Hello, my name is Katie Tully and welcome
to the National School Lunch Program Equipment Assistance Grants procurement webinar. I am
joined today by Jennifer Howerter. We are School Nutrition Program Specialists in the
Nutrition Services Division. Our hope for you today is that viewing this presentation
will assist you to follow the correct procurement guidelines and submit the correct documentation
for your purchases made with Equipment Assistance Grant money. Our contact information is available
at the end of this webinar. The purpose of this webinar is to inform NSLP
equipment grant recipients of federal and state procurement requirements when using
grant funds. This training is not intended to provide a complete explanation of all laws
and regulations applicable to procurement. The SFA is responsible for ensuring procurements
comply with all applicable laws, regulations, program instructions, and guidance materials.
It is important that all recipients of the National School Lunch Program Equipment Assistance
Grants review and understand the requirements in this training so that the California Department
of Education does not need to recover improperly used grant funds.
Throughout this webinar, we will refer to the National School Lunch Program as the “NSLP”
and the Equipment Assistance Grant as “equipment grant.” We will refer to a School Food Authority as an SFA. The topics that we will cover in this webinar are: – General Grant Requirements
– Debarment, Suspension, and Lobbying – Definition of Equipment
– Capitalization Threshold – Types of Procurement
– Bid Thresholds – Formal Procurement
– Informal Procurement – Equipment Considerations
– Required Paperwork – Equipment Quotes
– Purchase Order – Final Invoice
– Proof of Payment – Delivery Receipts
– Paperwork Submission First, we will cover the general grant requirements.
A general requirement of the equipment grant is that the SFAs spend grant funds on approved
equipment. An SFA may only purchase equipment approved for awarded sites.
It is important that SFAs understand equipment grant funding is school site-and equipment-specific.
Equipment purchases for school sites other than the sites awarded are not allowed. Likewise,
equipment purchases must be for the equipment items that were approved by the CDE.
For example: SFA has 2 sites; Sites A and B Site A was awarded $5,000 to purchase a
convection oven, but Site B was not awarded funds. Site B’s refrigerator malfunctioned
and needs to be replaced. The SFA may not use Site A grant toward new
refrigerator purchase at Site B. Funds may only be used to purchase a convection oven at Site A. Another general equipment grant requirement
is that SFAs must complete all procurement activities within the award period. Procurement
activities include all of the activities outlined in this webinar, including the payment for
the equipment. This slide shows an excerpt of a Grant Award
Notification, or “GAN,” that is mailed to each SFA awarded an equipment grant. Please
note the circled award starting and ending dates in the example. In this example, the
SFA must have completed all procurement activities between July 1, 2014, and May 1, 2015. SFAs
must not purchase equipment before the award period. The CDE will recover funds from SFAs
that purchase before or after their award period. See your GAN for your grant award
period. If the total purchase is greater than or equal
to $25,000, SFAs must require vendors to complete and submit certification regarding debarment
and suspension. If the total purchase price is greter than or equal to $100,000, SFAs
must require vendors to complete and submit certification regarding lobbying.
Find the certifications at CDE Suspension, Debarment, and Lobbying Web site: http://www.cde.ca.gov/ls/nu/sn/mb98113.asp
Please note that these requirements are for the total purchase price from a vendor regardless
of funding source. For example, if an SFA spends $100,000 on equipment from a vendor
and $20,000 of the total spent was from equipment grant funds, the debarment and suspension
certification and the lobbying certification are required. The SFA should keep this certification
in their records. It is important to understand how the grant
defines equipment. Federal regulations define equipment as tangible personal property having
a useful life of more than one year and a per-unit acquisition cost that equals or exceeds
the federal capitalization threshold of $5,000. In other words, the total cost of each piece
of equipment must equal or exceed $5,000. Equipment purchases of less than $5,000 are
considered supplies. SFAs cannot group together multiple items to meet the threshold. For
example, an SFA cannot buy two ovens at $2,500 each in order to meet the $5,000 threshold.
Each oven’s total cost must be at least $5,000.
Total equipment unit costs include shipping, tax, and installation. Equipment does not
have to be new. According to Title 2, Code of Federal Regulations,
Section 200.33, the definition of equipment is a piece of equipment that has a per-unit
acquisition cost that equals or exceeds $5,000. SFAs may use a lower capitalization threshold
if the SFA provides documentation of board approval at the time of grant application
submission. If no board approval of lower capitalization
threshold exists, the SFA must use the federal capitalization threshold of $5,000.
SFAs that accept an equipment grant must abide by the federal procurement regulations 7 CFR
Part 210.21 and 2 CFR Part 200.317-326. Equipment must be procured competitively.
