“Three Bids and a Buy”

1. “Three Bids and a Buy” Competitive Procurement and the Fresh Fruit and Vegetable Program Presented by Randy JonesDepartment of Public Instruction

2. What is Procurement? Procurement is a “process” used to purchase goods or services. Identifying the school’s “needs” Those needs are used to draft “specifications” Once your specifications are drafted you will use them to “Solicit Pricing” from vendors A contract is awarded to the vendor with the “lowest price or cost” You will need to “Manage the Contract” At the end of the contract term you will close out the contract Finally, you will need to maintain proper “documentation” and retain that documentation for “three years” from the date of last payment

3. 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.

4. Procurement Regulations Procurement regulations can be found in: • Federal law, regulations, and policies such as; • 7 CFR Part 3016 and Part 3019; • USDA Program regulations (7 CFR Part 210, Part 215, and Part 220), guidance memos, and other types of instructions; • State law, regulations, and policies that are not in conflict with Federal requirements; and • Local law, regulations, and policies that are not in conflict with Federal and State requirements. • Which rules to follow? – Use the regulation that is most restrictive.

5. Small Purchase Threshold 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 uses the “Informal Procurement Method” Purchases costing more than or equal to the small purchase threshold uses the “Formal Procurement Method”

6. Procurement Methods • Small Purchase – (Informal Procurement Method) • (a.k.a. 3 bids and a buy ) • We will discuss later in this presentation • Invitation for Bid (IFB) – (Formal Procurement Method) • Contract award is based on lowest price or cost • Request for Proposal (RFP) – (Formal Procurement Method) • Contract award is based on highest scoring proposal • Sole Source • Only one available source to purchase the product or service • Noncompetitive – try to negotiate the best price • Emergency Procurement • Emergency event causes a need to purchase the product or service • Noncompetitive – try to negotiate the best price • This is a short term solution • Develop plan for competitively procurement in near future

7. Buy American • Schools participating in the federal school meal programs are required to purchase domestic commodities and products for school meals to the maximum extent practicable. • Domestic commodity or product means an agricultural commodity that is produced in the US and a food product that is processed in the US substantially (at least 51 percent) using agricultural commodities that are produced in the US (7CFR210.21, 220.16). • Actions that SFAs can take to comply with the Buy American requirements: • Including a Buy American clause in all procurement documents (product specifications, bid solicitations, requests for proposals, purchase orders, etc.); • Monitoring contractor performance; • Requiring suppliers to certify the origin of the product; • Examining product packaging for identification of the country of origin; and • Asking the supplier for specific information about the percentage of U.S. content in the food product.

8. 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”. Inherent Character allows for cooling; refrigerating; freezing; peeling, slicing, dicing, cutting, chopping, shucking, and grinding; drying/dehydration; washing; packaging and the pasteurization of milk. This is used as a preference and not for excluding vendors

9. Informal Procurement in Seven Steps! “Three Bids and a Buy”

10. Overview of Informal Procurement • Estimated value of the purchase is less than $150,000 • Schools have a lot more flexibility in how they solicit bids from vendors. • No public notice requirement • No closed bid requirement • No public opening requirement • Requires less time to prepare and complete the procurement process • Pricing quotes can be written or verbal

11. Step OneVendor Management Building quality business relationships with vendors Communicate to vendors over the school year sourcing needs and when potential bidding may occur. This allow vendors to know that you will be contacting them in the near future to get pricing Schools will want to work with enough vendors to ensure that when they need pricing, they can get pricing from at least three vendors. Proper vendor management will save schools time when it comes to soliciting pricing throughout the school year

12. Steps Two, Three and Four Planning, Specifications, and Documentation • Step 2 - Planning your bid • Write down the product specifications • Step 3 - Starting the bid process • Contact vendors (by phone, email, fax, in person, or mail) and • provide them with written product specifications or • if calling or in person, read off the written specification from your purchase log. • Step 4 - Document vendor responses • Write down vendor name, contact method, who provided the price quote, price quoted, date price quote was quoted and duration of price quote

13. Steps Five and Six Price Quotes and Award • Step 5 - Obtain price quotes from at least three vendors (i.e. “three bids and a buy”) • Step 6 - Award the contract/purchase to the most responsive and responsible vendor with the lowest price. • What is a responsive and responsible vendor? • A “responsive vendor” is able to meet the requirements of the solicitation • A “responsible vendor” is willing and capable of furnishing the goods or services solicited.

14. Step SevenMonitor invoices and products to insure that bid prices, product quantity 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 • note returns or exchanges Audit invoices and confirm that invoice prices match the prices in the awarded contract. • note variances

15. Three Bids and a Buy: Template

16. Questions? Thank You! Randy Jones School Nutrition Team Contract Specialist/Procurement Department of Public Instruction E-Mail: randall.jones@dpi.wi.govPhone: 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.