Procurement 101: Remind Me Why I Care?
Federal regulations require schools that participate in USDA child nutrition programs to follow strict procurement rules. Because schools receive federal funds to help operate their child nutrition programs, federal regulations mandate that school meal programs give as many people as possible the opportunity to get your business.
There are different requirements depending on the dollar amount you are spending and what type of commodity (food, equipment, services, supplies, etc.) you are purchasing. Let’s briefly review some of the more common items schools would procure (this is not meant to be an exhaustive list).
Foods/Perishables
Foods and perishables are typically purchased one of three ways:
Micro purchase—one aggregate transaction that does not exceed $10,000. This is typically used in emergency situations, but some states are more liberal than others on micro purchase use. While the federal threshold is $10,000, check with your state or municipality as they may be more restrictive.
Informal—annual food purchases do not exceed $250,000. Commonly referred to as “Three Bids and a Buy”. Schools get 3 quotes, and then award the quote to the lowest bidder.
Formal—annual food purchases exceed $250,000. Two types of bids are typically used for this type of food purchase. One is an Invitation for Bid (IFB), the other is a Request for Proposal (RFP). The main difference between these two processes is that food purchases using the RFP method allows for negotiation. If you use the IFB method, the school must accept the lowest bid. Period.
Equipment
Procuring equipment follows the informal and formal processes, except that the dollar amounts are not the same as food/perishables. Additionally, it is important to note that when a school purchases a piece of equipment that is over a certain dollar amount (often referred to as “threshold”) you must get approval for the equipment purchase from your State Agency. Many state agencies have a pre-approved equipment purchases list on their website which speeds up the approval process.
Supplies
Many states have a set dollar amount that triggers informal and formal procurement processes. In addition, some schools also have a set threshold that is more restrictive than either state or federal requirements. A few examples of supplies include: disposables, kitchen utensils, large quantity cooking pans, and trays used to serve students.
Services
Like supplies, many states have a set dollar amount for purchasing services using informal and formal procurement processes. Examples of services include: menu software programs, point of sale (POS) software, uniform contracts, maintenance contracts, dish machine services, and all types of consulting services.
The procurement process in child nutrition programs can be daunting. Pro•Team wants to assure that you have the most up to date information and tools to assist you with your questions about procurement, or procurement review preparation. We’re here to help!
Wondering if you can get help with your procurement process?
Contact a Pro•Team expert today to discuss how we can help save you time and money.
info@proteamadvisors.com
Toll-Free: 844-662-3767, ext. 101