local procurement afternoon session

ProcuringLocal FoodsFor Child Nutrition ProgramsBuying Local Food | January 29, 2015

Welcome!

WI Department of Agriculture

Today’s Speakers

Vanessa Zajfen, Farm to School Regional Lead – Midwest USDA Farm to School Program

Sarah Elliott, WI Farm to School Director

WI Department of Agriculture, Trade, and Consumer Protection

Randy Jones, Senior Contract Specialist – “Procurement Guy”WI Department of Public Instruction


Ice Breaker Activity


Basics of Competitive Procurement


What is Procurement?

Procurement is the purchasing of goods and services. The procurement process involves:

Planning Drafting Solicitation

Advertising the Procurement

Awardinga Contract

Managingthe Contract

ProcurementPrinciples


Procurement RegulationsProcurement regulations can be found in:

7 CFR Part 3016 and Part 3019;

program regulations governing procurements can be found in: the National School Lunch Program regulations at 7 CFR Part 210, the Special Milk Program regulations at 7 CFR Part 215, the School Breakfast Program regulations at 7 CFR Part 220, and the Food Distribution regulations at 7 CFR Part 250.

USDA Program regulations found in guidance (i.e. memos)

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 requirements.


Why are Procurement Rules Important?

• Full and open competition is essential to ensure low cost and high quality of goods and services

• To ensure that the program receives maximum benefits and taxpayer dollars are well spent!


Competition "Competition" is the foundation for all properly conducted

procurements including local purchases, regardless of dollar value.

A “Competitive Purchase” – includes buying local and it means that ALL purchases, 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.


Noncompetitive Forms of Procurement

Sole SourceOnly one available source to purchase the product or serviceDocument that you tried to find additional sources Try to negotiate the best price

Emergency Procurement Emergency event causes a need to purchase the product or

service Try to negotiate the best price This is a short term solutionDevelop plan for competitively procurement in near future


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.


Work Together….

Cooperative Purchasing is a viable alternatives to the conventional “go-it-alone” purchasing

process.

Networking - A secondary benefit.Cooperative Purchasing can serve as a forum for

the exchange of ideas beyond purchasing.


Local Food Procurement


Objectives

Participants should understand that:

• Solicitations and contracts are powerful tools to buy local food

• There are multiple types of solicitations and contracts

• Each solicitation and contract can be designed and/or used to

achieve specific farm to school goals


Question

How many of you write the solicitations for the school meal program?

ORManage the procurement process?


When Writing a Farm to School Solicitation

• You will need to:

1. Choose a solicitation tool

2. Design a solicitation tool

• To do that you need to know:

» What you are trying to accomplish?

» What results each tool can achieve for you?

» What type of results (decisions) are you ok with?


What do you Want to Accomplish?• Identify one vendor for all your local food needs!

• Identify multiple vendors for your local food needs!

• Find the most affordable local products!

• Provide seasonal pricing for school menus!

• Provide flexibility to choose vendors based on quality not just price!

• Encourage vendor partnerships that help you build a local sourcing program!

• Provide educational opportunities for students such as farm visits and more!

• Identify local products that support new meal pattern fruit and veg regs!

• Allow you to buy school garden grown foods for the NSLP!

• Get you a roadmap for your local sourcing program!

• And more!


Solicitations for Local Products


What Does Local Mean?

• Within a radius

• Within a county

• Within a state

• Within a region

A district’s definition of local may change depending on the:

• Season• Product• Special events


What Types of Products?


Local as a Specification

• “This RFP is restricted to producers within the state.”

• “This RFP is for only Montana grown products for Montana grown week”

• “We are soliciting bids from producers within a 150 mile radius.”

• “We are soliciting bids for Michigan grown products.”

• “Only products grown within a 300 mile radius will be accepted.”


Procurement Methods

(Federal Threshold = $150,000)

Small Purchase(Requires price quotes from

at least 3 bidders)

Sealed Bids (IFBs)& Competitive

Proposals (RFPs)(Requires public advertising)

Informal Formal

≤ Small Purchase Threshold >


Informal Solicitations


What is Your Small-Purchase Threshold?


The Informal Procurement Process

solicitation


Informal Solicitations• Three vendor minimum

• SFA selects the three vendors

» Target vendors that supply the local products you need

• Keep track of:

» What you asked each vendor

» Method used to notify vendors

» Vendors notified

» Vendors responses

» The award


Splitting Procurements

• SFAs cannot arbitrarily divide purchases to fall below the small purchase threshold.

• In some instances, however, characteristics of a product or market justify the need to separate it from the overall food procurement.

» Such as Harvest of the Month Programs, taste tests, products for a Farm to School Month promotion.


The Formal Procurement Process


Will you use an…

Invitation for BidOR

Request for Proposals


Invitation for BidIFB is used when the decision for award will be based on price alone. Solicitor is

inviting vendors to propose their best price for a very specific item.

