Children's Nutrition Assistance Act of 1992
PL 102-512 (S.2875), enacted 10/24/1992

PUBLIC LAW 102-512—OCT. 24, 1992 
106 STAT. 3363 
Public Law 102-512 
102d Congress 
An Act 
To amend the Nationtd School Lunch Act and the Child Nutrition Act of 1966 
to better assist children in homeless shelters, to enhance competition among 
infant formula manufacturers and to reduce the per unit costs of infant formula 
for the special supplemental food program for women, infants, and children (WIC), 
and for other purposes. 
Be it enacted by the Senate and House of Representatives 
of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the "Children's Nutrition Assistance 
Act of 1992". 
TITLE I—HOMELESS CHILDREN'S 
ASSISTANCE 
SEC. 101. SHORT TITLE. 
This title may be cited as the "Homeless Children's Assistance 
Act of 1992". 
SEC. 102. EXPENDITURE OF FUNDS FOR ADMINISTRATIVE EXPENSES. 
Section 18(c)(2)(B)(i) of the National School Lunch Act (42 
U.S.C. 1769(c)(2)(B)(i)) is amended by striking "Each such organiza-
tion" and inserting "Each private nonprofit organization". 
SEC. 
1
0
3
. 
ALLOCATION 
OF 
RETURNED 
FUNDS. 
Section 7(a)(5)(B)(i) of the Child Nutrition Act of 1966 (42 
U.S.C. 1776(a)(5)(B)(i)) is amended— 
(1) by striking ", the Secretary shall—" and inseri;ing a 
colon; 
(2) by striking subclause (I) and insert;ing the following 
new clause: 
"(I) The Secretary^ shall allocate, for the purpose of provid-
ing grants on an annual basis to public entities and private 
nonprofit organizations participating in projects under section 
18(c) of the National School Lunch Act (42 U.S.C. 1769(c)), 
not more than $4,000,000 in each of fiscal years 1993 and 
1994. Subject to the maximum allocation for the projects for 
each fiscal year, at the beginning of each of fiscal years 1993 
and 1994, the Secretary shall allocate, from funds available 
under this section that have not been otherwise allocated to 
the States, an amount equal to the estimates by the Secretary 
of funds to be returned under this clause, but not less than 
$1,000,000 in each fiscal year. To the extent that amounts 
returned to the Secretary are less than estimated or are insuffi-
cient to meet the needs of the projects, the Secretary may, 
subject to the maximum allocations established in this 
subclause, allocate amounts to meet the needs of the projects 
Oct. 24, 1992 
[S. 2875] 
Children's 
Nutrition 
Assistance Act 
of 1992. 
42 u s e 1771 
note. 
Homeless 
Children's 
Assistance Act 
of 1992. 
42 u s e 1771 
note. 
106 STAT. 3364 
PUBLIC LAW 102-512—OCT. 24, 1992 
from funds available under this section that have not been 
otherwise allocated to States."; and 
(3) in subclause (II), by striking "then allocate," and insert-
ing "After making the allocations under subclause (I), the Sec-
retary shall Eillocate,". 
42 use 1769 
SEC. 104. EFFECTIVE DATE. 
This title and the amendments made by this title shall become 
effective on September 30,1992. 
?S.u"i^* 
TITLE II—WIC INFANT FORMULA 
Kronm' 
PROCUREMENT 
42 use 1771 
SEC. 201. SHORT TITLE. 
This title may be cited as the "WIC Infant Formula Procure-
ment Act of 1992". 
42 use 1786 
SEC. 202. WIC INFANT FORMULA PROTECTION. 
"°*®- 
(a) FINDINGS.— 
(1) the domestic infant formula industry is one of the 
most concentrated manufacturing industries in the United 
States; 
(2) only three pharmaceutical firms are responsible for 
almost all domestic infant formula production; 
(3) coordination of pricing and marketing strategies is a 
potential danger where only a very few companies compete 
regarding a given product; 
(4) improved competition among suppliers of infant formula 
to the special supplemental food program for women, infants, 
and children (WIC) can save substantial additional sums to 
be used to put thousands of additional eligible women, infants, 
and children on the WIC program; and 
(5) barriers exist in the infant formula industry that inhibit 
the entry of new firms and thus limit competition. 
