The purpose of this memo is to clarify the different types of procurement requirements school food authorities (SFAs) and Summer Food Service Program (SFSP) sponsors MUST follow when using funds from the non- profit foodservice account to purchase goods and services for the federal Child Nutrition Programs. Thresholds discussed in this guidance are current as of August 2018 and are subject to change.

Selecting a Procurement Method: Procurement Thresholds

The method applied to each procurement is determined by how the value of the procurement corresponds to the procurement thresholds. Since thresholds are established at the federal, State and local levels, it is important that SFAs always use the most restrictive threshold in determining a procurement method.

Consideration should be given to consolidating the acquisition of products or services when consolidation will result in more economical purchases. This is true even if consolidation increases the dollar amount over a purchase threshold, and therefore requires a more complex procurement method. When appropriate, an analysis should be made to determine the most economical approach.

All procurement procedures require documentation of how the solicitation was conducted, the responses received, how responses were evaluated and awarded, and monitoring of contract performance.

Small Purchase Threshold

The first threshold to consider is the small purchase threshold, also known as the simplified acquisition threshold. When the value of the purchase is estimated at less than or equal to the small purchase threshold, informal methods including micro-purchase and small purchase may be followed. However, when the value of the purchase is estimated at greater than the small purchase threshold, formal procedures including sealed bids (IFBs) and competitive proposals (RFPs) apply. 

New York State Small Purchase Threshold: For Local Governments and Public School Districts Only

Generally, the small purchase threshold is $20,000. [NY General Municipal Law §103 (1)]. School Districts are encouraged to check local procurement policies and procedures to determine whether the local small purchase threshold is more restrictive than NY General Municipal Law.

For purchases from New York State producers or growers of food, within certain parameters, SFAs must use the small purchase informal competitive procurement method (discussed below) when the purchase amount will not exceed twenty cents multiplied by the total number of days in the school year multiplied by the total enrollment of the school district up to $50,000 without SED permission [NY General Municipal Law §103 (9)]. For purchases above $50,000 school districts must seek permission from SED to deviate from the formal bidding requirements contained in NY General Municipal Law 103. Any purchase beyond the federal small purchase threshold must follow federal and state formal procurement methods

For purchases made directly from licensed milk processors, within certain parameters, SFAs must use the small purchase informal competitive procurement method (discussed below) when the purchase amount will not exceed twenty-five cents multiplied by the total number of days in the school year multiplied by the total enrollment of such school district up to $150,000. Otherwise, formal bidding requirements contained in NY General Municipal Law 103 must be used. [NY General Municipal Law §103 (10)]

Federal Small Purchase Threshold

The federal small purchase threshold is $250,000.

Informal Procurement Methods

As discussed above, when the value of the purchase is estimated at less than or equal to the small purchase threshold, formal procurement methods are not required; however, informal methods including micro-purchase and small purchase must be followed.

Micro Purchase

The federal micro purchase threshold is $10,000. To the extent practicable, micro-purchases must be distributed equitably among qualified suppliers and may be awarded without soliciting competitive price quotes if the price is considered reasonable by the entity conducting the procurement.

Small Purchase

Purchases that are less than or equal to the federal, State or local small purchase threshold, excluding purchases being made via micro purchase, require competition which means quotes must be obtained for the products specified from at least three bidders.

Formal Procurement Methods

Purchases that will exceed the federal, State or local small purchase threshold must follow formal procedures. These are sealed bids (IFBs) or competitive proposals (RFPs) that require public advertising and more rigorous procurement procedures. For NYS Local Governments and Public School Districts Only, these formal bidding requirements are contained in General Municipal Law 103.