PROCUREMENT REGULATIONS FOR SCHOOL NUTRITION PROGRAMS

Transcription

1 PROCUREMENT REGULATIONS FOR SCHOOL NUTRITION PROGRAMS NEW USDA MEMO FD-144, SP , SFSP , CACFP 2018 MARKET BASKET ANALYSIS WHEN PROCURING PROGRAM GOODS AND MODIFYING CONTRACTED-FOR PRICE LISTS Purchasing Advisory Council Meeting Workshop # Friday, February 23, PM Region One ESC Fort Ringgold Room

2 PROCUREMENT METHODS Method used is based on the total estimated cost of the purchase and whether it does or does not exceed the simplified acquisition threshold: Informal Formal Goal: make the most economic and efficient use of federal funds, while offering full and open competition Important: any costs incurred as a result of improper procurement processes are unallowable costs

3 INFORMAL PROCUREMENT METHODS Simplified Acquisition Threshold (Small Purchase Threshold) up to $49, The highest total cost that can be procured using the informal procurement method Note: a formal procurement method may be used when a purchase is less than the simplified acquisition threshold Important: the most restrictive federal, state or local simplified acquisition threshold apply for all purchases

4 INFORMAL PROCUREMENT METHOD DECISION CHART

5 MICRO-PURCHASE METHOD Definition: a single purchase or transaction that has a total aggregate cost that is equal to or less than $3,500 Aggregate: total cost for a single purchase or transaction Total aggregate cost may consist of one product and/or service or multiple products and/or services Separate aggregate purchases may occur weekly, monthly or annually

6 MICRO-PURCHASE METHOD Intent: minimize the burden for purchases of very small amounts Note: when the same products and/or services are purchased frequently (Routine Purchasing), must maintain documentation that demonstrates why this is the most suitable procurement method and why another method is not suitable or reasonable Important: any costs incurred as a result of intentionally breaking larger purchases into smaller amounts to qualify as a micropurchase are unallowable

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8 MICRO-PURCHASE AGGREGATE EXAMPLE

9 MICRO-PURCHASE AGGREGATE EXAMPLE

10 MICRO-PURCHASE AGGREGATE EXAMPLE

11 MICRO-PURCHASE METHOD REQUIRED PROVISIONS Buy American Method to document the cost of the products and/or services are reasonable Equitable Purchasing Purchases distributed among all qualified suppliers Cannot make all of its micro-purchases from one qualified supplier Written procedures must include a process to ensure equitable purchasing Exception: rural areas justification must be documented

12 MICRO-PURCHASE METHOD TDA Sample Form: Micro-Purchase Log

13 SMALL PURCHASE METHOD Definition: an aggregate total for a single purchase or total purchase that is equal to or less than $49, Aggregate Total amount of the cost for a single purchase or the total cost for grouped purchases (categories) made over an extended period of time Total cost when all invoices are totaled Important: any costs incurred as a result of intentionally breaking larger purchases into smaller amounts to qualify as a small purchase are unallowable

14 SMALL PURCHASE AGGREGATE EXAMPLE

15 SMALL PURCHASE METHOD REQUIRED PROVISIONS Buy American Competitive Purchasing/Solicitation: Must provide and document specifications and technical requirements provided to all contractors Must obtain and document price quotes from at least 3 responsible and responsive contractors All possible contractors must be given the same information Contract

16 SMALL PURCHASE METHOD REQUIRED PROVISIONS Cost Analysis Written procurement procedures must include a process for cost comparison Price must be the primary consideration Routine Purchasing: when the same products and/or services are purchased frequently, must maintain documentation that demonstrates why this is the most suitable procurement method and why another method is not suitable or reasonable

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18 FORMAL PROCUREMENT METHODS Required when the total estimated cost products and/or services exceeds the Simplified Acquisition Threshold (Small Purchase Threshold) equal to or greater than $50,000 More rigorous process Promotes full and open competition Results in lower prices

19 TYPES FORMAL PROCUREMENT METHODS Invitation for Sealed Bids (IFB) Request for Competitive Proposals (RFP)

20 FORMAL PROCUREMENT METHOD - IFB Competitive procurement method for a fixed price contract Sealed bids are submitted Ideal when offers will only differ in price for lump sum or unit pricing Most effective when you have clear specifications and/or technical requirements Awarded in writing to the most responsive and responsible offeror whose price is most advantageous to the program

