Arkansas Department of Education Division of Elementary and Secondary Education Purchasing Goods and Services Using Group Purchasing Organizations

Memo Information

Memo Number
Memo Date
Memo Type
Child Nutrition
Regulatory Authority
SP-05-2017, 2 CFR 200.318-327
Response Required
Superintendents; Child Nutrition Directors/Managers

Primary Contact Information

Memo Text

ATTENTION:  Co-op Directors; Superintendents; Child Nutrition Directors 


Participating in inter-governmental and inter-agency agreements can offer greater economy and efficiency for procurement or use of common or shared goods or services (2 CFR 200.318(e)). School Food Authorities (SFAs) participating in these agreements must still conduct competitive procurement in accordance with 2 CFR Part 200.318-326 and applicable program regulations and guidance. Specifically, SFAs must ensure all:


  • Costs paid from the nonprofit food services account are necessary, reasonable, allocable, and otherwise allowable per 2 CFR 200.403 and the applicable cost principles in 2 CFR 200, subpart E.


  • Procurements are conducted in a manner maximizing full and open competition consistent with Federal procurement standards in 2 CFR 200.318-327 and in applicable Program regulations.


Group Purchasing Organizations, Buying Organizations, and Third-Party Vendors are collectively referred to as GPOs, these often include Child Nutrition Programs and non-program operators such as public and private schools. GPO’s could be private for-profit or nonprofit entities. A GPO is typically structured in a way that may include a membership fee paid by member users, who are then granted access to the GPO price list of products and services. Paying a fee does not constitute compliance with the competitive procurement process that is required.


Third party entities as mentioned above include groups outside of the child nutrition program that control all aspects of the procurement process from solicitation to evaluation. Examples of these groups include but are not limited to TIPS/TAPS and educational co-ops.


If used by SFAs, formal procurement procedures consistent with 2 CFR Part 200.318-327 and program regulations must be followed. If a fee is required to cover overhead or administrative costs, that fee must be stated in the agreement. Other parties may be added to these procured contracts if the original contract included a provision allowing “piggybacking”. When competitive procurement methods are conducted by the SFA, GPO price lists may be one source of prices when using small purchase procedures, sealed bids or competitive proposals. However, to comply with procurement regulations, the SFA must obtain at least one additional quote to ensure that they are receiving the best price.


Failure to competitively procure goods and services is a violation of Federal regulations and may result in delays, disputes, findings of noncompliance, and costs being disallowed.


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