Procurement Part IV Informal Procurement School Nutrition Programs

Procurement – Part IV Informal Procurement School Nutrition Programs November 2020

Informal Procurement • Also known as small purchase or three bids and a buy • Most restrictive threshold applies (federal, state, or local) • Solicit written quotes without issuing a formal bid • Must contact an adequate number or suppliers (3 or more) • Documentation is required

Procurement Thresholds DELAWARE Material & Non-Professional Services Less than $10, 000 – open market purchase $10, 000 - $24, 999 – written quotes (3) $25, 000 and over – Formal Bid Professional Services Less than $50, 000 – Open Market $50, 000 and over – Formal RFP Process USDA Material & Non-Professional Services $10, 000 or less – Open Market (micro purchase) $250, 000 or less – written/verbal quotes (2) $250, 001 and over – Formal procurement IFB RFP

Advantages of Informal Procurement • Public notice not required • Price or rate quotations can be opened at any time • Price quotes can be obtained from websites • Contract award is based on lowest price that meets specified requirements

Informal Procurement Log

Informal Procurement Awards • All contractors must receive the same information, including specifications Line Item • SFA can award based on: • Line-item (individual item) • Bottom-line (lowest overall price for all items) Bottom Line Make Award

Steps for a Good Procurement Step 1 Know the market for the things you need: • Do some research • Talk to prospective vendors • Seek out enough vendors (at least three) • Build quality business relationships

Steps for a Good Procurement Step 2 Plan out the procurement: • Draft a solicitation document • Include all specifications • One size does not fit all

Steps for a Good Procurement Developing Specifications When drafting the solicitation document, include specifications for: a) Food: • grade, weight, quality, packaging, nutrition standards, delivery requirement, Buy American*, etc. b) Supplies: • size, quality, packaging, etc. c) Equipment: • utility and space requirements, quality and features required, installation requirements, if applicable d) Services: • identify scope of services, certifications/licenses

Developing the Solicitation and Contract All Requirements in Solicitation and Contract Type of Contract – typically fixed-price Scope of Work Contract Period/Duration Contract Termination Provisions Contract Renewal Options

Steps for a Good Procurement Step 3 Start the Solicitation Process: • Identify and contact vendors (3 or more) • Provide written specifications • Exact same specifications must be provided to each vendor

Steps for a Good Procurement Step 4 Document vendor responses: • Vendor Name • Name of person providing the price quote • The price(s) quoted • Date price quote was obtained • Duration of price quote (it is recommended that SFAs request a specific timeframe, such as 30 days, so all vendor quotes are good for the same period of time)

Steps for a Good Procurement Step 5 Evaluate responses and award the contract: • Obtain three quotes • Evaluate responses to determine the responsive and responsible vendor with the lowest price • 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 • Award the purchase and document

What if Less Than 3 Responses are Received? • Examine your product requirements to ensure they are not unnecessarily restrictive. • Use additional methods to locate vendors/suppliers, e. g. , email known vendors, place advertisement in newspaper, follow-up with calls, etc. • Examine any other possible reasons for the limited reply. • If only one or two bids are received after the efforts discussed above, the purchase may be made if the cost is reasonable. • Document the bid process, including efforts made to secure additional bids, etc.

Steps for a Good Procurement Step 6 Monitor the contract: • Monitor invoices • Sign off on purchases only after inspection • Product not matching specifications • Audit invoices to verify that the prices charged match the prices quoted • Note returns, exchanges and variances

Thank you! This concludes the Procurement Part IV – Informal Procurement Be sure to take the short quiz and access the resources. Professional Standards: 0. 5 Hours Training Topic: 2000 Operations; 2400 Purchasing/Procurement