21 FORMAL PURCHASE METHOD REQUIRED PROVISIONS - IFB Buy American Aggregate: total amount of the cost for a single contract (or single renewed contract) Total cost is typically broken into multiple invoices paid when specified expectations are met Award is made in writing to the lowest responsible and responsive offeror Competitive Purchasing: Offers must be solicited from an adequate number of know suppliers Must have 2 or more responsible offerors

22 FORMAL PURCHASE METHOD REQUIRED PROVISIONS - IFB Firm fixed-price contract award Cost Analysis Written procurement procedures must include a process for a formal cost analysis or price comparison Credits, Discounts, and Rebates: in a firm fixed-price contract, the winning contractor is not required to return credits, discounts, and rebates, as the contractor factors them into the fixed price for the contract period USDA Food Values: the winning contractor must ensure the value of the USDA Foods is returned to the SNP

23 FORMAL PURCHASE METHOD REQUIRED PROVISIONS - IFB Opening Sealed Bids Must be opened publicly so contractors and other interested parties may attend Must provide a description of where and when the sealed bids will be opened Best Practice: at least 2 employees present during opening directly involved in the procurement process If not able to quickly and clearly determine which bid is most responsible and responsive, option to announce which offers meet the criteria to be considered for award at the bid opening and announce the actual award at a later date If this option is used, the process must be included and clearly described in the IFB solicitation

24 FORMAL PURCHASE METHOD REQUIRED PROVISIONS - IFB Evaluation of the Offers Must use the rubric or scoring tool provided in the solicitation to determine if the offeror is both responsible and responsive Any or all offers may be rejected if there is sound documented reason Price must be the primary consideration

25 FORMAL PURCHASE METHOD REQUIRED PROVISIONS - IFB Public Advertising Must provide sufficient response time to the bid opening date to allow sufficient time for potential offerors to respond Must ensure there is full and open competition Important: advertising in a regional newspaper may not be sufficient notification if the circulation of the paper is limited geographically Securing Sealed Bids: Each bid should be date stamped as it arrives and stored in a secure place until the time of the bid opening

26 FORMAL PURCHASE METHOD REQUIRED PROVISIONS - IFB Solicitation must include: specifications and/or technical requirements for the products and/or services to be purchased; bonding requirements (if applicable); method for submitting an offer; method and criteria for evaluating the bid; process for assigned staff to respond to and resolve all bid protests; contractual statements required by law; method for submitting a protest for the bid award Important: must maintain documentation that demonstrates actions to release the IFB to the public and all communication that occurs after the IFB release Note: must have a method to share Q&As with all potential offerors

27 FORMAL PROCUREMENT METHOD - RFP Competitive procurement method under a fixed price (fee) in a cost reimbursable or firm fixed-price contract where offerors submit a detailed offer Includes specifications and/or technical requirements of products(s) and/or service(s) Ideal when a sealed bid method is not appropriate Contract awarded to most responsible and responsive offeror whose offer is most advantageous to the program price and other factors considered

28 FORMAL PURCHASE METHOD REQUIRED PROVISIONS - RFP Buy American Aggregate: total amount of the cost for a single contract (or single renewed contract) Total cost is typically broken into multiple invoices paid when specified expectations are met Award is made in writing to the most responsible and responsive offeror Competitive Purchasing: Offers must be solicited from an adequate number of know suppliers Must have 2 or more responsible offerors

29 FORMAL PURCHASE METHOD REQUIRED PROVISIONS - RFP Firm fixed-price contract or a cost reimbursable contract Cost Analysis Written procurement procedures must include a process for a formal cost analysis or price comparison Credits, Discounts, and Rebates: in a firm fixed-price contract, the winning contractor is not required to return credits, discounts, and rebates, as the contractor factors them into the fixed price for the contract period. In a cost reimbursable contract, the contractor is required to return credits, discounts, rebates must be addressed to the SNP USDA Food Values: in a firm fixed-price contract, the winning contractor must ensure the value of the USDA Foods is returned to the SNP

30 FORMAL PURCHASE METHOD REQUIRED PROVISIONS - RFP Evaluation of the Offers Must use the rubric or scoring tool provided in the solicitation to determine if the offeror is both responsible and responsive Any or all offers may be rejected if there is sound documented reason Price must be the primary consideration Public Advertising Must provide sufficient response time to the RFP opening date to allow sufficient time for potential offerors to respond Must ensure there is full and open competition Important: advertising in a regional newspaper may not be sufficient notification if the circulation of the paper is limited geographically

