#0584-NEW Procurement Requirements 9-5-06

SUMMARY OF CLEARANCE
Procurement Requirements for the National School Lunch,
School Breakfast and Special Milk Programs
OMB CLEARANCE NUMBER 0584-NEW

Proposed rule 7 CFR Parts 210, 215, and 220, Procurement Requirements for the
National School Lunch, School Breakfast and Special Milk Programs, was published
December 30, 2004, at 69 FR 78340. This rule will amend regulations governing
procedures related to the procurement of goods and services in these programs.
Currently, the National School Lunch Program (NSLP) burden hours are accounted for
under docket #0584-0006, 7 CFR Parts 210, National School Lunch Program. Due to
the possibility of other regulatory actions that may affect this package and to avoid any
delay in implementation, we are processing this new burden under the NSLP as a new
collection. Once this burden is approved and the rule is finalized, FNS will combine this
burden with the #0584-0006 collection under a change request.

JUSTIFICATION STATEMENT
7 CFR PART 210

1.
Explain the circumstances that make the collection of information necessary.
Identify any legal or administrative requirements that necessitate the collection.
The National School Lunch Act (NSLA, P.L. 79-396), as amended, authorizes the National
School Lunch Program (NSLP). Under Section 2 thereof, “It is hereby declared to be the
policy of Congress, as a measure of national security, to safeguard the health and wellbeing of the Nation’s children and to encourage the domestic consumption of nutritious
agricultural commodities and other food, by assisting the States, through grants-in-aid
and other means, in providing an adequate supply of foods and other facilities for the
establishment, maintenance, operation, and expansion of nonprofit school lunch
programs.” Section 10 of the Child Nutrition Act (CNA) of 1966 (P.L. 89-642), as amended,
requires the Secretary of Agriculture to “prescribe such regulations as the Secretary may
deem necessary to carry out this Act and the Richard B. Russell National School Lunch Act
(NSLA)....” Pursuant to that provision, the Food and Nutrition Service (FNS) of USDA has
issued Part 210 to implement the NSLP. Part 210 includes requirements governing:
a.

The application by local level organizations to initiate NSLP
operations and the execution of grant agreements with them.

b.

The maintenance of records by State and local organizations to
document their compliance with NSLP requirements.

c.

The submission of reports on the results of program
operations and the use of program funds.

The NSLP is a food assistance program. The program benefit is a lunch that meets the
nutritional requirements prescribed by USDA in accordance with Subsection 9(a) of the
NSLA. That provision requires that “Lunches served by schools participating in the school
lunch program under this Act shall meet minimum nutritional requirements prescribed by
the Secretary on the basis of tested nutritional research…”
Needy children may receive their lunches free or at a reduced price. Paragraph 9(b)(3) of
the NSLA requires that “Any child who is a member of a household whose income, at the
time the application is submitted, is at an annual rate which does not exceed the applicable
family-size income level of the income eligibility guidelines for free lunches, as determined
under paragraph (1), shall be served a free lunch. Any child who is a member of
household whose income, at the time the application is submitted, is at an annual rate
greater than the applicable family-size income level of the income eligibility guidelines for
free lunches, as determined under paragraph (1), but less than or equal to the applicable
family-size income level of the income eligibility guidelines for reduced-price lunches, as
determined under paragraph (1), shall be served a reduced-price lunch.” 7 CFR Part 245,
Determining Eligibility for free and Reduced-Price Meals and Free Milk in schools (OMB

No. 0584-0026) sets forth policies and procedures for implementing these provisions. Part
245 requires schools operating the NSLP to determine children’s eligibility for free and
reduced-price lunches on the basis of each child’s household income and size, and to
establish operating procedures that will prevent physical segregation, or other
discrimination against, or overt identification of children unable to pay the full price for
meals or milk.
On December 30, 2004, FNS published a proposed rule at 69 FR 78340 seeking to
amend 7 CFR parts 210, 215 and 220, to revise the National School Lunch, Special Milk
and School Breakfast Programs, respectively, regarding the use of Federal funds for the
provisions of meals, milk and other services for schools operating these programs.

