The Code of Conduct is the Grinch that Stole Christmas!
Do I have to follow a code of conduct for gifts?
The Code of Conduct just may be the Grinch that Stole Christmas! What, no gifts? But it’s the season of giving! Yes, that is true, Cindy Lou Who, but excessive gifts from vendors are not OK with you-know-who. The Federal government sets the gifts from vendors limit at $50.00. The reason is quite obvious, but let’s break it down.
If a vendor we’ll call “Downhome Burgers” pours on the attention and the compliments and lavishes you and your decision makers with gifts and perks, how does that make you feel? While it might be enjoyable at first, when it’s time to award the business you’re going to feel a sense of obligation to those vendors. It’s human nature to want to reciprocate. How can you keep the process objective when the feeling that you owe them is in the air? With public funds involved, the purpose of procurement policies is to ensure fair and open competition.
Let’s take a closer look
What does the law say about gifts?
The Code of Federal Regulations (2 CFR), Section 200.318(c), says each agency must develop and maintain a written Code of Conduct to avoid any conflict of interest. Gifts from vendors are allowable if they are under $50 in value. A comfortable level for most school districts to accept is $25.00.
If gifts are accepted, they must be for the benefit of the entire department and not for one individual. Free marketing materials and logoed novelties of nominal value can be accepted, but employees should not ask for them. A Code of Conduct that includes these terms must be part of your procurement policy. If you don’t have one, the procurement experts at My K12 Resource can write one for you.
Are purchasing incentives allowable under the law?
The answer depends on who it is for. If an incentive is offered to any one individual, it should not be accepted. If it is for the benefit of the department, then that may be allowable. Any time an incentive is used to try to influence an employee engaged in the selection, award, or administration of a contract, it is frowned upon and probably unlawful. Employees who are engaged in the selection, award, or administration of contracts are especially susceptible to being approached by vendors with offers of incentives or perks.
Examples of incentives include, but are not limited to:
Extra goods or services that were not solicited
Gifts (such as free merchandise, event tickets, gift cards)
Money for scholarships
Points that can be redeemed for merchandise or food service equipment
To avoid noncompliance with federal procurement regulations (including, but not limited to, 2 CFR sections 200.318, 200.319, and 400.2) and to prevent bid protests, the agency’s written Code of Conduct must prohibit agency staff from accepting any incentives offered by a bidder for any agency staff member’s own personal use.
Incentives solicited by agencies in their Request for Proposal (RFP) or Invitation For Bid (IFB) are a complex matter and should be handled with caution. Incentives may be allowable if the incentive or related item benefits the foodservice operation. If there is a question about the incentive meeting this requirement, consider removing the incentive. Your state agency can help you assess allowability; however, compliance is ultimately the agency’s responsibility.
Who does this rule apply to?
Employees engaged in the procurement, award, and administration of contracts must be aware of the Code of Conduct and follow it.
To be in compliance with procurement law, any employees who are engaged in procurement must receive training on the Code of Conduct. It’s also prudent to make sure the entire department is aware of the Code of Conduct. In a cafeteria setting, a foodservice employee could easily come into contact with a vendor. It’s important that they know the policy.
What should you do about publicizing your Code of Conduct (COD)? It’s always a good idea to make it clear to vendors that you operate under a “no conflict of interest” policy. Posting your Code of Conduct on the Food and Nutrition website, inserting it into your bids, and including it in your Procurement Plan are always good ideas, too.
We hope that you now have a better understanding of how your Code of Conduct strengthens your procurement program. Visit www.myk12resouce.com for more info, tips, and training on successfully implementing the USDA regulations. If you are interested in working with a procurement coach, My K12 Resource can help; just reach out to us to get a quote!