Local Procurement. Welcome! Targeting Local Foods Through a Fair, Open, and Competitive Procurement. May 25, 2016

Transcription

1 Local Procurement Targeting Local Foods Through a Fair, Open, and Competitive Procurement May 25, 2016 Welcome!

2 Overview Hello and welcome! Procurement basics refresher Survey the audience Defining local and where to find local foods Ways to buy local products Resources and questions

3 I m not leaving until I On a sticky note, fill in this sentence: In order to be a local procurement expert, I m not leaving this room until I.

4 What Is Procurement? Procurement is the purchasing of goods and services. The procurement process involves: Planning Drafting Specifications Advertising Procurement the Procurement Principles Awarding a Contract Managing the Contract

5 Why are Procurement Rules Important? To ensure that program benefits (and taxpayer dollars!):» Are received by eligible schools and children» Are used effectively and efficiently, with no waste or abuse

6 Informal Procurement Methods Small Purchase Threshold > Federal Threshold = $150,000 MA = $35,000 Municipality = varies Formal Small Purchase (Requires price quotes from at least 3 bidders) Micro Purchase Noncompetitive Purchase (value of purchase may not exceed $3,500) Sealed Bids (IFBs) & Competitive Proposals (RFPs) (Requires public advertising)

7 The Informal Procurement Process

8 The Formal Procurement Process

9 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.

10 1) Competition 4 Key Concepts 2) Knowledge of Federal, State, and Local Regulations 3) Responsive and Responsible 4) Buy American

11 1 Competition Competition is essential to ensure the best cost and quality of goods and services.

12 2 State and Local Procurement Policies Schools must be aware of procurement requirements at the federal, state and local levels and are responsible for complying with all levels of regulations. In some cases, state and federal regulations may be in conflict with each other.

13 3 Responsive and Responsible Awards must be made to vendors that are responsive and responsible. Responsive means that the vendor submits a bid that conforms to all terms of the solicitation. Responsible means that the vendor is capable of performing successfully under the terms of the contract.

14 4 The Buy American Provision The National School Lunch Act requires SFAs to purchase domestically grown and processed foods to the maximum extent practicable.

15 Section Summary Procurement is a process, not a one-time event Micro purchase vs. Informal vs. Formal Methods Ensure competition- Price! Quality! Follow Federal, State, and Local Procurement Policies Make sure bidders are responsive and responsible Domestic grown and processed

16 Audience Survey: Procurement Basics

17 Is documentation always required?

18 If a vendor cannot meet a school s specifications or requirements, is the vendor responsive?

19 Can a school award a contract if only one bid was received?

20 Can a school require a vendor to provide references?

21 Are there other procurement rules besides Federal regulations that schools must follow?

22 Does your municipality have a lower smallpurchase threshold?

23 What is your applicable small purchase threshold?

24 Must schools always award to the lowest bidder?

25 Who defines local?

26 Can a school award a contract to a local vendor without conducting a procurement?

27 What food items do procurement regulations apply to?

28 Farm to School & Local Procurement

29 Local Food Food Education

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32 Defining Local & Finding Local Foods

33 Which part of the dollar are we talking about? Cash Reimbursement DoD Fresh USDA Foods

34 Who defines local? School food authorities What Does Local Mean? What are you trying to accomplish? Is there state based initiative around local food purchasing that you would like to align with? Do you want to couple local purchases with farm visits and have personal relationships with suppliers? Do you want to make a definition that aligns with neighboring districts?

35 Defining Local 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

36 Defining Local: An Exercise 1. What goals do you hope to achieve with your definition of local? 2. How would you define local for fruits and vegetables in your area to achieve this goal? 3. Would your definition need to change for animal based proteins? 4. Would your definition need to change if you primarily wanted to source direct from farmers versus intermediaries?

37 What Types of Products?

38 What s Already Local on Your Menu? Look at your records. Ask your suppliers whether they purchase local products. What Could Be Local? Conduct a menu audit.» Are there items that could easily be replaced with local products? Think about ways to integrate.» Harvest of the Month program» New recipe development» Salad Bar» Seasonal Cycle Menu Include tracking of local in future contracts.

