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1 Three Bids and a Three Bids and a Buy” Buy” Connecting SFAs and Farmers Through Competitive Procurement Presented by Randy Jones Department of Public Instruction

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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.