MWRO Response to HPS Assertions in “HPS Response to USDA Memo SP-05-2017”

Oct 10, 2026

Uploaded by McQueen

USDA Food and Nutrition Service, Midwest Region provides an official response to a position paper titled “HPS Response to USDA Memo SP-05-2017.” The letter addresses concerns about HPS’ interpretation of procurement requirements, clarifying limits on using GPO price lists, the lack of self-certification provisions for third-party entities, and the obligations of State agency and SFAs to conduct proper competitive procurement. It also explains “procure from” versus procurement agency relationships and discusses piggybacking contract requirements under SP-05-2017.

LanguageEnglish

CategoryHealthcare

FormatPDF

Pages3

Reading Time8 min

AccessFree to download

Letter Response

HPS Position Paper: Compliance and Procurement Standards

Response Re: SP-05-2017 and Piggybacking Requirements

United States Department of Agriculture Food and Nutrition Service Midwest Region 77 W. Jackson Blvd. 20th Floor Chicago, IL 60604-3511 April 14, 2017 Mr. Mark Haller, Director Division of Nutrition and Wellness Illinois State Board of Education 100 North First Street Springfield, IL 62777-0001 Dear Mr. Haller: The MWRO received a copy of the position paper,“HPS Response to USDA Memo SP- 05-2017” which we understand HPS has been providing to IL school districts and asserts that it is in compliance with USDA’s procurement requirements. The MWRO has a number of concerns with the accuracy of the document. This correspondence provides FNS’ response to HPS’ assertions noted in its position paper. 1. HPS Position Paper: FNS’ webinar explains that the “one source of price” limitation on the use of GPO price lists applies to GPOs that do not comply with Program and government-wide regulations. However, HPS then notes that FNS’ memo further clarified that ifa GPO conducts procurements for its contracts in compliance with Program and government-wide regulations, then Program operators may “procure these sources,” i.e., make purchases under the GPO’s properly procured contracts. HPS argues in its position paper that it “conducts its procurement activities on behalf of its SFA members [both current and those that join in the future] in a manner consistent with applicable federal procurement standards . . . .” MWRO Response to HPS’ position paper: HPS is misinterpreting the information provided in FNS’ webinar and should only refer to official policy guidance given in Answer 3.iii of Q1 in Memo SP-05-2017 as referenced in the HPS position paper. SFAs may not make purchases from the GPO without considering other sources simply because the GPO asserts that it complies with all Program and government-wide regulations. There are no FNS provisions for thirdparty entities to self-certify their procurement systems. Therefore, self-certification does not fulfill a CN Program operator’s responsibility to ensure that its procurement procedures comply with Program and government-wide regulations, which State agencies must review to ensure compliance. In addition, SP-05-2017 does not in any way imply that if an organization such as HPS conducts procurement in compliance with Federal regulations, then these organizations will be able to procure for CN program operators without the SFA conducting proper procurement for that organization. Rather, the SFA must follow proper procurement procedures, and then may utilize the GPO’s price list as one source when using small purchase procedures, sealed bids or competitive proposals, as applicable. AN EQUAL OPPORTUNITY EMPLOYER “Procure from” means accepting prices if an entity responds to your solicitation and comparing those prices to other responses; “procure from” does not mean having an entity procure for you, unless an express agency relationship is established. In some cases, a GPO may be acting as a procurement agent/third party purchaser. In those instances, SP- 05-2017 clarifies that the agent may not use pre-existing contractual relationships in lieu of conducting a competitive procurement on behalf of the Program operator. When preexisting contractual relationships exist, the GPO must still conduct a competitive procurement for the specific SFA(s); it cannot use the pre-existing contractual relationship in lieu of this. For HPS to serve as a procurement agent, the SFA(s) would have to state in their solicitation that they are procuring for a procurement agent. Secondly, in such a role, HPS would have to treat each individual SFA with whom it has won a procurement agent contract as a client. It is not possible to sign a contract with a distributor with your client’s exclusive interests in mind, before you have even won a bid from that “client”and know their specific needs. 2. HPS Position Paper re: SP-05-2017 HPS states,“Each school food contract that HPS awards r

FAQs

What is the document’s purpose?

It provides FNS’ response to HPS’ assertions stated in HPS’ position paper about compliance with USDA procurement requirements.

Why does MWRO say HPS is misinterpreting FNS webinar information?

MWRO states that HPS should rely only on official policy guidance and that SFAs must consider other sources and cannot treat GPO compliance claims as sufficient by itself.

How does “procure from” differ from having an entity procure for you?

“Procure from” means accepting prices when an entity responds and comparing them to other responses. It does not mean another party procures for you unless an express agency relationship is established.

Oct 10, 2026

Uploaded by McQueen