I
103D CONGRESS
1ST SESSION
H. R. 2956
To amend the National School Lunch Act to protect school districts and
the Department of Agriculture from anti-competitive activities of suppli-
ers that sell commodities to schools that participate in the school lunch
program, the school breakfast program, the special milk program, and
the summer food service program for children, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 6, 1993
Mr. KILDEE introduced the following bill; which was referred to the
Committee on Education and Labor
A BILL
To amend the National School Lunch Act to protect school
districts and the Department of Agriculture from anti-
competitive activities of suppliers that sell commodities
to schools that participate in the school lunch program,
the school breakfast program, the special milk program,
and the summer food service program for children, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘School Lunch Protec-
tion Act of 1993’’.
SEC. 2. FINDINGS.
Congress finds that—
(1) in recent years, there has been an alarming
number of instances of price-fixing and bid-rigging
regarding foods purchased for—
(A) the school lunch program established
under the National School Lunch Act (42
U.S.C. 1751 et seq.); and
(B) the school breakfast program estab-
lished under the Child Nutrition Act of 1966
(42 U.S.C. 1771 et seq.);
(2) during the past several years, the Antitrust
Division of the Department of Justice has filed over
95 criminal cases against persons accused of bid-rig-
ging conspiracies, false statements, mail fraud,
price-fixing, and similar activities involving dairy
products sold to schools or the Department of De-
fense;
(3) over 30 grand juries in States are inves-
tigating similar activities, especially in connection
with activities involving the dairy industry;
(4) 45 corporations and 48 individuals have
been convicted by Federal courts of similar activi-
ties, and total fines and civil damages of approxi-
mately $100,000,000 have been assessed in Federal
and State actions for similar activities;
(5) a report of the Comptroller General of the
United States noted that, as of March 1992, the
Secretary of Agriculture had neither suspended nor
debarred any of the 13 dairy companies or 28 indi-
viduals convicted, as of March 1992, of milk con-
tract bid-rigging from participating in the school
lunch and breakfast programs;
(6) effective educational and monitoring pro-
grams can greatly reduce the incidence of price-fix-
ing and bid-rigging by companies that sell products
to schools;
(7) reducing the incidence of price-fixing and
bid-rigging in connection with the school lunch and
breakfast programs could save school districts, par-
ents, and taxpayers millions of dollars per year;
(8) the Comptroller General of the United
States has noted that bid-rigging awareness training
is an effective means of deterring improper collusion
and bid-rigging; and
(9) the Comptroller General of the United
States in a General Accounting Office report ad-
dressed many of the concerns described in this sec-
tion with respect to bid rigging in the school lunch
program.
SEC. 3. DUTIES OF THE SECRETARY RELATING TO ANTI-
COMPETITIVE ACTIVITIES.
The National School Lunch Act (42 U.S.C. 1751 et
seq.) is amended by adding at the end the following new
section:
‘‘SEC. 25. DUTIES OF THE SECRETARY RELATING TO ANTI-
COMPETITIVE ACTIVITIES.
‘‘(a) IN GENERAL.—The Secretary shall—
‘‘(1) provide advice, training, technical assist-
ance, and guidance to representatives of States, con-
tracting entities, school food service authorities, and
other appropriate entities (as determined by the Sec-
retary) regarding means of identifying and prevent-
ing anticompetitive activities relating to the acquisi-
tion of commodities for—
‘‘(A) the school lunch program established
under this Act;
‘‘(B) the school breakfast program estab-
lished under the Child Nutrition Act of 1966
(42 U.S.C. 1771 et seq.);
‘‘(C) the special milk program established
under section 3 of the Child Nutrition Act of
1966 (42 U.S.C. 1772); and
‘‘(D) the summer food service program for
children established under section 13 of this
Act;
‘‘(2) provide information to, and fully cooperate
with, the Attorney General and State attorneys gen-
eral regarding investigations of anticompetitive ac-
tivities relating to the acquisition of commodities for
the programs referred to in paragraph (1);
‘‘(3) provide awareness training, training films,
technical advice, troubleshooting advice, and other
guidance related to avoiding or detecting bid-rigging,
price-fixing, or other anticompetitive activities con-
cerning the acquisition of commodities for the pro-
grams; and
‘‘(4) debar or suspend a person under section
12A, applicable regulations issued by the Secretary
(such as part 3017 of chapter XXX of subtitle B of
title 7, Code of Federal Regulations), and other ap-
plicable Federal laws (including regulations).
‘‘(b) FOOD SERVICE MANAGEMENT INSTITUTE.—
The Secretary may request assistance from the food serv-
ice management institute authorized under section 21 in
carrying out this section. The Secretary may contract with
the institute to carry out all or part of the duties described
in paragraphs (1) and (3) of subsection (a).
‘‘(c) TERMINATION.—The authority provided by this
section shall terminate on September 30, 1999.’’.
SEC. 4. NONPROCUREMENT DEBARMENT.
(a) IN GENERAL.—The National School Lunch Act
is further amended by inserting after section 12 (42
U.S.C. 1760) the following new section:
‘‘SEC. 12A. NONPROCUREMENT DEBARMENT.
