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Procuring Local Foods for Child Nutrition Programs
- 1. Procuring Local Foods for Child Nutrition Programs Christina Conell and Sadie Mele Great Lakes Region Leadership Summit October 28, 2013 United States Department of Agriculture Food and Nutrition Service
- 2. Sadie Mele, Program Specialist, Mountain Plains Regional Office Christina Conell, Program Analyst
- 3. » » » » » Procurement principles and regulations Procurement methods Sourcing locally, and correctly! The Geographic Preference option Incorporating local foods into school meals: an example » Resources » Questions Overview
- 5. Procurement is the purchasing of goods and services. The procurement process involves: Planning Drafting Specifications Procurement Advertising the Principles Procurement What is procurement? Awarding a Contract Managing the Contract
- 6. 1. 2. 3. 4. Competition Responsive and Responsible American Grown Know Your Federal, State and Local Regulations 4 Key Concepts
- 7. » Competition is essential to ensure low cost and good quality of goods and services. 1) Competition
- 8. Do not… » Place unreasonable requirements on firms; » Require unnecessary experience and excessive bonding; » Give noncompetitive awards to consultants; » Have organizational conflicts of interest; » Specify only brand name products; or, » Make arbitrary decisions in the procurement process. 1) Competition Killers
- 9. » 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 2) Responsive and responsible
- 10. » The National School Lunch Act requires SFAs to purchase domestically grown and processed foods to the maximum extent practicable. 3) The Buy American provision
- 11. » Be familiar with all procurement requirements, at the federal, state and local levels » SFA is responsible for complying with all levels of regulations. » In some cases, state and federal regulations may be in conflict with each other. 4) Procurement rules
- 14. ≤ $150,000 > (Small Purchase Threshold) Informal Small Purchase (Requires price quotes from at least 3 bidders) Formal Sealed Bids (IFBs) & Competitive Proposals (RFPs) (Requires public advertising) Procurement methods
- 15. Develop solicitation. Publicly announce the IFB/RFP. Manage the contract. Award the contract to the most responsive and responsible bidder at lowest price. Evaluate bidders using established criteria. The formal procurement process
- 16. » 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. Competitive sealed bidding
- 17. » 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. Competitive proposals
- 18. Develop your specs in writing Identify and notify at least 3 sources eligible, able, and willing to provide products. Manage the contract. Determine most responsive and responsible bidder at lowest price and award contract. Evaluate bidders’ responses to your specs. The informal procurement process
- 19. » Use it when: » The estimated amount of your purchase falls below your small purchase threshold. Small purchase procedure
- 20. » Written specification » Granny Smith, US. No. 1, 5 185 count boxes per week for September-December » Bid documentation » Write down each vendor’s bid and constraints » Ex. Fresh whole Granny Smith apples Vendor Art’s Apples Olivia’s Orchard Apple Crunch Inc. Price/box $40 $47 $37 Bid documentation
- 21. » Are you receiving the product you contracted for? » Is the product of good quality? » Is the vendor delivering on time? Managing contracts
- 24. 1. WHAT: Which types of products? 2. WHERE: From which types of sources? 3. HOW: The mechanics of sourcing local correctly. Buying Local
- 25. Meat, Poultry and Fish Vegetables Dairy 1) Local WHAT? Fruits Beans, Grains, and Flour Eggs
- 26. Ways to define local: » Miles » Region » County » Product-specific » State 1) WHAT: Defining local
- 27. » Through distributors » Through food service management companies » From food processors » Through DoD Fresh » From individual producers » From producer co-ops/food hubs » From school gardens 2) WHERE to get local foods
- 28. » » » » » » » » Using geographic preference; Picking the low hanging fruit; Including related characteristics in specifications; Approaching only local sources under an informal procurement; Including a desire for local items in distributor or FSMC solicitations; Choosing local foods in the DoD Fresh catalog, Using USDA Foods to augment your local purchases; and, Forward contracting. 3) HOW: Sourcing locally, and correctly!