31 FORMAL PURCHASE METHOD REQUIRED PROVISIONS - RFP Solicitation must include: specifications and/or technical requirements for the products and/or services to be purchased; bonding requirements (if applicable); method for submitting an offer; method and criteria for evaluating the bid; process for assigned staff to respond to and resolve all bid protests; contractual statements required by law; method for submitting a protest for the bid award Important: must maintain documentation that demonstrates actions to release the RFP to the public and all communication that occurs after the RFP release Note: must have a method to share Q&As with all potential offerors

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33 NONCOMPETITIVE PROCUREMENT METHOD Occurs when only one offer is received Is an appropriate method of procurement when one or more of the following apply: Inadequate competition Public emergency or unexpected emergency situation Sole source TDA authorization in special situations

34 NONCOMPETITIVE PROCUREMENT METHOD Must retain all related documentation onsite to demonstrate compliance Important: if a CE enters into a noncompetitive contract without TDA approval, the contract has been improperly procured. All costs associated with an improperly procured contract are unallowable, including any ongoing and maintenance costs, from the nonprofit food service account

35 NONCOMPETITIVE PROCUREMENT METHOD Inadequate Competition Competition is deemed inadequate after actively and appropriately soliciting offers from a number of sources that meet the solicitation specifications and technical requirements When only one responsive and responsible offer is received, you must take the following action: Determine if action was taken to promote competition: Were the specifications and/or technical requirements too restrictive? Was enough time provided for offerors to submit a response? Enough time provided for supplier to meet delivery schedule of products and/or services? Did the public advertising strategy target a large enough circulation to ensure notice was provided to an adequate number of suppliers? Retain documentation that demonstrates full and open competition was promoted

36 NONCOMPETITIVE PROCUREMENT METHOD Public Emergency or Unexpected Emergency Situation Will not permit a delay resulting from the traditional time required for a competitive solicitation for the product and/or service Must submit a request to TDA in writing ( , fax, paper), and must include: Description of emergency situation Products and/or services to be procured Supplier, distributor, or manufacturer from whom the product and/or services will be procured Period of time the noncompetitive procurement method for the emergency In cases of extreme emergency, call TDA directly to alert TDA of the situation, in addition to written request TDA will provide written notification of approval or disapproval Must retain documentation

37 NONCOMPETITIVE PROCUREMENT METHOD Sole Source There is only one possible source to procure the product and/or service Must verify the product and/or service can only be procured from a single source: Actively solicit offers from other suppliers, distributors and/or manufacturers If the product and/or services is available from other sources, but one source offers a feature(s) that other sources do not offer, the special feature cannot become the only factor that defines a product and/or service as sole source unless there is documentation to support why the feature is required, not just preferred Cannot accept a statement from the supplier, distributor or manufacturer as verification that the product and/or service is only available from a single source Must retain documentation that demonstrate efforts to solicit offers for the product and/or service from other suppliers, distributors, or manufacturers

38 NONCOMPETITIVE PROCUREMENT METHOD Approval to Use Sole Source Procurement Method Must submit a request in writing (paper, fax, ) to TDA which includes the following: Description of the review of the solicitation, advertising, and other actions to determine if the contract was competitively solicited Description of the actions to ensure the supplier, distributor, or manufacturer is sole source Copies of the solicitation, advertising, and other relevant documentation that demonstrates the supplier, distributor, or manufacturer is sole source TDA will provide written notification of approval or disapproval Must retain documentation

39 NONCOMPETITIVE PROCUREMENT METHOD Brand Name Sole Source Purchase When there is a compelling need to purchase a specific brand product and/or service, must have documentation that demonstrates other available brands are not compatible with: Current equipment Replacement part inventory, and Maintenance staff s expertise Must determine if there is more than one supplier for the brand of equipment or service If there are multiple suppliers, must follow the normal procurement process and ensure full and open competition

40 NONCOMPETITIVE PROCUREMENT METHOD TDA Authorization in Special Situations TDA authorizes the use of a noncompetitive procurement method TDA will provide notification when this type of noncompetitive procurement method is appropriate Rare

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42 CONTRACT PROVISIONS Buy American: requires schools to purchase domestically grown and processed food to the maximum extent practicable A minimum of 51% of the final processed food product must consist of domestic agricultural commodities Domestic includes U.S. Territories: Guam, American Samoa, Virgin Islands, Puerto Rico, and North Marian Islands Applies to all purchases made with SNP Funds Local Preference: may give bonus points to local producers when soliciting and awarding unprocessed locally grown or raised agriculture products, as long as full and open competition is not restricted Written procurement procedures must include method(s) of using local preference