39 Where to Get Local Foods Through distributors Through food service management companies From food processors Through USDA Foods/DoD Fresh From individual producers From producer co-ops/ food hubs From school gardens

40 Resources for Finding Local Products Online tools» Market Maker, FoodHub, FarmLogix USDA Resources» Farm Service Agency» Cooperative Extension» Farm to School Census State Resources» MA Farm to School Project» MA Department of Agricultural Resources Producer Associations Food hubs Farmers Markets

41 MA Seasonality Chart MA Department of Agricultural Resources website

42 Requests for Information Survey the market to understand:» Quantity available» Price point» Seasonal availability» Willingness to work with schools» Whether geographic preference is necessary» Who the producers are! Collaborate with surrounding districts Work with a community partner

43 Sample RFI

44 What not just SAY local? Ex. MA grown carrots, fresh sticks peeled, ready to use

45 Local as a Specification X District is soliciting bids for Massachusetts-grown products. This RFP is restricted to producers from within the state. We are soliciting bids from producers within a 100 mile radius. Only products grown within a 75 mile radius will be accepted.

46 What the Legislation Says Section 2403 of the 2008 Farm Bill says: The Secretary shall allow institutions receiving funds under this Act to use a geographic preference for the procurement of unprocessed agricultural products, both locally grown and locally raised.

47 Local as a Preference X District operates a Farm to School Program, and prefers to support local and regional producers. We seek opportunities to incorporate local food into our program whenever possible. Preference will be given to vendors that can document source of origin, and procure product from within the state.

48 Buying Local Food using the Micropurchase Threshold

49 Informal Procurement Methods Small Purchase Threshold > Federal Threshold = $150,000 MA Threshold = $35,000 Municipality = varies Formal Small Purchase (Requires price quotes from at least 3 bidders) Micro Purchase Noncompetitive Purchase (value of purchase may not exceed $3,500) Sealed Bids (IFBs) & Competitive Proposals (RFPs) (Requires public advertising)

50 Micro-purchase Threshold Use it when: Value of a purchase is less than $3,500 What to do: Write a product specification and any additional vendor requirements Make a purchase from a responsive and responsible vendor at a reasonable price that meets your definition of local Requirements & Reminders Document the purchase (file away product specification/invoice/receipt) Do not arbitrarily split procurements

51 Targeting Local through an Informal Procurement

52 Informal Procurement Methods Small Purchase Threshold > Federal Threshold = $150,000 MA Threshold = $35,000 Municipality = varies Formal Small Purchase (Requires price quotes from at least 3 bidders) Micro Purchase Noncompetitive Purchase (value of purchase may not exceed $3,500) Sealed Bids (IFBs) & Competitive Proposals (RFPs) (Requires public advertising)

53 Three Bids and a Buy Develop a Specification Apples, US. No. 1, five 185 count boxes per week for Sept-Dec Solicit Bids Contact vendors (by phone, fax, , in-person or via mail) and provide them with specifications (or if calling, read same information to each vendor). Bid Documentation Write down each vendor s bid and constraints; then file it. Vendor Art s Apples Olivia s Orchard Apple Crunch Inc. Price/box $40 $47 $37

54 Three Bids and a Buy Develop a Specification Apples, US. No. 1, five 185 count boxes per week for Sept-Dec Solicit Bids Contact ONLY LOCAL vendors (by phone, fax, , in-person or via mail); provide them w specifications (or if calling, read same information to each vendor). Bid Documentation Write down each vendor s bid and constraints; then file it. Vendor Art s Apples Olivia s Orchard Apple Crunch Inc. Price/box $40 $47 $37

55 Three Bids and a Buy Develop a Specification Apples, US. Fancy or No. 1, prefer five 185 count boxes per week but willing to consider other pack sizes for Sept-Dec. Solicit Bids Contact ONLY LOCAL vendors (by phone, fax, , in-person or via mail); provide them w specifications (or if calling, read same information to each vendor). Bid Documentation Write down each vendor s bid and constraints; then file it. Vendor Art s Apples Olivia s Orchard Apple Crunch Inc. Price/box $40 $47 $37

56 Exercise: Informal Procurement Read your product specifications Identify which method you will use Identify which vendor you will purchase from

57 Targeting Local Foods in a Formal Solicitation

58 Informal Procurement Methods Small Purchase Threshold > Federal Threshold = $150,000 MA Threshold = $35,000 Municipality = varies Formal Small Purchase (Requires price quotes from at least 3 bidders) Micro Purchase Noncompetitive Purchase (value of purchase may not exceed $3,500) Sealed Bids (IFBs) & Competitive Proposals (RFPs) (Requires public advertising)

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61 Invitation for Bid (IFB) Procurement by competitive sealed bidding is done by issuing an invitation for bid (IFB). Use it when: A complete, adequate, and realistic specification is available. The contract can be awarded on the basis of price.

