ($80,000) follow the formal procurement process, using either a request for proposals (RFP) or invitation for bid (IFB).

Formal procurement occurs when a school food authority’s purchases exceed the Federal, State, or local small purchase threshold (whichever is more restrictive).

Montana’s small purchase threshold is $80,000, which is more restrictive than the federal threshold of $150,000.

Within formal procurement there are two methods available:

  • Competitive Sealed Bid/Invitation for Bid (IFB) = Formal type of procurement where sealed bids are publicly advertised and result in a firm fixed price contract. Price is the determining factor. Choose vendor with lowest price that meets specifications.
    • Used for food products that require detailed specifications- such as whole fresh apples detailing size, variety, quantities, delivery, other conditions.
    • Determine if a vendor is responsive and responsible by whether or not they meet the requirements.
    • Can use Geographic Preference.

The following steps are typically involved in a formal procurement using an IFB:

  1. Develop solicitation specifications;
  2. Publicly announce/advertise the solicitation;
  3. Open sealed bids at a pre-determined time, date, and location stated in the solicitation;
  4. Determine the lowest bid from a responsive and responsible bidder, and award the contract.
  • Competitive Proposal/Request for Proposal (RFP) = Price is a factor and can be negotiated. Price should be the primary factor (for example, not necessarily 51%, it just must be the greatest number of all factors so could be 25% if everything else listed in the scoring is lower).
    • Allows for consideration of other factors than price. Other factors: technical expertise, past experience, quality of proposed staffing. Awarded to vendor who can provide best overall value. Can use Geographic Preference.
    • RFP must be publicized and include specs and evaluation factors.
    • Can negotiate with one or more vendors submitting offers.
    • The response to the proposal has two main elements - technical proposal and cost proposal.

The following steps are typically involved in a formal procurement using a RFP:

  1. Develop solicitation specifications​;
  2. Publicly announce/advertise the solicitation;
  3. Evaluate proposals using established scoring criteria included in the solicitation;
  4. Enter negotiations with responders who meet or exceed cut-off score; and
  5. Award the contract to the most responsive and responsible vendor whose proposal is most advantageous to the program, with price and other factors considered.

Local Procurement

Food Service Management Company Contracts


OPI School Nutrition Resources:


Specification Resources:

USDA/Institute of Child Nutrition Resources