Moving away from vendor loyalty and towards competition Presented by Randy Jones Department of Public Instruction 1.

Moving away from vendor loyalty and towards competition

Presented by

Randy JonesDepartment of Public Instruction

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DPI’s Procurement Webpage: http://fns.dpi.wi.gov/fns_procurement

Informal Procurement Checklist - (Purchase Costing Less Than $150,000) 

Informal Procurement Log and Evaluation Matrix (with instructions) - (Purchase Costing Less Than $150,000)

Informal Procurement Template - (Purchase Costing Less Than $150,000)

National Food Service Management Institute's (NFSMI's) First Choice: A Purchasing Manual for School Food Service

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1. “What do you need?”

2. “Do I have the budget to pay for it?”

These questions bring about a set of actions that:take place prior to, during, and after your procurement event.

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Have you ever run a race?

Have you ever known someone in a cooking contest?

Have you ever watched in a football game?

Racing, cooking contests, and football games are all forms of competition.

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"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.

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“Competitive Procurement”

"Free and open competition”

Procurement procedures must not: unduly restrict competition, or eliminate competition.

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Procurement is the process of purchasing of goods or services.

Best possible price that meets the needs of the School’s

Follows all Federal and State regulations

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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 requirements.

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The line that separates small purchases from big purchases is called the “small purchase threshold”.

Small purchase threshold = $150,000.

Purchases costing > small purchase threshold is called, “Informal Procurement”

Purchases costing ≤ small purchase threshold is called, “Formal Procurement”

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Small Purchase Invitation for Bid (IFB) Request for Proposal (RFP) Sole Source Emergency Procurement

Request for Information (RFI)

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Informal Procurement

Formal Procurement

3 Bids and A Buy IFB RFP

> $150,000 ≤ $150,000

Small Purchase Competitive Sealed Bid

Competitive Proposal

Responsive bids will differ only by price Cost is not the sole determining factor for award. Proposal includes evaluation criteria and weighting (points).

School contacts Vendors for Pricing

Public Notice Requirement

fixed-price contracts: a firm-fixed-price contract,a fixed-price contract with economic price adjustment, ora fixed-price contract with prospective price redetermination.

Cost plus a fix fee contract: Not Allowed Cost plus a fix fee contract: Allowed

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A situation in which there is only one known capable supplier of a good or service.

The key to determination of "sole source" is the documentation of the search for other sources for the required good or service.

Involves noncompetitive proposals

Milk Bids sometimes end up being Sole Source due in part to limited number of distributors

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A condition which creates an immediate and serious need for goods or services, When its appropriate redress precludes the use of normal

competitive procurement methods, and When its existence seriously threatens the operations of an SFA.

SFA's failure to properly plan is never a reason for a emergency procurement.

Involves noncompetitive proposals

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RFI is a standard business process whose purpose is to collect written information about the capabilities of various suppliers.

RFI is used to gather information to help make a decision on what steps to take next.

Schools use RFIs in procurement of “End Products”.

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SFA and vendor will need to work together to ensure that the contract is adhered to properly by both parties.

The contract will need to be managed and regularly reviewed and audited to make sure it continues to meet the requirements originally established.

Good contract management is also about continually improving, developing and building good relationships, as well as day-to-day administration and monitoring.

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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 vendors

This is useful when procuring for the Farm to School Program.

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“Line Item” – a vendor is awarded the contract based on individual pricing for each item contained in the solicitation. The solicitation may have contained several items but

the award will be based on lowest individual price quoted for each item.

“Total Cost” – a vendor is awarded the contract based on overall pricing of all the items contained in the solicitation. The solicitation may have contained several items but

the award will be based the over all lowest price quoted for all the items.

A good specification should: Identify minimum requirements. Allow for a competitive bid.

Specification Sources Collect information from the end user i.e.

students Collect product information from the

industry (brochures, catalogs, specs, etc.). Look for specification information from other

government entities. Call on other “experts” in the purchasing

community for help.

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Types of purchasing associations:Informal school associationsCooperative Educational Service Agency

(CESA) Cooperatives (co-op)Group Purchasing Organizations (GPO)Other Purchasing Organizations

Purchasing Agent

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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 requirementNo closed bid requirementNo public opening requirement

Informal bidding is always based on price!

Requires less time to prepare and complete the procurement process

“Three bids and a buy”

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Notify prospective vendors of your plan to purchase products

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 getting pricing, they can get pricing from at least three vendors.

Build quality business relationships with vendors

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Step 2 - Planning your bid: Write down the product specifications in a purchase

log

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, read off the written specification from your

purchase log.

Step 4 - Document vendor 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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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?

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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 vendor evaluation

Audit invoices and confirm that prices match what was quoted during the purchasing process.

Variances should be corrected Note variances for future vendor evaluation

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Vendor Name:

Items to be Purchased: Product specifications Delivery Frequency (If

applicable) Packaging

Quantity Expected

to Buy

Unit Price

Extended Price

(Quantity x Unit Price)

*VS ()

Unit Price

Extended Price

(Quantity x Unit Price)

*VS ()

Unit Price

Extended Price

(Quantity x Unit Price)

*VS ()

1.

2.

3.

4.

5.

6.

7.

8.

TOTAL $ $ $ *Vendor Selected (VS) Method of contact: Phone, Fax, Email or In Person

Name of person quoting pricing: Duration quoted pricing is good for: Date contacted: Additional Notes:

Signature of person completing this form:

Date:

* Vendor Selected (VS); you can award all items to one bidder (lowest total price) or you can award bid on a line item basis (lowest item price).

Three Bids and a Buy: Template

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Request for Pricing (Purchasing record for bids under $100,000.00)

Purchaser Information School Name: __________________________________ Contact Person: __________________________________ Phone Number: __________________________________ Fax Number: __________________________________ Address: __________________________________ __________________________________ Email Address: __________________________________ Product Information: Product Name: __________________________________ Product specifications: ___________________________________________________________ ___________________________________________________________ Delivery Frequency (If applicable): _____________________ Packaging: __________________________ Quantity:__________________________

Vendor/Bidder Information: Company Name: ___________________________________ Phone Number: ( ____ ) _____ - _______ Address: _________________________________________

Price Quote: Quantity: ____________ Unit Price: ____________ Extended Price (Quantity x Unit Price): _____________

Name of person quoting price: _______________________ Duration quoted pricing is good for: ___________________ Signature of authorized person to quote pricing: X_____________________________ Date: _____________

Responding to Price Quote Please fax/email/mail price quote back to _________________ (Contact name) Fax/email/mail: __________________________________________________ Return price quote by _____/_____/20___ (Due Date) Price quote after due date above will be ineligible for consideration.

Three Bids and a Buy:Moving away from vendor loyalty and towards competition (Informal Purchasing Process)

This is a great tool for purchasing but the key to it’s success is for the purchaser to remain unbiased during the purchasing process.

Remember its all about competition!

Purchasing doesn’t have to be complicated but it does need to be documented and fair!

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Randy JonesSchool Nutrition Team

Contract 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.