(b) PURPOSES.—It is the purpose of this title to enhance com-
petition among infant formula manufacturers and to reduce the 
per unit costs of infant formula for the special supplemental food 
program for women, infants, and children (WIC). 
SEC. 203. DEFINITIONS. 
Section 17(b) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(b)) is amended by striking paragraph (17) and inserting the 
following new paragraphs: 
"(17) 'Competitive bidding* means a procurement process 
under which the Secretary or a State agency selects a single 
source (a single infant formula manufacturer) offering the low-
est price, as determined by the submission of sealed bids, 
for a product for which bids are sought for use in the program 
authorized by this section. 
"(18) 'Rebate' means the amount of money refunded under 
cost containment procedures to any State agency from the 
manufacturer or other supplier of the particular food product 
as the result of the purchase of the supplemental food with 
a voucher or other purchase instrument by a participant in 
each such agency's program established under this section. 
PUBLIC LAW 102-512—OCT. 24, 1992 
106 STAT. 3365 
"(19) 'Discount' means, with respect to a State agency that 
provides program foods to participants without the use of retail 
grocery stores (such as a State that provides for the home 
deUvery or direct distribution of supplemental food), the amount 
of the price reduction or other price concession provided to 
any State agency by the manufacturer or other supplier of 
the particular food product as the result of the purchase of 
program food by each such State agency, or its representative, 
from the suppher. 
"(20) *Net price' means the difference between the manufac-
turer's wholesale price for infant formula and the rebate level 
or the discount offered or provided by the manufacturer under 
a cost containment contract entered into with the pertinent 
State agency.". 
SEC. 204. PROCUREMENT OF INFANT FORMULA FOR WIC. 
Section 17(h)(8) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(8)) is amended by striking subparagraph (G) and inserting 
the following new subparagraphs: 
"(G)(i) The Secretary shall offer to soUcit bids on behalf of Contracts. 
State agencies regarding cost-containment contracts to be entered ^"**'*" 
^ 
into by infant formula meuiufacturers and State agencies. The Sec- re^ioM*" 
retary shall make the offer to State agencies once every 12 months. 
Each such bid solicitation shall only take place if two or more 
State agencies request the Secretary to perform the solicitation. 
For such State agencies, the Secretary shall solicit bids and select 
the winning bidder for a cost containment contract to be entered 
into by State agencies and infant formula manufacturers or suppli-
ers. 
"(ii) If the Secretary determines that the number of State 
agencies making the election in clause (i) so warrants, the Secretary 
may, in consultation with such State agencies, divide such State 
agencies into more than one group of such agencies and soHcit 
bids for a contract for each such group. In determining the size 
of the groups of agencies, the Secretary shall, to the extent prac-
ticable, take into account the need to maximize the number of 
potential bidders so as to increase competition aiaong infant formula 
manufacturers. 
"(iii) State agencies that elect to authorize the Secretary to 
perform the bid solicitation and selection process on their behalf 
and enter into the resulting containment contract shall obtain the 
rebates or discounts from the manufacturers or suppUers participat-
ing in the contract. 
"(iv) In soUciting bids and determining the winning bidder 
under clause (i), the Secretary shall comply with the requirements 
of subparagraphs (B) and (F). 
"(v)(I) Except as provided in subclause (II), the term of the 
contract for which bids are to be solicited under this paragraph 
shall be announced by the Secretary in consultation with the 
affected State agencies and shall be not less than 2 years. 
"(II) If the law of a State regarding the duration of contracts 
is inconsistent with subclause (I), the Secretary shall permit a 
1-year contract, with the option provided to the State to extend 
the contract for additional years. 
