Federal Micropurchase & Small Purchase Thresholds

This Management Bulletin (MB) supersedes MB CNP 01-2019 and informs all Child Nutrition Program (CNP) Operators that the USDA issued Policy Memorandum (Policy Memo) SP-02-2022 on December 15, 2021, implementing regulatory changes to the Federal informal procurement method, micropurchases and the micropurchase threshold in Title 2, Code of Federal Regulations (2 CFR) Section 200.320(a)(1)(i)-(v). You can view this Policy Memo on the USDA Food and Nutrition Service website at https://www.fns.usda.gov/cn/updates-federal-micro-purchase-threshold.

Micropurchase Distribution

2 CFR Section 200.320(a) previously required that to the extent practicable, program operators must distribute micropurchases equitably among qualified suppliers. The language of 2 CFR Section 200.320(a)(1)(ii)) has been updated from ‘must distribute’ to ‘should distribute’.

Micropurchase Awarded Without Competition

2 CFR Section 200.320(a) previously stated that micropurchases may be awarded without soliciting competitive quotations if the program operator considers the price to be reasonable. This language has been updated to state that micropurchases may be awarded without soliciting competitive price or rate quotations, if the program operator “considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly.” (2 CFR Section 200.320(a)(1)(ii)).

Micropurchase Thresholds

2 CFR Part 200 was updated to include new language about micropurchase thresholds available to all program operators. These are outlined below.

2 CFR Section 200.320(a)(1)(iii) now provides that program operators are “responsible for determining and documenting an appropriate micropurchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures.” The regulations also provide that the micropurchase threshold used “must be authorized or not prohibited under State, local, or tribal laws or regulations.” Program operators may establish a micro-purchase threshold that is higher than the federal threshold established in the Federal Acquisition Regulations (FAR), as outlined below.

The micropurchase threshold has been increased up to $50,000.

2 CFR Section 200.320(a)(iv) provides that program operators do not need to obtain prior approval from the California Department of Education (CDE) to change their micropurchase threshold from $10,000 to $50,000. Instead, program operators intending to increase their micropurchase threshold above $10,000 must  self-certify on an annual basis, and  maintain all documentation of such self-certification. Program operators choosing to self-certify must prepare and include a justification for the choice. The self-certification must include a justification, clear indication of the threshold, and supporting documentation of any of the following:

1. A qualification as a low-risk auditee, in accordance with the criteria in 2 CFR Section 200.520;
2. An annual internal institutional risk assessment to identify, mitigate, and manage financial risks; or
3. For public institutions, a higher threshold consistent with state law.

Additionally, 2 CFR Section 200.320(a)(1)(v), in certain circumstances, allows program operators to  request increases to the micro-purchase threshold over $50,000 from the CDE for indirect costs.

Small Purchase Thresholds

Effective August 1, 2018, all CNP Operators may use the small purchase method to procure goods or services equal to or less than the new federal small purchase threshold of $250,000 (increased from $150,000). For the procurement of goods and services exceeding $250,000, CNP Operators must use the formal procurement method.

As a reminder, on January 1, 2018, amendments to the Public Contract Code (PCC) Section 20111, occurring in the 2017–18 legislative session permitting public school districts (PSD) and county offices of education (COE) to follow the federal small purchase threshold, unless their local small purchase threshold is more restrictive. Please note that this amendment only affects purchases made by CNP Operators using federal CNP funds. Local agencies may set a lower threshold than the federal small purchase threshold mandated in 2 CFR, Section 200.320; therefore, CNP Operators should check with their legal counsel to ensure they are following the correct threshold amount and amend their procurement procedures accordingly.

Awarding a Request for Proposal (Effective January 1, 2018)

Prior to Senate Bill 544 (2017-18), PSDs and COEs were required to award the contract to the lowest bidder. As of January 1, 2018, all CNP Operators using the Request for Proposal (RFP) procurement method for federal CNP purchases can award contracts to the most responsible and responsive vendor whose proposal is most advantageous to the program with price being the primary factor and other evaluation criteria considered.

Below is an example of an evaluation method for awarding an RFP where price is the primary factor prior to SB 544 becoming effective.

In the example shown above, the CNP Operator stated in the RFP that only vendors who scored ten points or more would be considered for the award. Both Vendors 2 and 3 scored high enough to be considered for the award. Prior to SB 544, the CNP Operator in this example must award the contract to the lowest bidder, which is Vendor 2, even though Vendor 3 scored higher in the evaluation criteria.

Effective January 1, 2018, the CNP Operator can award the contract to the most responsible and responsive bidder where price is the primary consideration, but not the only consideration.

Below is the same example, but price is now one of the scored evaluation criteria.

As a result of the passage of SB 544, Vendor 3 would be awarded the contract because they are the most responsible and responsive bidder whose proposal is most advantageous to the program with price and other factors considered.

Contact Information

If you have any questions regarding this subject, please contact the appropriate Nutrition Services Division staff member for your agency as indicated below.

Procurement Resources Unit (PRU)

If you have any questions regarding this subject, please email the Procurement Resources Unit, at NSDProcurementReview@cde.ca.gov.

School Nutrition Programs (SNP)

You can find contact information for the SNP Specialists in the Download Forms section of the Child Nutrition Information and Payment System (CNIPS). You can also contact SNP by email at SNPinfo@cde.ca.gov.

Summer Meals Unit (SMU)

You can find contact information for the Summer Meals Unit (SMU) Specialists in the Download Forms section of the CNIPS for a list of SMU Specialists. You can also email SFSP@cde.ca.gov to be directed to an SMU Specialist.