- 29. » Some local products, because of their nature, are likely to be cheaper than non-local competitors. » Ask your providers where your food is coming from—you might be surprised! Procure the easy ones first
- 30. You can include specifications such as “harvested within 48 hours of delivery” that will increase the chances that a local vendor will win the contract. Use Specifications
- 31. » When purchasing local foods, consider specifying: » Degree of ripeness or maturity » Freshness (age) » Condition upon receipt of product » Temperature » Size uniformity » Other quality standards (such as “organic,” “no-till,” “no-spray,” etc.) Other potential specifications
- 32. Foods must be: » Grown on farms that are less than 50 acres in size and grow more than five food crops at one time; » Grown on farms that utilize a majority of hand harvesting, hand packing or human labor power in growing, harvesting. and packing of food; » Delivered within 24 to 48 hours of harvest; » Delivered directly to multiple SDUSD school sites (not a central warehouse). The number of drops is to be determined by the district on a case-by-case basis; » Produce should be generally free from insect damage and decay; and, » Product must be rinsed, cleaned and packed in appropriate commercial produce packaging, such as waxed cardboard boxes. Standard industry pack (case counts) is required and/or half packs are allowable when it comes to bundled greens. Example: San Diego Unified
- 33. » For purchases under your small purchase threshold, you can get quotes from 3 (or more) local farms or vendors. » But remember: » You need written specifications. » Bid documentation Approach only local vendors
- 34. » Tomatoes – Tulsa, OK » » » » » » » » » Hydroponic Available 10 months of the year US No. 1, fully ripe, red color-stage 5-6 10 day shelf life Organic Delivered to 18 schools 2 days prior to service Proof of liability insurance due with bid GAP certified 36 cases per week Write Your Specifications
- 35. Vendor Tom’s Toms Vickie’s Vines Fresh Network Date received July 1 July 6 July 10 Responsive and Responsible Yes Yes No, can only deliver 5 months of year Price/lb $2.20 $2.05 $2.75 Document the bids you receive
- 36. » 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. Splitting procurements
- 37. » Distributors are vital! » One-stop shop » Delivery » Most hold liability insurance » To purchase local through a distributor: » Include this desire in your solicitation » Ask if any of products currently on your contracted list are sourced local Writing local into your distributor solicitation
- 38. » Knox County Schools - Knoxville, TN » Springfield District - Eugene, OR Distributor solicitation - Example
- 39. » Food Service Management Company Contract » Must specify what types of local products and when you would like them in the solicitation and contract. » Cost reimbursable and fixed price contracts » Cost reimbursable contracts require that FSMC follow procurement regulations. » Fixed price contracts are more flexible for the recipient, but may be more difficult for the vendor to manage. Writing local into your FSMC solicitation
- 40. » Rochester County Schools, New Hampshire » Connecting the dots to get local products » South Bay Area, California » Sodexo works with Fresh Point-San Francisco and CAFF identifies producers within 125 miles FSMC solicitation - Example
- 41. » 100% American grown » Every product is local to someone! » Be aware of what is produced in your region and order those products » Explore state processors Locally produced USDA Foods
- 42. » 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 Working with DoD Fresh
- 43. FFAVORS
- 44. » North Carolina » NC Dept. of Agriculture fosters relationships with growers and DoD vendor. » State even facilitates transportation from farm to DoD vendor facility » Connecticut » Holds an annual Know Your Farmer Meeting to facilitate producer relationships with the DoD Vendor » Texas » Texas Farm to School is DoD Fresh Working with DoD Fresh - Example
- 45. » Purchasing product before harvest » Provides producer with a guarantee » Ensures the farmer will plant and pack the supply needed » Understand the risk » What happens if the crop fails? » Must follow competitive procurement process Using a forward contract
- 46. » North Carolina » Issues a solicitation for different products every quarter. » Not too far in advance, which allows for a steady price and more predictable quantity. » Enables districts to have a steady supply and guarantees a market for growers. Using a forward contract - Example
- 47. » Procurement regulations do not apply to donated foods » Consider food safety issues and menus before accepting foods » Document receipt of goods Donated Foods
- 48. » You can target multiple sources with the same mechanism. » Several of the mechanisms can be used in combination. Choosing a source and a mechanism
- 51. » Authorized by Section 4302 of Public Law 110-246, the Food, Conservation, and Energy Act of 2008 (AKA the 2008 Farm Bill) » Final Rule published in April, 2011 The Geographic Preference option
- 52. » Geographic preference can be applied to most school food purchases for unprocessed agricultural products. USDA Foods DOD Fresh Cash Assistance Bringing local into the cafeteria
- 53. » School Food Authority defines local » Local can be defined by: » Region » State » Mileage » Different definitions for different products Who and how to define local?