"(vi) In prescribing specifications for the bids, the Secretary 
shall ensure that the contracts to be entered into by the State 
agencies and the infant formula manufacturers or suppliers provide 
106 STAT. 3366 
PUBLIC LAW 102-512—OCT. 24, 1992 
for a constant net price for infant formula products for the full 
term of the contracts and provide for rebates or discounts for 
all units of infant formula sold through the program that are 
produced by the manufacturer awarded the contract and that are 
for a type of formula product covered under the contract. The 
contracts shall cover all types of infant formula products normally 
covered under cost containment contracts entered into by State 
agencies. 
"(vii) The Secretary shall also develop procedures for— 
"(I) rejecting all bids for any joint contract and announcing 
a resolicitation of infant formula bids where necessary; 
"(11) permitting a State agency that has authorized the 
Secretary to undertake bid solicitation on its behalf under 
this subparagraph to decline to enter into the joint contract 
to be negotiated and awarded pursuant to the solicitation if 
the agency promptly determines after the bids are opened that 
participation would not be in the best interest of its program; 
and 
"(III) assuring infant formula manufacturers submitting 
a bid under this subparagraph that a contract awarded pursu-
ant to the bid will cover State agencies serving no fewer than 
a number of infants to be specified in the bid solicitation, 
"(viii) The bid solicitation and selection process on behalf of 
the State agencies shall be conducted in accordance with any proce-
dures the Secretary deems necessary for the effective and efficient 
administration of the bid solicitation and selection process and 
consistent with the requirements of this subparagraph. The proce-
dures established by the Secretary shall ensure that— 
"(I) the bid solicitation and selection process is conducted 
in a manner providing full and open competition; and 
"(II) the bid solicitation and selection process is free of 
any real or apparent conflict of interest.". 
"(H) In soliciting bids for contracts for infant formula for the 
program authorized by this section, the Secretary shall solicit bids 
from infant formula manufacturers under procedures in which bids 
for rebates or discounts are solicited for milk-based and soy-based 
infant formula, separately, except where the Secretary determines 
that such solicitation procedures are not in the best interest of 
the program. 
"(I) To reduce the costs of any supplemental foods, the 
Secretary— 
"(i) shall promote, but not require, the joint purchase of 
infant formula among State agencies electing not to participate 
luider the procedures set forth in subparagraph (G); 
"(ii) shall encourage and promote (but not require) the 
purchase of supplemental foods other than infant formula under 
cost containment procedures; 
"(iii) shall inform State agencies of the benefits of cost 
containment and provide assistance and technical advice at 
State agency request regarding the State agency's use of cost 
containment procedures; 
"(iv) shall encourage (but not require) the joint purchase 
of supplemental foods other than infant formula under proce-
dures specified in subparagraph (B), if the Secretary determines 
that>— 
"(I) the anticipated savings are expected to be signifi-
cant; 
PUBLIC LAW 102-512—OCT. 24, 1992 
106 STAT. 3367 
"(II) the administrative expenses involved in purchas-
ing the food item through competitive bidding procedures, 
whether under a rebate or discount system, will not exceed 
the savings anticipated to be generated by the procedures; 
and 
"(III) the procedures would be consistent with the pur-
poses of the program; and 
"(v) may make available additional funds to State agencies 
out of the funds otherwise available under paragraph (1)(A) 
for nutrition services and administration in an amoimt not 
exceeding one half of 1 percent of the amounts to help defray 
reasonable anticipated expenses associated with innovations 
in cost containment or associated with procedures that tend 
to enhance competition. 
"(J)(i) Any person, company, corporation, or other legal entity 
that submits a bid to supply infant formula to carry out the program 
authorized by this section and announces or otherwise discloses 
the amount of the bid, or the rebate or discount practices of such 
entities, in advance of the time the bids are opened by the Secretary 
or the State agency, or any person, company, corporation, or other 
legal entity that makes a statement (prior to the opening of bids) 
relating to levels of rebates or discounts, for the purpose of influenc-
ing a bid submitted by any other person, shall be ineligible to 
submit bids to supply infant formula to the program for the bidding 
in progress for up to 2 years from the date the bids are opened 
and shall be subject to a civil penalty of up to $100,000,000, as 
determined by the Secretary to provide restitution to the program 
for harm done to the program. The Secretary shall issue regulations Regulations, 
providing such person, company, corporation, or other legal entity 
appropriate notice, and an opportunity to be heard and to respond 
to charges. 
