This document outlines the process of competitive procurement for school food authorities (SFAs) to purchase goods from farmers. It describes procurement as a process of purchasing goods or services according to specifications in order to get the most competitive price. For small purchases under $150,000, it recommends an informal "three bids and a buy" process where SFAs contact at least three producers to obtain price quotes and award the contract to the most responsive bidder with the lowest price. The document provides steps for planning bids, obtaining specifications and documentation, acquiring price quotes, and awarding and monitoring contracts to ensure proper procurement.

1. 1
“Three Bids and a Buy”
Connecting SFAs and Farmers
Through Competitive Procurement
Presented by
Randy Jones
Department of Public Instruction

2. 2
What is Procurement?
 “Procurement” is a “process” of purchasing of goods or services.
 School “needs” will help identify requirements used to draft
“specifications”.
 Once you have your specifications are drafted
 you will use them to “Solicit Pricing” from producers
 The most “Competitive Price” (i.e. Lowest price or cost) that meets
those specifications is awarded the contract
 “Award the Contract” and “Manage the Contract”
 Follow applicable “Federal and State regulations”
 Documentation your “Procurement” and retain your “Records”

3. 3
What is Competition?
 "Competition" is the foundation for all properly conducted
procurements, regardless of dollar value.
 Competition is not a method of procurement, but a condition of the
environment in which the procurement occurs.
 “Competitive Procurement” - means that all procurement
transactions, 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.

4. 4
Regulations
Schools must comply with:
7 CFR Part 3016 and Part 3019;
USDA Program regulations (7 CFR Part 210, Part 215,
and Part 220), guidance, and instructions;
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 and State requirements.

5. 5
Small Purchase Threshold
 The line that separates small purchases from big
purchases is called the “small purchase
threshold”.
 Small purchase threshold = $150,000.
 Purchases costing less than the small purchase
threshold is called, “Informal Procurement”
 Purchases costing more than or equal to the small
purchase threshold is called, “Formal
Procurement”

6. 6
Procurement Methods
 Small Purchase – (Informal)
(a.k.a. 3 bids and a buy )
 Invitation for Bid (IFB) – (Formal)
 Request for Proposal (RFP) – (Formal)
 Sole Source
 Emergency Procurement
Request for Information (RFI)

7. 7
Geographic Preference
 The Farm Bill amended the National School Lunch Act
to allow schools to apply a geographic preference when
procuring unprocessed locally grown or locally raised
agricultural products.
 Unprocessed products mean those agricultural products
that retain their “Inherent Character”.
 This is used for giving preference to but not excluding
producers
 This is useful when procuring for the Farm to School
Program.

8. 8
When to use Geographic Preference
 You are not required to use “Geographic
Preference”
 Is your purchase over $150,000?
 Do you have enough competition to purchase
locally?
 Do you have producers and suppliers outside
what you consider “local” contacting you to sell
you unprocessed products?

9. 9
Informal Procurement in Seven Steps!
“Three Bids and a Buy”

10. 10
Review of Informal Procurement
 Estimated value of the purchase is less than
$150,000
 Schools have a lot more flexibility in how they
solicit bids from producers.
No public notice requirement
No closed bid requirement
No public opening requirement
 Informal bidding is always based on price!
 Requires less time to prepare and complete the
procurement process

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Step One
Pre-Bid Instructions
 Notify prospective producers of your plan to purchase
products
 This allow producers to know that you will be contacting
them in the near future to get pricing
 Schools will want to work with enough producers to
ensure that when they getting pricing, they can get pricing
from at least three producers.
 Build quality business relationships with producers

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Steps Two, Three and Four
Planning, Specifications, and Documentation
 Step 2 - Planning your bid:
 Write down the product specifications in a purchase log
 Step 3 - Starting the bid process:
 Contact producers (by phone, email, fax, in person, or mail) and
 provide them with written product specifications or
 if calling, read off the written specification from your purchase
log.
 Step 4 - Document producer responses:
 Name, Contact Method, Who provided the price quote, The
price quoted, Date price quote was obtained and Duration of
price quote

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Steps Five and Six
Price Quotes and Award
Step 5 - Obtain price quotes from at least three
producers (i.e. “three bids and a buy”)
Step 6 - Award the contract/purchase to the most
responsive and responsible producer with the
lowest price.
What is a responsive and responsible producer?

14. 14
Step Seven
Monitor invoices and products to insure that bid prices, product quantity
and quality are being honored
 Monitor invoices, product quantity and quality on a
consistent basis
 Sign off on purchases only after they have been fully
inspected
 Product not matching specifications provided in bid should be
returned or exchanged.
 Note returns or exchanges for future producer evaluation
 Audit invoices and confirm that prices match what was
quoted during the purchasing process.
 Variances should be corrected
 Note variances for future producer evaluation

15. 15
Three Bids and a Buy: Template

16. 16
Questions?
Thank You!
Randy Jones
School Nutrition Team
Contract Specialist/Procurement
Department of Public Instruction
E-Mail: randall.jones@dpi.wi.gov
Phone: 608-267-2277
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