- 54. “Unprocessed” agricultural products retain their inherent character. These are the allowed food handling and preservation techniques: » Cooling, refrigerating, an d freezing » Peeling, slicing, dicing, cu tting, chopping, shucking, and grinding » Forming ground products into patties » Drying and dehydrating What is “unprocessed”? » Washing, packaging, vacu um packing, and bagging » Adding preservatives to prevent oxidation » Butchering livestock or poultry » Pasteurizing milk
- 55. » Define local. » Decide how much “preference” local products will receive. » Determine what type of procurement method to use. » Be sure your solicitation makes perfectly clear how the preference will be applied. How to incorporate a geographic preference
- 56. Owen’s Apple Lane Orchard Farms Price $1.97 $2.05 $2.03 Meets geographic preference? No Yes (10 points) No Price with preference points $1.97 $1.95 $2.03 Example 1: 1 Penny = 1 Point Bob’s Best
- 57. Produce Ray’s F&V Express Produce Distribution Contract Price $32,000 $35,000 $34,000 % F&V Able to Provide From Within the State 20 80 50 Geographic Preference Points to Respondent able to meet >60% Local Items No Yes (10% pref.) No Price for comparison $32,000 $31,500 $34,000 10% price preference will be awarded to any bidder that can source at least 60% of the products from within the state. Example 2
- 58. Sliding scale of percentage Preference local points 70% and more local products 10 50-69% local products 7 25-49% local products 4 » 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%. Geo. pref. sliding scale
- 59. Price = 40 Contractor ability to perform all specifications Product quality = 15 Delivery = 10 Packaging and Labeling = 5 Three references, past history = 10 Able to provide farm/facility tour or classroom visits = 5 Able to provide state of origin on all products = 5 Ability to provide sourced within the state products = 10 100 possible points Laurie’s Legumes 30 25 Paula’s Pulses Gary’s Grains 35 30 40 30 10 10 10 0 5 5 0 5 5 0 10 7 65 95 97 Example 3: Geo. Pref. in an RFP
- 61. Incorporating local foods into school meals: an example
- 62. Monday Tuesday Submarine Sandwich on Whole Wheat Roll Whole Wheat Spaghetti with Meat Sauce Wednesday Friday Green Pepper Strips Green Beans Broccoli & Cauliflower Whole Wheat Cheese Pizza Whole Wheat Roll Baked Sweet Potato Fries Grape tomatoes Steamed Broccoli Jicama Applesauce Canned Peaches Whole Wheat Soft Pretzel Oven-Baked Fish nuggets Mashed Potatoes Refried Beans Whole Wheat Roll Chef Salad Thursday Low-fat Milk Corn Baby Carrots Banana Skim Milk Cantaloupe wedges Kiwi Halves Skim Milk Low-fat Milk Skim Milk Evolution of a local menu
- 63. Monday Tuesday Submarine Sandwich on Whole Wheat Roll Whole Wheat Spaghetti with Meat Sauce Wednesday Friday Green Pepper Strips Green Beans Broccoli & Cauliflower Whole Wheat Cheese Pizza Whole Wheat Roll Baked Sweet Potato Fries Grape tomatoes Steamed Broccoli Jicama Strawberries Canned Peaches Whole Wheat Soft Pretzel Oven-Baked Fish nuggets Mashed Potatoes Refried Beans Whole Wheat Roll Chef Salad Thursday Low-fat Milk Skim Milk Harvest of the month: Strawberries from Seascape Farm. Corn Baby Carrots Banana Skim Milk Cantaloupe wedges Kiwi Halves Low-fat Milk Skim Milk Evolution of a local menu
- 64. Monday Tuesday Submarine Sandwich on Whole Wheat Roll Whole Wheat Spaghetti with Meat Sauce Wednesday Friday Green Pepper Strips Green Beans Broccoli & Cauliflower Whole Wheat Cheese Pizza Whole Wheat Roll Baked Sweet Potato Fries Grape tomatoes Steamed Broccoli Jicama Strawberries Canned Peaches Whole Wheat Soft Pretzel Oven-Baked Fish nuggets Mashed Potatoes Refried Beans Whole Wheat Roll Chef Salad Thursday Low-fat Milk Corn Baby Carrots Banana Skim Milk Cantaloupe wedges Kiwi Halves Skim Milk Low-fat Milk Skim Milk Evolution of a local menu
- 65. Monday Tuesday Submarine Sandwich on Whole Wheat Roll Whole Wheat Spaghetti with Meat Sauce Wednesday Friday Green Pepper Strips Green Beans Broccoli & Cauliflower Whole Wheat Cheese Pizza Whole Wheat Roll Baked Sweet Potato Fries Grape tomatoes Steamed Broccoli Jicama Strawberries Canned Peaches Whole Wheat Soft Pretzel Oven-Baked Fish nuggets Mashed Potatoes Refried Beans Whole Wheat Roll Chef Salad Thursday Low-fat Milk Corn Carrots Banana Skim Milk Cantaloupe wedges Kiwi Halves Skim Milk Low-fat Milk Skim Milk Evolution of a local menu