43 CONTRACT PROVISIONS When federal funds are used specific regulatory and legislative provisions must be included in all contracts: BYRD, Anti-Lobbying Civil Rights/Discrimination Clean Air and Water Act and Federal Water Pollution Control Act Contract Work Hours and Safety Standards Act Copeland Anti-Kickback Act Davis-Bacon Act Energy Policy and Conservation Act Equal Employment Opportunity Health and Safety Certifications, Licensing, or Regulations Rights to Inventions (Patent Rights, Copyright and Rights) Solid Waste Disposal Act Small and Minority Firms, Women s Business Enterprise, and Labor Surplus Area Firms

44 SOLICITATION Prepared to describe the products and/or services you plan to procure Must clearly define the items or services Allows offerors to properly respond to the solicitation Intent: all offerors have equal opportunity to compete for the award of the contract

45 SOLICITATION INFORMAL/SMALL PURCHASES Written procurement procedures must include the a clear description/process for obtaining and documenting solicitations for small purchases Minimum requirements: Keep documentation for all potential contractors contacted or attempted to contact Specifications and/or technical requirements provided to the potential contractors Offers or pricing received Method for determining award Receipt/notification of award

46 SOLICITATION INFORMAL/SMALL PURCHASES TDA Sample Form: Informal Small Purchase Log

47 SOLICITATION FORMAL PURCHASES/IFB OR RFP Written procurement procedures must include the a clear description/process for obtaining and documenting solicitations for formal purchases (IFB or RFP) Documentation must describe: Specifications and/or technical requirements for the products and/or services Procurement method Type of contract to be awarded: fixed price or cost reimbursable Evaluation criteria and method of evaluating responses Process and schedule for submitting an offer Form of contract with standard terms (terms and conditions) Opening of offers: description of when and where sealed bids will be opened

48 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must also be addressed in a solicitation document for an IFB or RFP, and if/when applicable to a small purchase: Cost-Reimbursable Contract: must include or address the following concerns: Allowable costs (materials + direct labor hours) as defined in applicable regulation Cost plus a percentage of cost is unallowable Ceiling price that the contractor exceeds at its own risk Method the contract will use to identify and apply rebates, credits, and discounts and any USDA Foods values used by the contractor which at a minimum must occur yearly May include a right-to-audit provision in the solicitation (and contract) to ensure routine access to information necessary for verification

49 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Firm Fixed-price Contract: awarded to the lowest offeror that meets all the material terms and conditions (is responsible and responsive), and must include the following: Specified or stated price that is fixed for the duration of the contract Include clear definition of packaging requirements, if applicable Maximum incentive for the contractor to control costs and perform with greatest efficiency Least administrative burden on contracting parties May include an audit provision in the solicitation (and contract) to ensure routine access to information necessary to verify receipt of accurate crediting for USDA Foods Credits, discounts, and rebates are included in the fixed-price and do not need to be tracked

50 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Specifications and/or Technical Requirements: should give the offeror all the information needed to submit a competitive bid, applies to both products and/or services Must not be overly restrictive to limit competition Must be written in a way to determine if the offeror is responsible and responsive, or not

51 SOLICITATION FORMAL PURCHASES/IFB OR RFP Generic Terminology: When writing a specification or technical requirement for a product without specifying brand name, use a generic name or standard of identify that is usually listed under the trade name A brief description of the product may also be included Example: generic names of breakfast cereals: Toasted oat cereal, donut-shaped Puffed wheat cereal, sugarcoated Cornflakes, sugarcoated Shredded wheat biscuits, small, sugarcoated

52 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Specifications and/or Technical Requirements for Products should include, but are not limited to: Applicable nutrition standards Delivery expectations Basic features as well as size/weight/grade/quality specifications Packaging requirements Quantity Warranty

53 SOLICITATION FORMAL PURCHASES/IFB OR RFP Grade Specifications and/or Technical Requirements: informs the offeror that the products must meet or exceed the USDA grading requirements USDA, Agricultural Marketing Service (AMS) has developed the Understanding Food Qualities Labels tip sheet to assist consumers in understanding the grade specifications and/or technical requirements When the grade specifications and/or technical requirements are omitted, the offer may be made using undesirable products If a potential contractor offers an item that is only supplier grade, the offer can be identified nonresponsive or overly responsive bid Minimum Drained Weight: necessary to specify in specifications and/or technical requirements for canned fruits and vegetables Ensures the minimum acceptable amount of product per can

54 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Specifications and/or Technical Requirements for Services should include, but are not limited to: Clear explanation of the scope of services Description of duties to be performed Certification and/or licensing requirements Equipment provided by school/program and equipment provided by contractor Hours of work Performance expectations Required outcomes Warranty