"(ii) The Secretary shall determine the length of the disquali-
fication, and the amount of the civil penalty referred to in clause 
(i) based on such factors as the Secretary by regulation determines 
appropriate. 
"(iii) Any person, company, corporation, or other legal entity 
disqualified under clause (i) shall remain obligated to perform any 
requirements under any contract to supply infant formula existing 
at the time of the disqualification £uid until each such contract 
expires by its terms. 
"(K) Not later than the expiration of the 180-day period begin- Regulations, 
ning on the date of enactment of this subparagraph, the Secretary 
shall prescribe regulations to carry out this paragraph.". 
SEC. 205. PROCEDURES TO REDUCE PURCHASES OF LOW-IRON 
INFANT FORMin^ 
Section 17(f) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(f)) is amended by adding at the end the following new para-
graph: 
"(22) In the State plan submitted to the Secretary for fiscal Regulations, 
year 1994, each State agency shall advise the Secretary regarding 
the procedures to be used by the State agency to reduce the pur-
chase of low-iron infant formula for infants on the program for 
whom such formula has not been prescribed by a physician or 
other appropriate health professional, as determined by regulations 
issued by the Secretary.". 
106 STAT. 3368 
PUBLIC LAW 102-512—OCT. 24,1992 
SEC. 206. ASSISTANCE TO ENCOURAGE ADDITIONAL COST CONTAIN-
MENT EFFORTS. 
The second sentence of section 17(h)(2)(A) of the Child Nutrition 
Act of 1966 (42 U.S.C. 1786(h)(2)(A)) is amended— 
(1) by striking "formula 
shall—" and inserting "for-
mula—"; 
(2) by inserting "shall" after the clause designations of 
each of clauses (i), (ii), and (iii); 
(3) by striking "and" at the end of clause (ii); 
(4) by striking the period at the end of clause (iii) and 
inserting "; and"; and 
(5) by adding at the end the following new clause: 
"(iv) may provide funds, to the extent funds are not already 
provided under subparagraph (I)(v) for the same purpose, to 
help defray reasonable anticipated expenses associated with 
innovations in cost containment or associated with procedures 
that tend to enhance competition.". 
SEC. 207. TECHNICAL ASSISTANCE. 
Section 17(h)(8)(E)(ii) of the Child Nutrition Act of 1966 (42 
U.S.C. 1786(h)(8)(E)(ii)) is amended by striking "that do not have 
large caseloads and". 
42 use 1786 
SEC. 208. STUDY. 
Rej^rts 
Not later than April 1, 1994, the Secretary of Agriculture 
shall report to the Committee on Education and Labor of the 
House of Representatives and the Committee on Agriculture, Nutri-
tion, and Forestry of the Senate on— 
(1) State agencies that request the Secretary of Agriculture 
to conduct bid solicitations for infant formula under section 
17(h)(8)(G)(i) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(h)(8)(G)(i)) (as amended by section 204 of this Act); 
(2) cost reductions achieved by the solicitations; and 
(3) other matters the Secretary determines to be appro-
priate regarding this title and the amendments made by this 
title. 
PUBLIC LAW 102-512—OCT. 24, 1992 
106 STAT. 3369 
SEC. 209. TERMINATION. 
43 USC 1786 
note. 
The authority provided by this title and the amendments made 
by this title shall terminate on September 30, 1994, except with 
regard to section 17(h)(8)(J) of the Child Nutrition Act of 1966 
(42 U.S.C. 1786(h)(8)(J)) (as amended by section 204 of this Act). 
Approved October 24, 1992. 
LEGISLATIVE HISTORY—S. 2875: 
CONGRESSIONAL RECORD, Vol. 138 (1992): 
Oct. 5, considered and passed Senate and House.