- 66. Monday Tuesday Wednesday Submarine Sandwich on Whole Wheat Roll Whole Wheat Spaghetti with Meat Sauce Chef Salad Refried Beans Whole Wheat Roll Thursday Friday Corn Jicama Whole Wheat Roll Baked Sweet Potato Fries Grape tomatoes Steamed Broccoli Strawberries Canned Peaches Low-fat Milk Carrots Green Beans Green Pepper Strips Whole Wheat Cheese Pizza Mashed Potatoes Whole Wheat Soft Pretzel Oven-Baked Fish nuggets Banana Broccoli & Cauliflower Cantaloupe wedges Kiwi Halves Skim Milk Skim Milk Skim Milk Low-fat Milk Evolution of a local menu
- 67. Monday Tuesday Wednesday Submarine Sandwich on Whole Grain Roll Whole Wheat Spaghetti with Meat Sauce Chef Salad Refried Beans Whole Wheat Roll Jicama Thursday Oven-Baked Fish nuggets Whole Wheat Cheese Pizza Whole Wheat Soft Pretzel Whole Grain Roll Baked Sweet Potato Fries Corn Mashed Potatoes Grape tomatoes Carrots Steamed Broccoli Green Beans Green Pepper Strips Strawberries Banana Broccoli & Cauliflower Cantaloupe wedges Canned Peaches Low-fat Milk Skim Milk Skim Milk Kiwi Halves Skim Milk Friday Low-fat Milk Evolution of a local menu
- 68. Monday Tuesday Wednesday Submarine Sandwich on Whole Grain Roll Whole Wheat Spaghetti with Meat Sauce Chef Salad Refried Beans Whole Wheat Roll Jicama Thursday Oven-Baked Fish nuggets Whole Wheat Cheese Pizza Whole Wheat Soft Pretzel Whole Grain Roll Baked Sweet Potato Fries Corn Mashed Potatoes Grape tomatoes Carrots Steamed Broccoli Green Beans Fresh Peas Cantaloupe wedges Strawberries Banana Broccoli & Cauliflower Friday Canned Pears Low-fat Milk Skim Milk Skim Milk Kiwi Halves Skim Milk Low-fat Milk Evolution of a local menu
- 69. Monday Local Lentil Patty Whole Grain Roll Refried Beans Jicama Tuesday Wednesday Thursday Whole Wheat Spaghetti with Meat Sauce Chef Salad Local Spanish Rice with corn Oven-Baked Local Fish Sandwich on a Whole Grain Roll Whole Wheat Roll Carrots Mashed Potatoes Fresh Peas Banana Baked Sweet Potato Fries Steamed Broccoli Strawberries Skim Milk Broccoli & Cauliflower Whole Wheat Cheese Pizza Grape tomatoes Green Beans Cantaloupe wedges Friday Canned Pears Low-fat Milk Skim Milk Skim Milk Kiwi Halves Low-fat Milk Evolution of a local menu
- 72. » Geographic Preference Q&As » Federal procurement regulations » State and local procurement rules and guidance » Washington State Department of Agriculture Guide » National Food Service Management Institute Online Training Resources
- 73. Fact Sheets
- 74. NERO MPRO MWRO MARO WRO SWRO FNS staff are here to help! SERO National Office
Editor's Notes
- During this talk, I hope to: Introduce you to the federal procurement principles and regulations and why they are important Talk about different procurement methods Move into a discussion about the different ways you can source local foods in compliance with procurement regs Talk in depth about how to apply geographic preference to a procurement Discuss some potential sources of local foods Provide you with resources to learn more And (if we have time) answer your questions
- Lets’ start first by defining the basic procurement principals and regulations.
- Procurement means buying goods and services. The procurement process begins with planning – Which goods or services do you need? How much do you need? When do you need them? Once you’ve determined your needs, you document them in detail. Then, you make these specifications known to those who might be able to fulfill them. You award a contract for one of the responders to provide the needed goods and services. And, finally, you manage the contract to ensure that everything is being provided according to your specifications. If you’re spending Federal funds, then at the heart of this process [advance slide for heart to appear] are the Federal procurement principles. The government requires all of its grantees to abide by these principles to ensure that taxpayer money, when used to purchase products or services, is spent only on the best and most responsive products at the lowest possible prices.
- The four key concepts to purchasing with tax paying dollars are: Full and open competitionResponsive and Responsible BiddersProgram Requirement that all food must be American GrownIn addition to knowing the federal purchasing regulations, be sure to familiarize yourselves with your state and local regulations as well.