55 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Use of Brand Names: Brand name or equal statement may be added to the description of a product to demonstrate the type of product you are attempting to procure Cannot stipulate the only product that meets specifications and technical requirements is a brand name product, unless it meets the Name Brand Sole Source Noncompetitive Procurement criteria Approved Brands: May specify a list of approved brands as part of a product description in addition to the specifications and technical requirements to demonstrate what types of products are acceptable Must include the phrase or equal after each approved brand and indicate that any product that meets the same specification and technical requirement is acceptable

56 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Bread Specifications If a bread item has a standard of identity, it is still necessary to specify the whole grain profile. The U.S. Food and Drug Administration (FDA) has standards of identity for non-enriched bread products as well as the whole grain-rich and enriched products.

57 SOLICITATION FORMAL PURCHASES/IFB OR RFP Procuring Fresh Fruit and Vegetables: long-term contracts for fresh fruit and vegetables are not always available Written procurement procedures may establish a purchasing schedule that allows for the most cost effective pricing A fresh fruit and vegetable purchasing schedule includes, but is not limited to, frequency of procurements and what products to purchase in each season Note: a schedule of purchases helps obtain the competitive pricing, and assists with menu planning Each time fresh fruit and vegetables are procured, it must be done correctly May use any type of procurement method or contract allowed for SNPs

58 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Samples for Taste Testing: may include as a specification or technical requirement Ensure the description of the specifications and technical requirements for taste testing clearly communicate the expectations Consider if any product and/or services provided by a potential contractor will become an incentive to award a contract Cost of samples are included in the offerors pricing, not actually free

59 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Shared Purchasing: combines the products and/or services for other school functions with an SNP procurement, allowed when the following conditions apply: 1. If the additional items are included in the original solicitation specifications and/or technical requirements, including quantity, and 2. The SNP recovers the full cost for the products and/or services Recovered costs include, but not limited to: Actual cost of the product Handling Transportation Labor May include a proportional share of the cost, if applicable

60 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Contract Award Type: must specify the possible ways the contract may be awarded One award to one offeror Multiple awards to different offerors By category By line item Must consider the following: Will awarding one contract for the total purchase result in a cost savings? Will awarding one contract for the total purchase encourage more potential contractors to submit offers? Will awarding one contract for the total purchase limit competition because fewer potential contractors are able to respond to the quantity or variety in the solicitation? What are the facility and staffing requirements for the contract awarded by total purchase or by multiple contracts?

61 METHODS FOR ISSUING PROCUREMENT SOLICITATIONS Multiple methods Goal: obtain the most competitive pricing for an individual product and/or service or list of products and/or services Note: a vendor may have more than one responsive product that meets the specifications and/or technical requirements in the solicitation Evaluate which responsive product to accept and award the full quantity/volume for that product as described in the solicitation

62 METHODS FOR ISSUING PROCUREMENT SOLICITATIONS One Solicitation with a List of Items: solicitation describes each item on a list by quantity, specifications and technical requirements The most responsible and responsive vendor is awarded the contract for all items on the list One Solicitation with Groups of Items: solicitation describes the quantity, specifications and technical requirements for each item within a group and provides explanation that the contract for each group of items may be awarded to different vendors Vendors have the option to offer a price option on one, some, or all groups of items The most responsible and responsive vendor for each group of items is awarded a contract

63 METHODS FOR ISSUING PROCUREMENT SOLICITATIONS Multiple Solicitations for One Item for One List: each solicitation describes the quantity, specifications, and technical requirements fore an item or list of items The most responsible and responsive vendor for each solicitation is awarded the contract A vendor may be awarded multiple contracts or a single contract One Solicitation for One Item with a Split Award by Percentage of Total Quantity: the solicitation describes the specifications and/or technical requirements for the item and provides an explanation that there will be multiple awards with each awardee given a specific percentage of the total quantity for the item Vendor has the option to offer a price option for one or more of the percentages of the total quantity The most responsible and responsive vendor for each percentage for the item is awarded the contract

64 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Evaluation of Offers: must include written criteria for evaluation the offer and the value for all criteria Evaluation Criteria for Bid Bonus Points: must include an explanation when additional value or weight (bonus points or percentages) is assigned for any criteria, such as local preference May not use bonus points to restrict full and open competition Local Preference: must clearly outline the value or weight of any local preference criteria and the method which the criteria will be evaluated, but cannot exclude a potential contractor that is not local from consideration

65 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Qualitative Elements: products and/or services difficult to describe in objective, concrete terms Provide the following to ensure offeror has sufficient information to submit a responsive bid: Outcomes and/or expectations Examples and/or scenarios Evaluation criteria Example: Point of service (POS) systems used to record meal type and prevent overt identification