62 Request for Proposals (RFP) Procurement by competitive proposal is done by issuing a request for proposal (RFP). Use it when: Conditions aren t appropriate for a sealed bid. Price won t necessarily be the sole basis for the award.

63 Places to Target Local Products in Formal Solicitations 1. Define farm to school program in your introduction 2. Use product specifications 3. Use additional requirements to determine vendor responsiveness 4. Apply geographic preference in the evaluation of bids

64 Contract Type Introduction/Scope General Descriptions of Goods and Services (AKA Specifications) Timelines and Procedures Technical Requirements Evaluation Criteria Sections of a Solicitation

65 SFAs May Include Desire for Local in the Introduction A school s interest in purchasing local products (and the broader context of its farm to school program) can be expressed in the introduction to a solicitation.» Remember: a school may not specify that it wants only local products.» A school may indicate its desire to serve local products and emphasize the importance of its farm to school program.

66 Introduction Language with Local Emphasis The Food Service Department (The Department) at the Cypress Creek District in Colorado works to provide the highest quality meals to its students. Cypress Creek serves about 15,400 school lunches every day and the free and reduced price rate is 73%. The Department prefers to source locally when possible, and its farm to school program works to connect K-12 schools and local food producers to improve student nutrition, provide agriculture and nutrition education opportunities, and support local and regional farmers.

67 Contract Type Introduction/Scope General Descriptions of Goods and Services (AKA Specifications) Timelines and Procedures Technical Requirements Evaluation Criteria Sections of a Solicitation

68 Product Specifications to Target a Local Item SFAs may request: A variety that is unique to the region Product delivery within 24 or 48 hours of harvest

69 Exercise: Product Specification How would you write a product specification for apples that would target local producers?

70 Example: Use Product Specifications Product Specification Red Apples, US. Fancy, Five 185 count boxes per week for September - December

71 Example: Use Product Specifications Product Specification <McIntosh or Macoun apples> US. Fancy or No. 1, Prefer five 185 count boxes per week but willing to consider other pack sizes for September December Delivered within 48 hours of harvest

72 Contract Type Introduction/Scope General Descriptions of Goods and Services (AKA Specifications) Timelines and Procedures Technical Requirements Evaluation Criteria Sections of a Solicitation

73 Additional Requirements to Determine Vendor Responsiveness SFAs will evaluate vendors for price, but also to determine that they are responsive and responsible.

74 SFAs can ask for:» Freshness (e.g. Delivered within 48 hours)» Harvest techniques» Crop diversity or farm size» Source of origin labeling» Ability to provide farm visits or class visits

75 Additional Production Standards Certified Organic No-till Pesticide Free Grass-fed Cage Free

76 RFP Example: Use Criteria to Determine Responsiveness Apple Lane Great Granny s Fred s Fuji s Contractor able to meet all specifications Product quality Delivery Packaging and Labeling Three references, past history Able to provide harvest tour to two 3 rd grade classes in October Able to provide state of origin on all products Delivered within 48 hours of harvest --

77 RFP Example: Use Criteria to Determine if Vendor is Responsible Product Specification Green apples, US. Fancy or No. 1, prefer five 185 count boxes per week but willing to consider other pack sizes for September - December Criteria to determine if vendor is responsible Apple Lane Great Granny s Fred s Fuji s Guarantees on-time delivery Provides 24-hour customer service line Able to provide 3 school district references Successful track record of working with local producers --

78 Contract Type Introduction/Scope General Descriptions of Goods and Services (AKA Specifications) Timelines and Procedures Technical Requirements Evaluation Criteria Sections of a Solicitation

79 Use Criteria to Evaluate Vendor Proposals Use those same criteria mentioned before, but assign weights to evaluate in an RFP. The amount of weight determines how important the criterion is. To evaluate responsiveness think about including:» Able to provide farm visits» State of origin or farm origin labeling» Provide products grown on a particular size farm