Equipment purchases must be procured competitively using either formal or informal procurement
methods. Both procurement methods have their own requirements, and SFAs must adhere to
the proper type of procurement in order to avoid having to return grant funds.
Applicable federal and state bid thresholds determine if SFAs use the formal or informal
procurement method. Effective August 30, 2012, the federal small
purchase threshold is $150,000. The 2015 state bid threshold is $86,000.
The thresholds change January 1 of each calendar year. The most current state bid threshold
is posted on the CDE Accounting Correspondence Web page at: http://www.cde.ca.gov/fg/ac/co/
If the sum of all equipment purchases from one supplier or vendor exceeds the applicable
bid threshold, then the SFA is required to follow the formal procurement process.
If your site is a charter school, private school, or residential child care institution,
you must use the federal threshold. If your site is a public school or county
office of education, you must use the state threshold. This slide provides an example of when SFAs are required to publicly advertise a Request
for Proposal, known as an RFP, or an Invitation for Bid, known as an IFB. For example:
An SFA is approved to purchase equipment for five sites; each site is awarded approximately
$20,000. Each site requests similar equipment to purchase from one supplier or vendor. The
total award for the five sites is approximately $100,000. The aggregate equipment purchase
exceeds 2015 state bid threshold of $86,000, necessitating the formal procurement process.
For more information, see the CDE Procurement Web page Procurement tab at http://www.cde.ca.gov/ls/nu/sn/fsmcproc.asp?tabsection=1
SFAs may use informal procurement processes when their equipment purchase(s) is/are less
than the applicable small purchase threshold. Although less rigorous than the formal procurement
method, SFAs must still conduct the competitive procurement process.
Prior to purchasing equipment, we recommend that SFAs determine their equipment needs
by first considering the existing space, equipment compatibility, delivery timeframes, and equipment
budget. Understanding these items will help SFAs develop specifications for the equipment
and assist in obtaining adequate and competitive quotes from vendors.
All SFAs are required to submit to the CDE evidence of procurement by the award period
deadline in order to ensure that they can keep the grant funds and receive their final
10 percent payment. The documentation required is the following:
– Invitation for Bid (formal procurement only) – Vendor price quotes
– Purchase order – Final invoice
– Expenditure payment – Delivery and installation receipts
We cover each of the required paperwork items in the following slides.
For formal procurement three quotes are required. For informal procurement three quotes are
recommended as a best practice, but two quotes are required The quotes must: – Originate from different vendors*
– Have the same or similar specifications, including accessories
– Include tax, shipping, and installation fees if applicable
– Originate from the vendor, and not be written by the SFA *The quote requirement is subject to exception. See slide 25 for more information Remember, quotes must be for the awarded equipment and have a total cost that is
In the following slides, we provide an example greater than or equal to $5,000 per item or the SFAs lower capitalization threshold amount. In the following slide, we provide an example of the paperwork required for the procurement
of the tilting skillet. For the example, an SFA was awarded $15,000 for a tilting skillet.
The SFA identified the following quote specifications: – 30-gallon capacity tilting skillet
– Voltage of 115 and 2 amps motor – Gas capacity
– Spray hose and pan carrier accessories – Delivery specified on quote
– Under $15,000 total cost When asking for quotes from vendors, SFAs
must give the vendors detailed specifications for the equipment.
This example of a quote shows the following, noted in red:
1. The tilting skillet specifications 2. Inclusion of guarantee
3. Voltage and motor 4. Pan carrier accessory
5. Spray hose accessory 6. Freight
7. Tax 8. Total
None of this can be summarized by the school – it is all provided by the vendor.
For the other two quotes to be considered competitive, they must meet specifications.
This quote contains the same desired specifications, so it is a comparable quote. The quote is
not summarized by the school, so it is all provided by the vendor.
Like the previous quote, this example shows the following:
1. The tilting skillet specifications 2. Inclusion of guarantee
3. Voltage and motor 4. Pan carrier accessory
5. Spray hose accessory 6. Freight
7. Tax 8. Total
Now we just have to look at the third and final quote to see if it meets specifications.
The third quote also contains the same specifications so it is a comparable quote.
This next example is a quote that does not meet the SFAs established specifications.
In particular, as noted in the red circle, the gallon capacity is larger. Additionally,
the pan carrier and spray hose accessories are not included.
Also, the total price exceeds the total equipment cost specification of $15,000. This vendor’s quote is considered not responsive. If a quote with differing specifications was included
in an SFAs quote paperwork, the SFAs grant funds could be jeopardized.