66 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Significant Dates: must provide detailed information on dates for the contract which includes, but not limited to: Start/end dates Delivery dates Major events Duration of Contract: must define the length of the contract and expected date of contract completion Duration for all SNP contracts must not be longer than one year, with the option to renew up to 3 additional one-year contract periods (see TDA ARM 17.99) Must be re-bid if there is a material change

67 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Adjustment or Escalation Clause: must specify the name and frequency of the adjustment, if the fixed price is linked to an independent wholesale index (example: diary RFP linked to USDA- AMS dairy monthly Federal Market Order index) Bonding Requirement: must specify the applicable bonding requirement, if any Recourse: must include an explanation of remedies if the contractor cannot or does not perform as required

68 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Credits, Discounts, and Rebates: USDA regulation requires that contractors provide sufficient information to determine if all rebates, credits, and discounts have been applied correctly in cost reimbursable contracts Must include a statement of how and when this will be done May write an audit provision or a penalties clause if the contractor does not provide the required information Firm fixed-price solicitations do not need to include credits, discounts, and rebates

69 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Delivery: must include expectations for when and where products and/or services will be delivered If deliveries are to be made to schools, a list of schools and their addresses should be included Allows offeror to calculate transportation costs Drop Delivery: must include and clearly state if drop shipments are accepted

70 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Equipment: must provide adequate information if the solicitation includes equipment, such as: Utility and space requirements Quality and features required Installation requirements Indicate your intent to retain the property and continue making payments in accordance with an approved amortization schedule or return the property Other factors that may impact purchasing of equipment Estimating quantities: use forecasting to determine the quantities of products and/or services to specify in the solicitation

71 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Contract Documentation for Food Products: Must include a statement about the required documentation that demonstrates food products, including commercially prepared products, meet the meal pattern or competitive food standards Be consistent in the information requested of potential contractors Any processed food product that does not have a yield listed in the Food Buying Guide for School Nutrition Programs must have documentation to identify the contribution of the food product toward meeting the meal pattern requirements or the nutritional values required for the competitive food standards: 1. CN label; 2. Signed and dated Product Formulation Statement (PFS); or 3. Depending on the product type and intended use, nutrition fact labels

72 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Health and Safety: must identify any expectations related to health and safety. Contractors may be required to adhere to local, state, or federal licensing or standards Invoicing: method and requirements for invoicing must be included. USDA regulation requires contractors provide sufficient information to identify allowable and unallowable costs Record Retention: must include description of all applicable records retention requirements for the awarded contractor

73 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Notification: must contain information about submitting an offer, including but not limited to: Date bidding opens and closes Location Method and criteria for evaluating the offer Information or announcements about winning and losing offerors Procedure to protest an offer including contact information for the person handling the pretests and timeline for submission Necessary attachments, including certifications, assurances, and sample contract terms and condition, if any Note: may also use the Texas Comptroller of Public Accounts Electronic State Business Daily to (ESBD) to provide additional notification of invitations for IFBs and RFPs Promotes full and open competition No charge

74 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Questions from Potential Contractors: must include description, of the location and method used to share answers to questions or clarifications from potential contracts ask about the solicitation Information shared with one potential contractor must be shared with all potential contractors Example: post Q&A on public webpage Protests: must contain information about the process for submitting a protest of the solicitation, cancellation of a solicitation or other request, contract award or proposed contract award, and termination of the contract

75 SOLICITATION FORMAL PURCHASES/IFB OR RFP The following must be addressed in a solicitation document, continued Managing the Contract: must describe contract expectations, including, but not limited to: Information required on invoicing Delivery procedures Complaint procedures Payment procedures and process Monitoring the use of adjustment or escalation clause to ensure the cost index is applied accurately, increase or decrease, as specified in the contract Process for submission of bid protests Reporting, audit, and penalty requirements for credits, discounts, and rebates

76 SOLICITATION FORMAL PURCHASES/IFB OR RFP Material Change: changes to contract terms that are materially inconsistent with the original solicitation for the contract Undermines full and open competition by denying all possible contractors the opportunity to compete under the same terms and conditions Must rebid the contract when a change in purchasing products and/or services is inconsistent with the underlying solicitation on which the contract was based Important: any costs arising from improper procurement are unallowable to the school nutrition program