80 Example: Use Criteria in an RFP Product Specification Green apples, US. No. 1 or 2, prefer count boxes per week but willing to consider other pack sizes for September - December Apple Lane Great Granny s Fred s Fuji s Price = Contractor ability to meet all specifications Product quality = 15 Delivery = 10 Packaging and Labeling = Three references, past history = Able to provide farm/facility tour or classroom visits = 5 Able to provide source of origin on all products = Delivered within 48 hours of harvest = possible points

81 The Geographic Preference Option

82 Geographic Preference Background Authorized by Section 4302 of Public Law , the Food, Conservation, and Energy Act of 2008 (AKA the 2008 Farm Bill) Final Rule published in April, 2011

83 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 Washing, packaging, vacuum packing, and bagging Adding preservatives to prevent oxidation Butchering livestock or poultry Pasteurizing milk Forming ground products into patties Drying and dehydrating

84 1) Define local. How to Incorporate a Geographic Preference 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.

85 Example: 1 Point = 1 Penny Owen s Orchard Apple Lane Farms Bob s Best Price $1.97 $2.05 $2.03 Meets geographic preference? Price with preference points No Yes (10 points) No $1.97 $1.95 $2.03

86 Geo. Preference Sliding Scale Sliding scale percentage of local products Preference points 70% and more % % 5 10 preference points will be awarded to vendors able to provide over 70% local, 7 points for 50-69% and 5 points for 25-49%.

87 Example: Geo Pref. in an RFP Laurie s Legumes Paula s Pulses Gary s Grains Price = Contractor ability to meet all specifications Product quality = 15 Delivery = 10 Packaging and Labeling = Three references, past history = Able to provide farm/facility tour or classroom visits = 5 Able to provide state of origin on all products = Ability to provide sourced within the state products = possible points

88 Other Things to Consider When Writing Solicitations to Target Local Products Be flexible Don t include unnecessary requirements Consider what a vendor new to the school food market might not know» Condition upon receipt of product» Food safety needs» Size uniformity

89 Other Ways to Buy Local Products

90 Work with DoD Fresh DoD Fresh offers an opportunity to use USDA Foods entitlement dollars on fresh produce» DoD contracts with produce vendors across the country» Many vendors purchase regionally grown produce

91 FFAVORS

92 Use USDA Foods Helps districts stretch their food dollars Some might be local to you!» Be aware of what is produced in your region and order those products Processors can be local, too

93 USDA Foods by Region Midwest Apples Cherries Beef Beans Carrots Cheese Green Beans Southeast Chicken Peanut Butter Catfish Turkey Rice Flour Mid Atlantic Corn Pasta Beans Chicken Mountain Plains Beans Beef Flour Pasta Pork Southwest Rice Beans Peanut Butter Beef Mid Atlantic Corn Pasta Beans Chicken Northeast Flour Corn Green beans Western Pollack Cheese Apricots Peaches Tomatoes Pears Potatoes

94 Forward Contracts Purchasing product before harvest:» Provides producer with a guarantee» Ensures the farmer will plant and pack the supply needed Before entering a contract, be sure you understand risks both to the district and to the supplier.

95 Donated Foods Procurement regulations do not apply to donated foods Consider food safety issues and menus before accepting foods Always document receipt of goods

96 Procuring and Using School Garden Produce

97 Garden Expenses Farm to School and School Garden Expenses (SP ) Underscores the opportunities that program operators have to use funds for farm to school and school garden costs. School Garden Q&As (SP ) Clarifies that NPFSA funds can be used for some garden expenses

98 Defining local is up to you! Section Summary There are many sources of local foods- find which might work best for you (direct from farm, through distributor, DoD Fresh?) Ask for what you want, but be mindful of creating a fair and open playing field for bidders (not overly restrictive) Cite local as a preference, not a requirement

99 NFSMI Procurement Training NFSMI Guide: Procurement in the 21st Century raryfiles/pdf/ pdf Online training courses: Procurement Basics emplatedefault.aspx?qs=celeptezn Q Local Procurement: view.aspx?id=515

100 Local Procurement Guide and Webinar Series: chool/procuring-local-foods Procurement of Food Service Management Companies: ault/files/fsmcguidance-sfa.pdf FNS Resources

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102 Thank you! Danielle Fleury