2.
Indicate how, by whom, how frequently, and for what purpose the information
is to be used. Except for a new collection, indicate the actual use the agency has
made of the information received from the current collection.
These regulatory changes will ensure optimum utilization of funds in the nonprofit
school food service account. The burden associated with the procurement requirement
will only affect schools participating in the National School Lunch or School Breakfast
Programs that contract with food service management companies. The burden
associated with schools participating in the Special Milk Program would be minimal
because milk is often the sole procured item and the procurement is generally handled
at the school food authority level.
This rule would prohibit a school food authority from using funds in the nonprofit school
food service account for expenditures made under an improperly procured contract,
including any cost reimbursable provision of a contract that permits the contractor to
receive payments in excess of the contractor's actual net allowable costs. State
agencies would also be responsible for reviewing and approving contracts between
school food authorities and food service management companies prior to their
execution.

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3.
Describe whether, and to what extent, the collection of information involves
the use of automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology, e.g. permitting electronic
submission of responses, and the basis for the decision for adopting this means of
collection. Also describe any consideration of using information technology to
reduce burden.
Since the program participants vary considerably in level of sophistication, information
related to the use of improved information technology to reduce burden is limited. FNS
strives to comply with the E-Government Act. To the extent possible, agencies within the
States use electronics to transfer information for SFAs where applicable.
4.
Describe efforts to identify duplication. Show specifically why any similar
information already available cannot be used or modified for use for the purpose(s)
described in Item 2 above.
We are unaware of any other program that has similar information already available or that
requires the maintenance of the same records needed to document the proper operation of
the NSLP. No State or local organization collects this same information for other Federal
agencies, as the NSLP is administered at the Federal level solely by FNS.
5.
If the collection of information impacts small businesses or other small
entities (Item 5 of OMB Form 83-1), describe any methods used to minimize burden.
Some SFAs undoubtedly meet the definition of "small organizations". However, no
correlation exists between the applicant's size and its eligibility to operate the NSLP. Each
SA must determine whether the information it requests for use in monitoring compliance
can be abridged in the case of small SFAs under its jurisdiction.
Although smaller SFAs record fewer financial transactions involving the NSLP, they deliver
the same program benefits and perform the same functions as any other SFA. Thus, they
maintain the same kinds of information on file. The SA, in its capacity as administering
agency, has the flexibility to prescribe less detailed procedures for use by small SFAs in
documenting program compliance. However, the SA must be guided by its responsibility to
ensure proper disbursement and accountability for Federal program funds. The NSLP
grant formula necessitates the reporting of certain information, regardless of the size of the
respondent organization. The SA cannot determine the amount of Federal funds due to
the SFA without knowing the number of lunches of each category served in schools under
the SFA's jurisdiction.

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6.
Describe the consequence to Federal program or policy activities if the
collection is not conducted or is conducted less frequently, as well as any technical
or legal obstacles to reducing burden.
The information is collected for the purpose of administering an ongoing program.
Applications can be accepted and agreements executed at any time, although SFAs
generally execute agreements at or shortly before the beginning of each school year.
SFAs submit claims for reimbursement for every month they operate the NSLP. Because
funds for the NSLP are budgeted on a fiscal year basis, a collection period greater than
one year would raise serious legal and accountability questions.
7.
Explain any special circumstances that would cause an information collection
to be conducted in a manner inconsistent with the general information collection
guidelines in 5 CFR 1320.5(d)(2).
The burden related to the review and approval of procurement contracts between SFAs
and contractors are consistent with 5 CFR 1320.5(d)(2).
8.
If applicable, provide a copy and identify the date and page number of
publication in the Federal Register of the agency's notice, required by 5 CFR
1320.8(d), soliciting comments on the information collection prior to submission to
OMB. Summarize public comments received in response to that notice and
describe actions taken by the agency in response to these comments. Specifically
address comments received on cost and hour burden.
Describe efforts to consult with persons outside the agency to obtain their views on
the availability of data, frequency of collection, the clarity of instructions and
recordkeeping, disclosure, or reporting format (if any), and on the data elements to
be recorded, disclosed, or reported.
A notice was published in the Federal Register on June 5, 2006, Volume 71, No. 107, page
32301. No comments were received on the information collection package.
The agency solicited comments and recommendations from persons outside the agency.
Persons from whom we obtain their views on the regulations for this part include Ronald W.
Hill, Assistant General Counsel, USDA, Office of the General Counsel, Food and Nutrition
Division.
9.
Explain any decision to provide any payment or gift to respondents, other
than remuneration of contractors or grantees.
No payment or gift was provided to respondents.
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10.
Describe any assurance of confidentiality provided to respondents and the
basis for the assurance in statute, regulation, or agency policy.
No confidential information is associated with the burden related to the review and approval
of procurement contracts between SFAs and contractors.
11.
Provide additional justification for any questions of a sensitive nature,
such as sexual behavior and attitudes, religious beliefs, and other matters
that are commonly considered private.
There are no questions of a sensitive nature included in this clearance package.
12.

