THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234
Office of P-20 Education Policy
Federal regulation 7 CFR Part 3016.36(b) prohibits the awarding of contracts to any entity that develops or drafts specifications, requirements, statements of work, invitations for bids, requests for proposals, contract terms and conditions or other procurement documents. This reminder is being re-issued since USDA continues to receive complaints that a number of school food authorities (SFAs) are not drafting their own specifications and procurement documents, but instead directly incorporating a list of features written by a prospective bidder.
In failing to fulfill its responsibilities to draft its own specifications and procurement documents, an SFA which copies a list of features or evaluation and ranking criteria drafted by a potential vendor affiliates (ex: brokers, manufacturer/ marketing reps) and then permits that potential vendor to submit a bid has violated Department regulation 7 CFR Part 3016.60(b). While schools have broad discretion in gathering information for use in connection with procurements, information from potential bidders must be excluded from competing for such procurements. This is to ensure objective contractor performance and eliminate unfair competitive advantage. A person that develops or drafts specifications, requirements, statements of work, invitations for bid, requests for proposals, contract terms and conditions or documents specifically for use by an SFA in conducting procurement under the Child Nutrition programs must be excluded from competing for such procurements.
Any action which diminishes open and free competition seriously undermines the integrity of the procurement process and may subject the SFA to bid protests. SFAs are reminded that they must have protest procedures in place and disclose information regarding a protest to our office. USDA is concerned that SFAs may not be properly responding to protests and concerns raised by potential contractors. Pursuant to §3016.36(b)(12), SFAs must have protest procedures in place to handle and resolve disputes relating to their procurements and must in all instances disclose information regarding a protest to their State agency.
School food authorities (SFAs) must also maintain appropriate records for procurement transactions occurring in connection with the Child Nutrition Programs.
Departmental regulations at 7CFR Parts 3016 and 3019, program regulations at 7 CFR 210.9(b)(17), and the terms of the agreement between State agencies and each SFA, require SFAs to retain their program-related records for a period of 3 years from the day the SFA's final allowable payment under the contract has been recorded. This is true regardless of whether the final payment is recorded prior to the expiration of the contract or subsequent to the expiration date.
When a procurement contract is continued or renewed at annual or other intervals, the retention period for the records of each contract period starts on the day the final payment is recorded in connection with the final renewal. It appears that many SFAs incorrectly believe that the 3-year retention period begins with the initial contract execution. The 3-year retention period does not begin until the final contract renewal period has expired and/or the final payment is recorded, whichever occurs first.
Actions such as bid protests, litigation, and audits may result in an extension of this 3-year record retention period. In all cases, the records must be retained until: (1) the completion of the action and resolution of all issues arising from it; or (2) the expiration of the regular 3-year period, whichever occurs later.
Adequate procurement methods are a prerequisite for receiving funds. If records generated during the performance of the award do not demonstrate compliance with applicable procurement requirements, several possible penalties may follow: disallowance of costs, annulment or termination of award, issuance of a stop work order, debarment or suspension, or other appropriate remedies. Examples of such records to be retained include:
- A written rationale for the method of procurement;
- A copy of the Request for Proposal or the Invitation For Bid;
- The selection of contract type (fixed price or cost reimbursable);
- The bidding and negotiation history;
- The basis for contractor selection;
- Approval from the State agency to support a lack of competition when competitive bids or offers are not obtained;
- The basis for award cost or price;
- The terms and conditions of the contract;
- Any changes to the contract and negotiation history;
- Billing and payment records;
- A history of any contractor claims; and
- A history of any contractor breaches.