- The most important principle of a sound procurement is that it is competitive. The regulations use the term “open and free competition,” which essentially means that all potential suppliers are on a level playing field. Ensuring free and open competition is essential to ensuring quality products and low costs.
- Ensuring free and open competition means that procurers Do Not:- Place unreasonable requirements on firms in order for them to qualify to do business, Require unnecessary experience and excessive bonding, Give noncompetitive awards to consultants that are on retainer contracts, Have organizational conflicts of interest,Specify only a brand name product instead of allowing an equal product to be offered and describing the performance of other relevant requirements of the procurement Or do anything arbitrarily action in the procurement process.
- Free and Open Competition includes only awarding bids to vendors who are both “Responsive and Responsible”A responsive bidder means that the vendor submits a bid that conforms to all terms of the solicitation. While a Responsible bid means that the vendor is capable of performing successfully under the terms of the contract.
- NSLP requires domestic food purchases for reimbursable meals. Farm to School takes that another step further by identifying an even more “local source” In very limited cases, such as the banana, some program purchases may come from non US sources. This doesn’t mean that its okay to procure from “local sources” beyond American borders, all purchases should comply with the “Buy American” requirement except for those very limited scenarios.
- It is the responsibility of the school to be familiar with local purchasing rules and regulations. In most cases the school’s purchasing threshold will be lower than the federal level and even lower than their states‘. Please be sure to know your state and local regulations as well as the federal ones.
- Now let’s take a closer look at the Procurement Methods
- An important distinction made in the regulations is between “formal” and “informal” procurements. Under federal rules, the “simplified acquisition” or “small purchase” threshold determines whether a procurement must be conducted “formally.” We’ll get into the distinctions between formal and informal procurement in a minute, but formal procurement includes procurement by sealed bids (which involves issuing an IFB) and competitive proposals (which involves issuing an RFP), while informal procurement requires that procurers follow the simplified acquisition procedures. The current federal government small purchase threshold (found at 41 U.S.C. 403(11)) is $150,000, so grantees must use a formal acquisition procedure to procure anything that costs more than $150,000. States or localities may set lower small purchase thresholds, and many of them do. As long as the State or local threshold is more restrictive, it always trumps the Federal threshold.
- This slide illustrates the formal procurement process. For any purchase above your small purchase threshold, this is the process that must be followed. Step one is developing a solicitation. Step two is to publicly announce your solicitation. Once bids have come in, step 3 is to evaluate them using the criteria established in the solicitation. As we’ll discuss next, those criteria may differ depending on whether you’re procuring by seal bid or competitive proposals. In general though, it’s important to be able to document why one vendor’s proposal is better and more responsive than another’s. Step 4 is to award the contract to the most responsive and responsible bidder offering the lowest priceAnd step 5 is to manage the contract is ensure that you’re getting (and providing) everything that the contract stipulates.
- The regulations say that in order for sealed bidding to be feasible, (A) A complete, adequate, and realistic specification or purchase description must be available;(B) Two or more responsible bidders must be willing and able to compete effectively and for the business; and(C) The procurement must result in a firm fixed price contract awarded principally on the basis of price.If sealed bids are used, the following requirements apply:(A) The invitation for bids will be publicly advertised and bids shall be solicited from an adequate number of known suppliers, providing them sufficient time prior to the date set for opening the bids;(B) The invitation for bids, which will include any specifications and pertinent attachments, shall define the items or services in order for the bidder to properly respond; (C) All bids will be publicly opened at the time and place prescribed in the invitation for bids;(D) A firm fixed-price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs shall be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; andE) Any or all bids may be rejected if there is a sound documented reason.
- Unlike sealed bidding, the competitive proposal method allows for consideration of factors other than price, and it can result in either a fixed price or cost-reimbursable contract. Some of the factors other than price that might be considered include technical expertise, past experience, quality of proposed staffing, etc. The award is made to the offeror who is able to provide the best overall value.
- The informal procurement process is less rigorous and prescriptive, but there’s still a process to be followed, and competition is still required. Step one is to develop your specifications. Step 2 is to determine who might be able to provide products, and to contact at least 3 of those sources. This is the step that’s most different from the formal procurement process, which requires that you publicly post a solicitation so that any qualified vendor can compete. Step 3 is to evaluate the responses you receive.Step 4 is to determine which bidder is offering the best value and award that bidder the contract.And Step 5 is to manage the contract.
- Informal Procurement can only be used when the total value of your purchase falls below the lowest (federal, state or local) purchasing threshold.