Provide estimates of the hour burden of the collection of information.

The reporting burden associated with this collection increases the hours per respondent
from that which had previously been approved under #0584-0006. This increase is due to
the additional review and approval of procurement contracts by the SA between SFAs and
contractors prior to execution. The recordkeeping burden imposed on the SA also
increases from that which had been previously approved under #0584-0006, due to the
added recordkeeping requirement as the result of the additional paperwork needed from
SFAs.
The burden associated with collection is being submitted as a new request for information
collection. Once the collection is approved and the rulemaking in place, this burden will be
merged with the existing collection: #0584-0006, 7 CFR Part 210, National School Lunch
Program.
The table below reflect burden associated with requirements associated with this collection
requirement, minus those burden hours currently approved under #0584-0006 associated
with these specific collections. The total reporting and recordkeeping burden requested
under this new collection is the difference in the hours previously approved under that
specific collection.

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Section
RECORDKEEPING
SA review and approve SFA contracts prior
to execution:
Current Approved under #0584-0006
New Burden Requirements

Difference
REPORTING
SFA provide procurement documents to SA
for approval:
Currently Approved under #0584-0006
New Burden Requirements

Annual
number of
respondents

No.
responses
per
respondent

Hours per
response

Total
Burden

7 CFR
210.19(a)
57
57

21.78
30

0.167
0.4

207.324
684
476.676

7 CFR
210.16

1,648
1,648

1
1

0.25
1.5

Difference

412
2,472
2,060

Total Burden Requested

2,537

PUBLIC COST
To estimate public cost, we made the assumption that the "typical" State or local program
operator incurs paperwork cost at a rate of $10.00 per hour. We also assumed that an
appropriate portion of State level cost would be funded under the State Administrative
Expense (SAE) Program (7 CFR Part 235; OMB No. 0584-0067). During the most recent
fiscal year for which we have data on SA expenditure of both SAE and State appropriated
funds, SAs funded a percent from State sources. Therefore, we computed SA compliance
cost at a rate of $2.60 per hour rather than $10.00. Given this prologue, we made the
following computations:
Reporting
SFA Level

2,060 hours x $10.00

Recordkeeping
SA Level

477 hours x $ 2.60

$ 20,600.00

$ 1,240.20

TOTAL COST TO THE PUBLIC: $21,840.20
13. Provide an estimate of the total annual cost burden to respondents or
recordkeepers resulting from the collection of information.
There are no annual start-up or maintenance costs.
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14.
Provide estimates of annualized cost to the Federal government. Also,
provide a description of the method used to estimate cost, which should include
quantification of hours, operational expenses (such as equipment, overhead,
printing, and support staff), and any other expense that would not have been
incurred without this collection of information.
FEDERAL COST
The cost to the Federal Government was derived by using the total burden approved under
#0584-0006 at 9,480,695 hours; the percentage of the increase due to this collection at
0.0267%; multiplying 0.0267% by the cost to the Federal Government reported under
#0584-0006 ($754,575) would be reported as: $201.47.
(0.0267% x $754,575= $201.47)
15.
Explain the reasons for any program changes or adjustments reported in
Items 13 or 14 of the OMB 83-1.
This is a new collection of information. The 2,537 hours associated with the collection are
attributed to program change.
The rule amends the regulations governing procedures related to the procurement of
goods and services in the National School Lunch Program, School Breakfast Program and
Special Milk Program to remedy deficiencies identified in audits and programs reviews.
The rule makes changes in three areas: the school food authority’s responsibility for
proper procurement procedures and contracts; prohibitions on the school food authority’s
use of nonprofit school food service account funds for costs resulting improper
procurement and contracts; and the State agency’s review and approval of school food
authority procurement procedures and contracts.
Once the collection is approved and the rulemaking in place, this burden will be merged
with the existing collection: #0584-0006, 7 CFR Part 210, National School Lunch Program.
16.
For collections of information whose results will be published, outline plans
for tabulation and publication.
This collection does not employ statistical methods and there are no plans to publish the
results of this collection for statistical use.

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17.
If seeking to not display the expiration date for OMB approval of the
information collection, explain the reasons that display would be inappropriate.
We are not seeking approval not to display the expiration date for OMB approval of this
information collection.
18.
Explain each exception to the certification statement identified in Item 19,
"Certification for Paperwork Reduction Act Submissions," of OMB Form 83-1.
There are no exceptions to the certification statement.

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