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““Three Bids and a Three Bids and a Buy”Buy”
Connecting SFAs and Farmers Through Competitive Procurement
Presented by
Randy JonesDepartment of Public Instruction
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What is Procurement?What is Procurement? “Procurement” is a “process” of purchasing of goods or
services.
School “needs” will help identify requirements used to draft “specifications”.
Once you have your specifications are drafted
you will use them to “Solicit Pricing” from producers
The most “Competitive Price” (i.e. Lowest price or cost) that meets those specifications is awarded the contract
“Award the Contract” and “Manage the Contract”
Follow applicable “Federal and State regulations”
Documentation your “Procurement” and retain your “Records”
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What is Competition?What is Competition? "Competition" is the foundation for all properly conducted
procurements, regardless of dollar value.
Competition is not a method of procurement, but a condition of the environment in which the procurement occurs.
“Competitive Procurement” - means that all procurement transactions, including small purchases, must be conducted in a manner that maximizes free and open competition.
"Free and open competition” - means that all suppliers: are "playing on a level playing field," and have the same opportunity to compete.
Procurement procedures must not: unduly restrict competition, or eliminate competition.
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RegulationsRegulations
Schools must comply with: 7 CFR Part 3016 and Part 3019;USDA Program regulations (7 CFR Part 210, Part
215, and Part 220), guidance, and instructions; State law, regulations, and policies that are not
in conflict with Federal requirements; andLocal law, regulations, and policies that are
not in conflict with Federal and State requirements.
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Small Purchase Small Purchase ThresholdThreshold
The line that separates small purchases from big purchases is called the “small purchase threshold”.
Small purchase threshold = $150,000.
Purchases costing less than the small purchase threshold is called, “Informal Procurement”
Purchases costing more than or equal to the small purchase threshold is called, “Formal Procurement”
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Procurement MethodsProcurement MethodsSmall Purchase – (Informal)
(a.k.a. 3 bids and a buy )
Invitation for Bid (IFB) – (Formal)
Request for Proposal (RFP) – (Formal)
Sole Source
Emergency Procurement
Request for Information (RFI)
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Geographic Preference Geographic Preference The Farm Bill amended the National School
Lunch Act to allow schools to apply a geographic preference when procuring unprocessed locally grown or locally raised agricultural products.
Unprocessed products mean those agricultural products that retain their “Inherent Character”.
This is used for giving preference to but not excluding producers
This is useful when procuring for the Farm to School Program.
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When to use Geographic When to use Geographic Preference Preference
You are not required to use “Geographic Preference”
Is your purchase over $150,000?
Do you have enough competition to purchase locally?
Do you have producers and suppliers outside what you consider “local” contacting you to sell you unprocessed products?
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Informal Procurement in Seven Informal Procurement in Seven Steps!Steps!
“Three Bids and a Buy”
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Review of Informal Review of Informal Procurement Procurement
Estimated value of the purchase is less than $150,000
Schools have a lot more flexibility in how they solicit bids from producers. No public notice requirementNo closed bid requirementNo public opening requirement
Informal bidding is always based on price!
Requires less time to prepare and complete the procurement process
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Step OneStep OnePre-Bid InstructionsPre-Bid Instructions
Notify prospective producers of your plan to purchase products
This allow producers to know that you will be contacting them in the near future to get pricing
Schools will want to work with enough producers to ensure that when they getting pricing, they can get pricing from at least three producers.
Build quality business relationships with producers
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Steps Two, Three and Four Steps Two, Three and Four Planning, Specifications, and DocumentationPlanning, Specifications, and Documentation
Step 2 - Planning your bid: Write down the product specifications in a purchase log
Step 3 - Starting the bid process: Contact producers (by phone, email, fax, in person, or
mail) and provide them with written product specifications or if calling, read off the written specification from your
purchase log.
Step 4 - Document producer responses: Name, Contact Method, Who provided the price quote,
The price quoted, Date price quote was obtained and Duration of price quote
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Steps Five and Six Steps Five and Six Price Quotes and AwardPrice Quotes and Award
Step 5 - Obtain price quotes from at least three producers (i.e. “three bids and a buy”)
Step 6 - Award the contract/purchase to the most responsive and responsible producer with the lowest price.
What is a responsive and responsible producer?
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Step SevenStep SevenMonitor invoices and products to insure that bid prices, product Monitor invoices and products to insure that bid prices, product
quantity and quality are being honoredquantity and quality are being honored
Monitor invoices, product quantity and quality on a
consistent basis
Sign off on purchases only after they have been fully inspected
Product not matching specifications provided in bid should be returned or exchanged.
Note returns or exchanges for future producer evaluation
Audit invoices and confirm that prices match what was quoted during the purchasing process.
Variances should be corrected Note variances for future producer evaluation
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Three Bids and a Buy: Template
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Questions?Questions?
Thank You! Randy Jones
School Nutrition TeamContract Specialist/ProcurementDepartment of Public InstructionE-Mail: [email protected]
Phone: 608-267-2277
In accordance with Federal law and the United States Department of Agriculture policy, this institution is prohibited from discriminating on the basis of race, color, national origin, sex, age, or disability.
To file a complaint of discrimination, write USDA, Director, Office of Adjudication, 1400 Independence Avenue, S.W., Washington D.C. 20259-9410 or call toll free (866)-632-9992 (Voice). Individuals who are hearing impaired or have speech disabilities may contact USDA through the Federal Relay Service at (800)-977-8339; or (800)-845-6136 (Spanish). USDA is an equal opportunity provider and employer.