Sneak Preview: FNS Letter Details Buy American Provisions

March 23, 2016 | By Jerry Ashworth | Post a Comment
xgran_bookshot(The following was excerpted from a recent article in the Federal Grants Management Handbook.) A recent Department of Agriculture (USDA), Food and Nutrition Service (FNS) letter to regional and state nutrition program officials detailed how they should monitor and enforce school food authority (SFA) compliance with the Buy American provisions under USDA regulations, and related performance monitoring provisions under the Office of Management and Budget’s uniform grant guidance.

FNS has received numerous questions from state child nutrition program directors and regional special nutrition program directors related to the enforcement of the Buy American provision. Section 12(n) of the National School Lunch Act (42 U.S.C. 1760(n)) requires SFAs to purchase, to the maximum extent practicable, domestic commodity or product, defining “domestic commodity or product” as an agricultural commodity or food product produced in the United States. The Buy American provision is codified under USDA regulations at 7 C.F.R. Part 210.21(d), and SFAs must comply with the requirement when purchasing commercial food products served in the school meals programs.

“The Buy American provision supports local and small businesses,” stated Sara Smith-Holmes, director of program monitoring and operations support for FNS’s Child Nutrition Programs, in the letter. “Using food products from local sources supports small local farmers and provides healthy choices for children in the school meal programs. Purchasing from these entities also supports the local economy. Compliance with the Buy American provision may also encourage SFAs to work with local, or small, minority and women-owned businesses.” The uniform guidance requires nonfederal entities to take all necessary affirmative steps to assure that minority businesses, women’s business enterprises and labor surplus area firms are used when possible (§200.321).

However, FNS does allow for limited exceptions to the Buy American provisions when: (1) a specific product is not produced or manufactured in the U.S. “in sufficient and reasonable available quantities of a satisfactory quality”; and (2) when competitive bids show that the costs of the U.S. products are significantly higher than nondomestic products. FSAs that use one of these exceptions are not required to request a waiver in order to purchase a nondomestic product, but they must maintain documentation justifying the exception, FNS said.

The letter noted that, rather than requesting an exception, SFAs should consider: (1) whether there are other domestic sources for the product; (2) whether another less-expensive domestic product could be easily substituted for the nondomestic product; and (3) whether they are soliciting bids for the product at the best time of year. “Although exceptions to the Buy American provision exist, they are to be used as a last resort,” the letter added. “SFAs are responsible for conducting market research to better understand specific markets.”

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)

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