• Advantages:» Straight forward

» Price is the only determining factor

• Easy to select a winning bid

• Disadvantages:» Price is the only determining factor


Request for Proposal

An RFP is requesting project proposals from vendors and/or industry experts.

An RFP is often used when a district doesn’t have a specific specification that it is looking for and they want the bidders to respond with proposals outlining what they are able to offer.

It is used when a district wants to take into account price along with other factors such as vendor reputation, differences in service

(works with 100 local farmers) or value added propositions (such as can provide students farm visits).


RFP, continued…• Advantages:

» Price is a key factor, but not only factor

» Vendors can even propose new and more advantageous pricing structure(s)

» You may get much more value and/or services

» Receive multiple proposals with different ideas about how to achieve the RFP’s stated goal

• The roadmap idea

• Disadvantages:» Decisions are open to districts interpretation of value and fair cost

• This can make accounting departments nervous

» Since decisions are not entirely based on price it can leave a decision open to criticism


Another Option: Forward Contracts


Forward Contracts

• Purchasing product before harvest:

» Provides producer with a guarantee

» Ensures the farmer will plant and pack the supply needed

• Follows competitive procurement requirements:

» 3 quotes

» Pricing structure proposed

• If used, a pricing index is determined and used by all bidders


Any questions at this point?


GAP: Good Agricultural Practices

A USDA perspective


GAP • USDA Farm to School Program – Does not require GAP

• USDA AMS and DoD Programs – Do require GAP

• State Educational Agency – Can require schools buy from GAP vendors; in Wisconsin it is not a state requirement

• State Department of Public Health – State food code managed by counties may also have such requirements; Wisconsin Food Code does not require GAP

• Distributors- May or may not require their vendors have GAP

• SFAs- May or may not require GAP in solicitations


10 minuteBreak


Specifications Activity


Using Geographic Preference?


Geographic Preference Regulation: Farm Bill amended the National School Lunch Act

to allow institutions receiving funds through the Child Nutrition Programs to apply a geographic preference when procuring unprocessed locally grown or locally raised agricultural products.

Regulation: Provided USDA Food Nutrition and Services (FNS) the authority to issue a final rule on geographic preference; USDA FNS then provided instructions to purchasing institution

(i.e., the school or the state agency purchasing on behalf of the school) on how to apply a geographic preference procurement option.

Limits: Geographic Preference – can only be applied to the procurement of “unprocessed

agricultural products” that retain their “inherent character”.


What Is “Unprocessed”?

“Unprocessed” agricultural products retain their inherent character. These are the allowed food handling and preservation techniques:

• Cooling, refrigerating, and freezing

• Peeling, slicing, dicing, cutting, chopping, shucking, and grinding

• Forming ground products into patties

• Drying and dehydrating

• Washing, packaging, vacuum packing, and bagging

• Adding preservatives to prevent oxidation

• Butchering livestock or poultry

• Pasteurizing milk


Let’s Play the “Inherent Character”Game!


How to Incorporatea Geographic Preference

1) Define local.

2) Determine what type of procurement method to use.

3) Decide how much “preference” local products will receive.

4) Be sure your solicitation makes perfectly clear how the preference will be applied during evaluation.


Do you need to use Geographic Preference?It depends…

“Geographic Preferences” is great for providing local producers with some sort of “advantage” either by

assignment of points for “proposals” or reduction in “bid price” for evaluation purposes when needed.

However is this always needed for local purchases?

How about using the 3 bids and a buy procurement tool? Could you just solicit 3 or more local bids from your defined

geographic area? Is this compliant with State and Federal procurement

regulations?


Deconstructing a successfullocal food bid


Procuring and Using School Garden Produce


Using a Produce Auction

• Conduct an informal procurement

• Gather 3 quotes

• Make sure you document it!


Other USDA Farm to School Resources• USDA Farm to School Website (at www.fns.usda.gov/farmtoschool):

» USDA Procurement guide (under resources)

» Fact Sheets

» Resource Lists

» Grant Program Information

» Webinar Recordings

• Farm to School Census • USDA Farm to School E-Letter

» Latest News

» Grant Updates

» Webinar Announcements

http://www.fns.usda.gov/farmtoschool


Other WI Farm to School Resources• WI Farm to School Toolkits

» http://www.cias.wisc.edu/toolkits/

• WI Department of Public Instruction website» http://fns.dpi.wi.gov/fns_f2s

• Wisconsin Farm to School newsletter

• Others?

http://www.cias.wisc.edu/toolkits/

http://fns.dpi.wi.gov/fns_f2s


Contact Information

Vanessa Zajfen, Farm to School Regional Lead – Midwest

[email protected]

(312) 353 - 0683

Sarah Elliott, WI Farm to School Director

[email protected]

(608)-224-5046

Randy Jones, Senior Contract Specialist – “Procurement Guy”

[email protected]

(608)-267-2277

mailto:[email protected]




Thank you!

local procurement afternoon session

Documents

wi farm

procurement process

procurement procedures

usda program regulations

procurement rules important

open competition

food distribution regulations

school meals