77 SOLICITATION FORMAL PURCHASES/IFB OR RFP Material Change, continued Making changes to the contract terms includes the purchase of products and/or services not included in the contract or within the terms of a contract renewal Important: a solicitation that is written to be an open-ended procurement of additional products and/or services is likely to be an inappropriate procurement When procurement is not done correctly with full and open competition, the cost of the contract and legal defense of the contract are unallowable expenses to the school nutrition program

78 SOLICITATION FORMAL PURCHASES/IFB OR RFP Material change most often occurs in one of two situations: 1. The solicitation does not mirror the contract 2. A change is made to a contract that alters the terms and conditions of the contract substantially enough that other potential contractors who responded to the solicitation may have bid differently and more competitively if they had known about the altered terms and conditions

79 SOLICITATION FORMAL PURCHASES/IFB OR RFP Forecasting: an essential tool to make sure that a material change does not occur. Consider adding the anticipated changes to the solicitation and contract for enrollment growth or a reconfiguration of site attendance zones Note: must still evaluate the impact of growth or reconfiguration to determine if a material change has occurred Important: any increase in the purchase of products and/or services not reasonable may be a material change and may require a rebid of the contract

80 SOLICITATION FORMAL PURCHASES/IFB OR RFP Anticipated Change: expected (reasonable) changes stipulated in the solicitation All potential offerors are able to include that information in their offer Promotes full and open competition and unlikely to be a material change Flexibility for Growth: may include the possibility for an increased amount of products and/or services as long as the increase is reasonable and is clearly outlined in the solicitation Commonly, this type of option is used for an anticipated growth in student population and participation To be reasonable, an increase based on student enrollment should correlate to the normal increase in enrollment If the increase included in the solicitation is not reasonable, it is not an allowable flexibility

81 SOLICITATION FORMAL PURCHASES/IFB OR RFP Material Change Determination: must consider the following issues when determining if there has been a material change Increase or Decrease to the Cost of the Contract If there was an increase or decrease to the cost of the contract, would the increase or decrease in cost have caused offerors to quote the cost of products and/or services differently if the increase or decrease had existed at the time of the solicitation? If yes, it is a material change, must rebid the contract. Increase or Decrease in the Products and/or Services Would the prospective change materially affect the scope of services, types, and/or volume of the products and/or services in both the solicitation and resulting contract? If yes, it is a material change, must rebid the contract New Products and/or Services Are there new products and/or services added to an existing contract? If yes, it is a material change, must rebid the contract If there is a material change to the contract and it is not rebid, any contractor that responded to the solicitation and did not win may file a protest to the contract award

82 CONTRACT NEGOTIATION Contract Negotiation: may conduct negotiations with the contractors of the top ranked offers(s) to ask for clarification about the responsive features May ask each contractor to further explain how it will address one of the specifications and/or technical requirements or to further describe a process or product included in the offer Not intended to give one contractor an advantage over another Intended to clarify understanding of what each contractor is offering. At the end of the negotiation, award the contract to the most responsible and responsive contractor After all offerors have provided clarification, may also ask all or the top offerors to resubmit a best price and final offer (BAFO)

83 OTHER EVALUATION AND SCORING METHODS FOR CONTRACT AWARD Alternatives to the preferred methods of evaluating and awarding a contract based on the price of all goods, either as an aggregate (bottom line or total cost) or by line item Method must be specified in the solicitation and contract documents Must also comply with the requirements of 2 CFR Part 200, which includes procurement standards required for all Federal awards to non- Federal entities

84 SOLICITATION FORMAL PURCHASES/IFB OR RFP Prequalified Lists: must ensure all prequalified lists of persons, firms, or products used in acquiring goods and services are: Current Include enough qualified sources to ensure maximum and full and open competition Efficient procurement process Must not preclude potential offerors from qualifying for the prequalification list during the solicitation period Important: must never unduly restrict or eliminate full and open competition

85 SOLICITATION FORMAL PURCHASES/IFB OR RFP Purchase Catalog: allowable if the solicitation includes specifications and technical requirements that indicate what will be purchased and quantity to be purchased If the solicitation is not done correctly, the purchases may result in unallowable costs

86 SOLICITATION FORMAL PURCHASES/IFB OR RFP Market Basket: used to encourage the submission of varied pricing options, solicitation must include: Finite list of products and/or services on the market basket list Each product and/or service listed must have: 1. Description with the quantity to be purchased 2. Specifications and/or technical requirements for each product and/or service, and 3. Description of how each product and/or service will be awarded on the contract

87 SOLICITATION FORMAL PURCHASES/IFB OR RFP USDA Memo Market Basket Analysis when Procuring Program Goods and Modifying Contracted-for Products Lists