- Be sure to clearly write out bid specifications to assure that you are comparingapples to apples. Keep record of each vendor’s bid to justify your purchases. As stewards of federal tax paying dollars it is our job to record and retain this information for all purchases made with program funds.
- Bid specifications not only help during the bid process but are also a great resource for contract monitoring. Make sure to check in your orders and compare what you were quoted against what you received.
- Let’s talk a bit about the types of local foods a school might be procuring. Almost anything can be purchased locally in different parts of the country; local purchasing is not just about fresh fruits and vegetables and it is not just about farmers.Local and regional foods can also include beans, grains and flour, meat, poultry, fish, condiments, herbs, eggs, and dairy; these products can come from local farmers, ranchers, fishermen, food processors, and distributors of all sizes. Fresh fruits and vegetables are a common logical starting place for local procurement. Fresh fruits are especially easy because many can be served with little to no preparation beyond washing. The most comprehensive local buying programs incorporate local products in all of the food categories. Some of the more developed programs adjust existing recipes and menus to accommodate local products (e.g. using bison in place of beef, or barley in place of rice); develop entirely new recipes and menus based on local products and local food tradition…[Etc. – Give examples from your region.]You can ask the audience one or all of these questions or ask that participants form small groups to discuss these questions.What’s local in your area? What are your favorite local foods?What local foods are already on your school menu?
- There are a lot of options for how to define local! “Local” for one school might mean within the county, while “local” for another might include the entire state and even adjacent states. You may even have different definitions of local depending on the season or the type of product that you are purchasing.Images on slide illustrate 3 possible definitions of local for Pierre, SD. Facilitate a short discussion about how local is defined in the participants’ districts. You can start by asking:
- Various ways exist to source local products and stay in compliance with procurement regulations. These mechanisms include:By including geographic preference points in specifications.(Low hanging fruit) Unintentionally, because local products (like milk, or produce in peak season) happen to be cheaper.By including characteristics related to fresh/local in specifications (e.g. “must have been harvested within 2 days of delivery.”)By approaching only local sources under an informal procurement.By incorporating your desire for local foods into a solicitation for a distributor or food service management company. Through DoD FreshUSDA FoodsForward contractingDonated productI’m going to discuss geographic preference in depth, but first I’ll touch on the other methods.
- The characteristics of some products make them more likely to be local. SFAs in some areas are more likely than SFA in other areas to end up “accidentally” procuring local foods. For example, fluid milk is produced in almost every state, and since fluids cost a lot to transport, local milk is likely to be cheaper, so most milk is pretty local. For exampleCalifornia and Florida, are major producers of fruits and vegetables. If an SFA in Southern California chooses to purchase avocados, chances are they’ll be from Southern California. If a Florida school chooses to purchase oranges in winter, chances are they’ll be from Florida. California and Florida are unique, but the same principle holds for procuring products unique to any region—we’ll talk more about that when I get to the next slide. And in Eugene, OR, the Eugene 4j district receives the majority of their produce through Duck Produce located in Portland, OR. Though 4j uses other mechanisms to source local, the district does not specifically request local products from this distributor. Depending on the season and the product, Duck often delivers OR grown product to Eugene 4j with the district’s typical produce order without any request. The point is that oftentimes, schools are buying local foods through distributors without even knowing it. Working with your distributors to find out where your food is coming from will allow you to include these “unintentionally local” foods in your tally of local purchases, and might enable you to reach out to those local suppliers to learn more about their operations, invite them into the classroom for a talk, or even arrange a field trip. If time allows, ask the audience whether anyone can give you an example of something so unique to your state or region that it is most likely to be a local product.
- Specifications can help you target local products.Specifying fresh (harvested within a day or two of delivery) foods is one way to increase the likelihood that a local vendor will win the contract. Another way is to choose to purchase a type of seafood that’s only caught in waters off the coast of your state (or a freshwater fish that’s only available in local lakes and rivers), or a variety that’s only grown by farmers in your region. Offering unique varieties often makes for great learning opportunities as well! As always, ensure that your specifications are not restricting competition.
- In addition to specifying a variety or harvest time, you can include other standards in your specifications to ensure you are receiving the exact product you need. Remember, when writing your specifications you must ensure that you are not unreasonably limiting competition, so if there is only one supplier who can provide no-spray apples, then you probably need to revise your specification. In the same vein, make sure you are not including unnecessary specifications because they may increase the price and/or decrease the number of producers that can meet the specification. For example, if an item does not need to be stored at a specific temperature, then don’t include this in your specification. Since maintaining a specific temperature may require a refrigerated truck and all vendors may not have this capability.
