Section 225.17 - Procurement standards(a) State agencies and sponsors shall comply with the requirements of 2 CFR part 200 , subpart D and USDA implementing regulations 2 CFR part 400 and part 415 , as applicable, concerning the procurement of supplies, food, equipment and other services with Program funds. These requirements ensure that such materials and services are obtained for the program efficiently and economically and in compliance with applicable laws and executive orders. Sponsors may use their own procedures for procurement with Program funds to the extent that: (1) Procurements by public sponsors comply with applicable State or local laws and the standards set forth in 2 CFR part 200 , subpart F and USDA implementing regulations 2 CFR part 400 and part 415 ; and(2) Procurements by private nonprofit sponsors comply with standards set forth in 2 CFR part 200 , subpart F and USDA implementing regulations 2 CFR part 400 and part 415 .(b) The State agency shall make available to sponsors information on 2 CFR part 200 , subpart D and USDA implementing regulations 2 CFR part 400 and part 415 , as applicable.(c) Sponsors may use their own procurement procedures which reflect applicable State and local laws and regulations, provided that procurements made with Program funds conform with provisions of this section, as well as with procurement requirements which may be established by the State agency, with approval of FNS, to prevent fraud, waste, and Program abuse.(d) The State agency shall ensure that each sponsor is aware of the following practices specified in 2 CFR part 200 , subpart D and USDA implementing regulations 2 CFR part 400 and part 415 , as applicable, with respect to minority business enterprises:(1) Including qualified minority business enterprises on solicitation lists,(2) Soliciting minority business enterprises whenever they are potential sources,(3) When economically feasible, dividing total requirements into smaller tasks or quantities so as to permit maximum participation by minority business enterprises,(4) Establishing delivery schedules which will assist minority business enterprises to meet deadlines, and(5) Using the services and assistance of the Small Business Administration, and the Office of Minority Business Enterprise of the Department of Commerce as required.(e)Geographic preference.(1) Sponsors participating in the Program may apply a geographic preference when procuring unprocessed locally grown or locally raised agricultural products, including the use of "locally grown", "locally raised", or "locally caught" as procurement specifications or selection criteria for unprocessed or minimally processed food items. When utilizing the geographic preference to procure such products, the sponsor making the purchase has the discretion to determine the local area to which the geographic preference option will be applied, so long as there are an appropriate number of qualified firms able to compete;(2) For the purpose of applying the optional geographic preference in paragraph (e)(1) of this section, "unprocessed locally grown or locally raised agricultural products" means only those agricultural products that retain their inherent character. The effects of the following food handling and preservation techniques shall not be considered as changing an agricultural product into a product of a different kind or character: Cooling; refrigerating; freezing; size adjustment made by peeling, slicing, dicing, cutting, chopping, shucking, and grinding; forming ground products into patties without any additives or fillers; drying/dehydration; washing; packaging (such as placing eggs in cartons), vacuum packing and bagging (such as placing vegetables in bags or combining two or more types of vegetables or fruits in a single package); addition of ascorbic acid or other preservatives to prevent oxidation of produce; butchering livestock and poultry; cleaning fish; and the pasteurization of milk.(f) All contracts in excess of $10,000 must contain a clause allowing termination for cause or for convenience by the sponsor including the manner by which it will be effected and the basis for settlement.54 FR 18208, Apr. 27, 1989, as amended at 71 FR 39518, July 13, 2006; 76 FR 22607, Apr. 22, 2011; 81 FR 66492, Sept. 28, 2016; 83 FR 25361, June 1, 2018; 87 FR 57365, Sept. 19, 2022 81 FR 66492, 9/28/2016; 83 FR 25361, 7/31/2018; 89 FR 32087, 7/1/2024