88 SOLICITATION FORMAL PURCHASES/IFB OR RFP Market Basket USDA Guidance: evaluates the lowest price vendor using a sample of goods Sample of goods must represent a specific estimate of the total contract value Specific estimate of the total contract value must be included in the solicitation and contract documents Recommend a sample of 75% or more of the aggregate estimated contract value Can include USDA Foods processed end products using net-off-invoice (NOI) Must obtain prices for remaining listed goods (not used in evaluation) prior to final award

89 SOLICITATION FORMAL PURCHASES/IFB OR RFP Market Basket USDA Guidance, continued Allows for the addition of goods after final contract award when: Written procurement procedures allows for it Included in the procurement solicitation, and contract documents The total value of all additional goods does not exceed the amount specified in the solicitation and contract documents Recommend limiting additional costs to no more than 5-10% of the estimated contract value An occasional approved substitute by a contract is not considered an added product

90 SOLICITATION FORMAL PURCHASES/IFB OR RFP Market Basket USDA Guidance, continued Added goods must included in a contract amendment Must maintain a list and cost of all additional items procured to ensure it is within the limit If limit is exceeded, must re-bid The renewal (extension) year establishes a new contract baseline value Renewal/extension option must be specified in solicitation and contract documents terms of contract Must maintain procurement records

91 SOLICITATION FORMAL PURCHASES/IFB OR RFP Market Basket USDA Guidance, continued Not an appropriate method for Service contracts Fee-for-Service USDA Foods processed end products Forecasting determines the type and quantity of goods needed Obtain velocity reports from vendors Include language in the bid solicitation and contract that requires vendors to supply velocity reports as requested Forecasted amount must be within the specified range Recommend 5-10%

92 SOLICITATION FORMAL PURCHASES/IFB OR RFP Market Basket USDA Guidance - Sample language: The Market Basket Analysis sample is established to represent [75] % of the total estimated value of the contract to be awarded. The most recent velocity/sales report from our current supplier(s) was used to project the balance of the year and adjusted for any estimated change in menu and participation for the following year. As a result, the list of [100] goods to be purchased under the solicitation includes the top [60] goods purchased by dollar volume representing the [75] % threshold. Prices for the remaining [40] goods listed in the solicitation should also be included, though they will not be a part of the market basket analysis.

93 PUBLIC ADVERTISING FOR IFB/RFP Formal Procurement Solicitations must be publicly advertised with sufficient response time prior to the bid opening date to allow sufficient time for potential offerors to respond TEC (g): Notice of the time by when and place where the bids or proposals, or the responses to a request for qualifications, will be received and opened shall be published in the county in which the district's central administrative office is located, once a week for at least two weeks before the deadline for receiving bids, proposals, or responses to a request for qualifications. If there is not a newspaper in that county, the advertising shall be published in a newspaper in the county nearest the county seat of the county in which the district's central administrative office is located. In a two-step procurement process, the time and place where the second-step bids, proposals, or responses will be received are not required to be published separately. Note: more time maybe needed for complicated or lengthy bids

94 PUBLIC ADVERTISING FOR IFB/RFP Must ensure it supports and promotes full and open competition Expected to ensure the solicitation notice has the Highest Possible Circulation Publicizing in a regional newspaper may not be sufficient notification if it is geographically limited Note: consider using online publications to reach wider audiences Texas Comptroller of Public Accounts Electronic State Business Daily (ESBD) All governmental entities may post invitations for IFBs and RFPs to this site Widely available to various types of suppliers across the State No cost

95 PUBLIC ADVERTISING FOR IFB/RFP Must contain the following information: Address and phone # for location where any potential offeror may obtain the solicitation Bonding requirements, if applicable Date, time, and location of the opening of offerors and awarding of contracts Deadline and method for submission General category, specification, or technical requirement for the item to be bid Note: may detail specifications and/or technical requirements on a website or in a separate document that is provided instead of including in the public advertisement, however must include the location and method to access the detailed specifications and/or technical requirements in the Ad Indication of how the contract will be awarded Method and criteria for the evaluation of offerors Note: may include a summary list of the method and criteria for evaluation instead of the full rubric, however must include the location and method to access the detailed specifications and/or technical requirements in the Ad Method of payment Name of the CE/School

96 PROCUREMENT Sources: TDA Administrative ARM Section 17: Procurement ( 2 CFR Procurement Standards ( USDA Memo: Market Basket Analysis when Procuring Program Goods and Modifying Contracted-For Product Lists ( USDA Webinar: Market Basket Analysis When Procuring Program Goods and Modifying Contracted for Product Lists