- This slide shows some of the specifications that San Diego Unified School District actually uses for some of their informal procurements. [Read through them or comment on the ones that are most interesting.]Although in many areas, including all of these specifications, or perhaps even one, may restrict competition. San Diego is in a unique area, where there are many local producers that can meet all of these specifications.The last two specifications listed are relatively standard specifications that most SFAs would include in their specifications. This is a good example of specifying the exact way you want the product delivered.The first couple of specifications will help San Diego Unified target local producers. The district has done market research to know that there are several producers that can meet these requirements.
- If you’re making a purchase that falls under your small purchase threshold, you can solicit quotes from 3 (or more) local farms or vendors. You can do this by calling local farms, going to the farmers’ market and talking to them, or posting your specifications on a local listerv or on a flier posted somewhere that farmers will see it.As with any informal procurement, be sure that you have written specifications and that even if you receive no written bids, you document all verbal quotes them. Of the bids you receive, you must choose the responsive and responsible bidder with the lowest price.
- In Tulsa, OK at Union Public Schools, Lisa Griffin, buys local OK grown hydroponic tomatoes and whole wheat flour using the informal procurement method. Since the value of the product she needs falls below the small purchase threshold, Lisa does not need to formally advertise the solicitation and she can call or email producers that she knows can supply the product and meet her district’s definition of local. Before calling suppliers, she writes down the specification for hydroponic tomatoes she might write available 10 months of the year, US No. 1, organic, 10 day shelf life. Lisa includes quality standards such as shelf-life, food safety requirements like GAP certification and liability insurance and the quantity she needs.Lisa receives the bids and selects the responsive and responsible bidder with the lowest price. (She also documents the bids she received and then files it all away.)
- So, if the informal procurement process is so much easier, why not just split up all procurements so that they fall below the small purchase threshold? The procurement principles say that no part of the procurement process can involve arbitrary decisions, and that also applies to dividing your purchases. There are instances in which it makes sense for schools to divide purchases. For example, milk and bread are commonly procured separately because there are fundamental differences between them and other food products, such as shorter shelf-life, specialized pricing mechanisms, and durability. Similarly, An SFA may find that fresh produce may be considered a separate market given that it shares similar characteristics as bread and milk, and may want to separate this procurement from their overall food procurement. It's typical for an SFA to split purchases based on inherent differences in foods such as shelf life, delivery methods, seasonality, and other characteristics, and if your local buying program includes a "Harvest of the Month" or "Seasonal Menu" that you want to use a separate bid for in order to get the best product at the best price, that’s fine too. If an SFA isn’t sure about whether it’s okay to split a purchase, they should contact their State agency. It should be noted that you cannot split bids if you are purchasing the same product from another vendor if you have not previously informed that original vendor you intend to do so when you procured that vendor’s services.If an SFA ever finds itself struggling to justify the division of a purchase, chances are it shouldn’t be split.
- Distributors are an integral part of school food service operations. Many schools rely on broad line distributors to deliver the majority of their food because they provide a one-stop shop, deliver directly, and hold liability insurance. When developing a solicitation for a distributor, SFAs should include a list of products they would like to receive from local sources, including the quantities desired and whether local products are preferred at all times or only in seasonally. SFAs also need to provide a definition of local. Once a distributor has been competitively procured, an SFA may choose any product from the contract list. SFAs may want to include both local and non-local varieties of a product in the contract list to ensure local products are provided when available, and also to ensure that a non-local product is on-hand, when a local variety is not in season.Oftentimes, distributors already offer local products, even when local is not specified in the contract, and an SFA simply needs to order the product. Once the contract is established, the SFA can even suggest specific producers to the distributor. The SFA can also include the desire that local products be source identified.
- In Knoxville, Tennessee, Knox County Schools works closely with the distributor to procure local products. In the produce solicitation, the school lists both local and non local products and asks that local be provided when available. Including both local and non local varieties enables the distributor to offer two different prices for the items and affords the school the flexibility to make a decision between the local and non local items. The distributor provides price sheets on a monthly basis and lists local items and the point of origin for each local item. With the price sheets in hand, the district makes decisions on which items to order taking into account recipes for the upcoming week, the source of the products and price.In Lane County, OR, Springfield district works with Emerald produce, which is a local produce distributor who has strong relationships with farmers in the county.The Springfield district competitively procures Emerald’s services and with the help of Megan Kemple, the state farm to school coordinator and Emerald’s commitment to local farmers, Emerald is able to provide local products every month to Springfield district.Each spring Megan works with four districts in Lane County to develop harvest of the month calendars for each district and once the products are decided upon, she meets with Emerald produce to discuss the availability of the products.Emerald then works directly with local producers to provide the food in the quantities and pack sizes the school needs.Emerald Produce provides a monthly report with the name of the product, name of the farm, city, price and quantity.