‘‘(a) IN GENERAL.—Except as provided in sub-
sections (b) and (c), the Secretary shall debar a person,
and each principal and affiliate of the person, for at least
1 year from supplying, providing, or selling a product or
commodity to a school, school district, school food service
authority, or school district consortium participating in
the school lunch program established under this Act, the
school breakfast program established under the Child Nu-
trition Act of 1966 (42 U.S.C. 1771 et seq.), the special
milk program established under section 3 of the Child Nu-
trition Act of 1966 (42 U.S.C. 1772), or the summer food
service program for children established under section 13
of this Act if the person, or a principal or affiliate of the
person, is convicted, in connection with supplying, provid-
ing, or selling a product or commodity to any school,
school district, school food service authority, or school dis-
trict consortium participating in any of the programs, or
to any Federal agency, of—
‘‘(1) an anticompetitive activity, including bid-
rigging, price-fixing, the allocation of customers be-
tween competitors, or other violation of Federal or
State law related to protecting competition;
‘‘(2) mail fraud, bribery, theft, or embezzle-
ment;
‘‘(3) making a false statement or claim;
‘‘(4) making a false declaration before a grand
jury; or
‘‘(5) other obstruction of justice.
‘‘(b) SUBSEQUENT CONVICTIONS.—Except as pro-
vided in subsection (c), if a person, or a principal or affili-
ate of the person, is convicted of an activity described in
subsection (a) after having been previously debarred under
this section, the person, and each principal and affiliate
of the person, shall be debarred for at least 3 years from
supplying, providing, or selling a product or commodity
to any school, school district, school food service authority,
or school district consortium participating in a program
described in subsection (a) or to any Federal agency.
‘‘(c) WAIVERS.—The Secretary may waive a debar-
ment imposed under subsection (a) or (b) if the Secretary
determines that debarment would—
‘‘(1) likely have a significant adverse effect on
competition or prices in the relevant market or na-
tionally;
‘‘(2) seriously interfere with the ability of a
school, school district, school food service authority,
or school district consortium to procure a needed
product or commodity for a program described in
subsection (a);
‘‘(3) be unfair to a person, subsidiary corpora-
tion, affiliate, parent company, or local division of a
corporation that is not involved in the improper ac-
tivity that would otherwise result in the debarment;
or
‘‘(4) not be in the public interest.
‘‘(d) RELATIONSHIP TO OTHER AUTHORITY.—A de-
barment imposed under this section shall not reduce or
diminish the authority of a Federal, State, or local govern-
ment agency or court to—
‘‘(1) penalize, fine, suspend, debar, or otherwise
punish, in a civil or criminal action, a person or a
principal or affiliate of the person; or
‘‘(2) imprison, debar, suspend, fine, or other-
wise punish a person or a principal or affiliate of the
person.
‘‘(e) REGULATIONS.—The Secretary shall issue such
regulations as are necessary to carry out this section.’’.
(b) IMPLEMENTATION.—
(1) APPLICATION.—The amendment made by
subsection (a) shall not apply to a conviction that is
based on an activity that took place prior to the date
of enactment of this Act.
(2) REGULATIONS.—Not later than July 1,
1994, the Secretary of Agriculture shall amend the
nonprocurement regulations established under part
3017 of chapter XXX of subtitle B of title 7, Code
of Federal Regulations, to conform with section 12A
of the National School Lunch Act (as added by sub-
section (a)).
(3) CONSISTENT
DEBARMENT
POLICY.—Not
later than 120 days after the date of enactment of
this Act, the Secretary of Agriculture, in consulta-
tion with the Director of the Office of Management
and Budget, the Secretary of Defense, and such
other officials as the Secretary of Agriculture deter-
mines are appropriate, shall advise the appropriate
committees of Congress and the Comptroller General
of the United States as to the appropriateness and
usefulness of a consistent debarment policy under—
(A) the Federal acquisition regulations is-
sued under title 48, Code of Federal Regula-
tions; and
(B) Federal nonprocurement regulations.
(4) NO REDUCTION IN AUTHORITY.—
(A) IN GENERAL.—The authority of the
Secretary of Agriculture that exists on the date
of enactment of this Act to debar or suspend a
person, or a principal or affiliate of the person,
from Federal financial and nonfinancial assist-
ance and benefits under Federal programs and
activities, on a government-wide basis, shall not
be diminished or reduced by this section or the
amendment made by this section.
(B) DEBARMENT
OR
SUSPENSION.—The
Secretary may continue, after the date of enact-
ment of this Act, to debar or suspend a person
(or a principal or affiliate of the person), on a
government-wide basis, from Federal financial
and nonfinancial assistance and benefits for any
cause for debarment or suspension that is speci-
fied in part 3017 of chapter XXX of subtitle B
of title 7, Code of Federal Regulations, or as
otherwise permitted by law (including regula-
tions).
SEC. 5. INFORMATION RELATING TO PREVENTION AND
CONTROL OF ANTICOMPETITIVE ACTIVITIES.
The National School Lunch Act (as amended by sec-
tion 3) is further amended by adding at the end the follow-
ing new section:
‘‘SEC. 26. INFORMATION RELATING TO PREVENTION AND
CONTROL OF ANTICOMPETITIVE ACTIVITIES.
‘‘On request, the Secretary shall present to the appro-
priate committees of the Congress information regarding
the 
administration 
of 
section 
12A 
(relating 
to
nonprocurement debarment) and section 25 (relating to
the duties of the Secretary relating to anticompetitive ac-
tivities), and any waiver granted under section 12A(c).’’.
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