Once the SFA has obtained all quotes, the SFA must choose the lowest bidder. It is not
always possible for an SFA to obtain three quotes. In this case, SFAs must document attempts
to get three quotes. If your SFA is experiencing difficulty with the procurement process, please
contact the Equipment Grant team at [email protected] prior to purchasing equipment. If the SFA
does not choose the lowest quote or ensure adequate competition, then the CDE may recover
grant funds for that piece of equipment. We will now discuss the requirements for purchase
orders. A Purchase Order must be signed and dated by SFA’s authorized representative,
dated within grant award period, equal to total price quote.
Purchase orders for equipment purchased outside the grant award period will not be funded.
Please refer to the slides entitled “General Requirements” to find your award period
on your grant award notification. We determined in our earlier quote example
that Arrow Restaurant Equipment was the lowest bidder. On this sample purchase order, it
shows the SFA is purchasing the equipment from Arrow Restaurant Equipment, which is
indicated in the top left corner of the purchase order. Purchase orders must be for the same
equipment stated on the vendor’s quote. We can see here this purchase order contains
the following: 1. The model number is the same as the quote
2. It includes same guarantee, motor, and accessories as the quote
3. The price is the same as the quote 4. It is signed and dated within the grant
award period SFAs are required to send a final invoice
to CDE with their invoice package. Final invoices must: – Have a signed annotation stating the invoice is final and dated within grant award period
– Contain equipment consistent with equipment on price quote of awarded vendor
– Equals the total on purchase order and quote (if not the SFA must provide an explanation)
The general expectation is the total purchase price on a final invoice should match the
total on the quote. However, it is possible for a final invoice to have a different total
than a quote. For example, an SFA may have been quoted a different tax rate than they
were charged on the final invoice. If the final invoice total does not equal the quote,
please provide an explanation. Please remember that the total cost of each
piece of equipment must be greater than or equal to $5,000 or the SFA’s capitalization
threshold. Final invoices for equipment purchased outside the grant award period will not be
funded. The final invoice shows the following:
1. It is dated within the grant award period. 2. The equipment matches the purchase order.
3. It is signed. 4. It is above the $5,000 capitalization threshold.
Proof of payment is also required. SFAs must provide proof of payment in either the form
of a check issued to the vendor or a fiscal report showing SFA payment for invoiced equipment
Please note: for public school districts and county offices of education, equipment grant
payments should come from resource code 5314 and not from resource code 5310
In this example the payment matches the dollar amount on the final invoice and is paid to
the order of the selected vendor. In our example, that vendor was Arrow Restaurant Equipment.
Delivery and installation receipts offer proof SFA installed equipment at awarded site.If
originally delivered to a site other than awarded site, SFA must provide documentation
equipment was delivered and installed at the correct site.
Sometimes SFAs will direct the vendor to deliver a piece of equipment to a main district office
or warehouse. If this happens, then the SFA must submit documentation that the equipment
was ultimately delivered to the awarded site. This documentation can take the form of packing
slips. It must show that the approved equipment was installed at the correct site. This is an example of a delivery receipt.
The documentation shows that the equipment was delivered to the site awarded and the
receipt is signed, proving that delivery was accepted. If the equipment had been delivered
to a central location, the SFA would have included further documentation to show that
the equipment was delivered and installed at the correct site. For example, a work order
that shows the date and site where the equipment was installed at a later date.
SFAs must number all required paperwork for each piece of equipment as shown in this slide:
1. Quotes 2. Purchase order
3. Final invoice 4. Expenditure payment
5. Delivery and installation receipt This allows CDE staff to move through your
package quickly and ensures that we can find all the necessary documentation for timely
approval. Submit the final, appropriately labeled package
to: Equipment Assistance Grants
Nutrition Services Division California Department of Education
1430 N Street, Suite 4503 Sacramento, CA 95814 Let’s review some important information
provided in this webinar. – Understand your bidding threshold
– Assess needs before purchasing equipment – Purchase only approved equipment with grant funds – Mind your equipment threshold because equipment
should have total cost of $5,000 or more, or a cost at or above SFA’s lower capitalization threshold – Collect quotes (depending on your bidding
threshold) with comparable specifications and purchase from the lowest bidder
– Complete all procurement activities within the grant award period
– Contact the Equipment Grant team if you are experiencing difficulty with your procurement
at [email protected] Please review this webinar as often as necessary
to ensure that you are following the correct procedures. If you have questions, do not
hesitate to ask. E-mail the Equipment Grant team at [email protected]
This institution is an equal opportunity provider.