- Similarly, an SFA can include their desire for local products in the solicitation for a Food Service Management Company (FSMC). The FSMC’s responsiveness to the request for local products can be considered in the SFA’s evaluation criteria for contract award. SFAs must tell the FSMC how and when they wish to have local food purchased and how local foods are to be used in the meals provided throughout the year. Oftentimes, FSMCs are happy to source local foods but do not know where to start; SFAs can help by connecting them with local growers or growers’ associations, or state, local, and non-profit partners who might be able to assist in identifying local producers.Note that a SFA can hold either a fixed price or cost-reimbursable contract with a FSMC or a distributor. With a cost reimbursable contract, the vendor is paid for all allowable expenses to a set limit plus an additional payment and the vendor must use competitive procurement procedures. A fixed price contract is one where the vendor is paid a negotiated amount regardless of expenses and the vendor does not have to use competitive procurement procedures.
- In New Hampshire, Rochester County Schools solicited contracts with a food service management company and included a requirement that any grower the company buys from is to be GAP certified. Rochester County happens to be close to an apple orchard that is GAP certified. With the help of the New Hampshire farm to school coordinator, the producer connected with the Food Service Management Company and a fruitful relationship was born. Rochester County Schools now receives New Hampshire grown fresh whole apples and apple cider through the food service management company. Several districts in Rhode Island are working closely with Aramark to purchase local products. Aramark has provided produce from more than fifteen Rhode Island farms. School nutrition directors, Aramark, Sysco, non-profits, local producers and a Rhode Island processor have worked together to create cycle menus that incorporate seasonal Rhode Island grown fruits and vegetables.Several districts in the south bay area in California contract with Sodexo for their food services. Sodexo uses Fresh Point-San Francisco as its produce distributor and Fresh Point works closely with the Community Alliance for Family Farmers (CAFF) to identify local producers and source product from within 125 miles of Union City, CA. Through this relationship, CAFF has identified small and medium size producers that are able to drop product off at a larger farm site and Fresh Point San Francisco is able to pick up a variety of producers’ items from one location. Fresh Point San Francisco developed monthly Hot Sheets that showcase important information about local products, lists all of the local products available and where the farm is located.
- About 15 to 20% of food served through the National School Lunch Program comes from USDA Foods, formerly the commodity program. USDA sources these foods through competitive procurements for which a local preference is not possible. In FY 2011, $1.25 billion in USDA foods went to schools. A state’s entitlement derives from the number of meals served in the previous school year. Because every dollar’s worth of USDA Foods used to procure school food frees up money that a school would otherwise have to spend commercially, USDA Foods are essential in a time of tightening budgets!The USDA Foods catalog includes many healthful foods: brown rice, whole wheat flour and pasta, whole apples and pears, dry beans and lentils, frozen blueberries, raisins, whole muscle meats, peanut butter, the list goes on. USDA Foods can absolutely be a part of nutritious, school meals! You may not think of USDA Foods as locally grown products, but remember USDA Foods are all 100% domestic origin, so every available product is local to someone. Be aware of what is produced in your region and order those products. For example, Mississippi is the only state that produces significant, commercial quantities of catfish. This means that if you are in the Southeast, USDA Foods catfish could be local to you. Peaches offered through USDA Foods normally come from California, and pears usually originate in the the Pacific Northwest.
- States and SFAs can elect to spend any portion of their USDA Foods entitlement money on fresh fruits and vegetables through the DoD Fresh Program, operated by the Department of Defense. To supply fresh fruits and vegetables, DoD contracts with more than 45 produce vendors across the country. Although DoD Fresh vendors are not required to purchase local produce, they are strongly encouraged to do so. Forty-six states choose to participate in the DoD Fresh program and several of these states have had success purchasing local produce.In school year 2011-2012, states spent more than $80 million through DoD Fresh and about 17% of those purchases were considered local. In addition to spending commodity entitlement funds through DoD Fresh, states can also elect to use section 4 and 11 cash reimbursement funds on DoD Fresh purchases. Cash reimbursements are the funds that the USDA gives to states for every meal served. The reimbursement rate takes into account meals served and free and reduced price meals served.Each DoD Fresh prime vendor updates the online FFAVORS catalog for their region of service on a weekly basis and marks locally procured products. Local in DoD Fresh signifies that the product is from within the state, the contract award zone, or a state adjacent to the contract award zone. If an SFA seeks to purchase additional local products through DoD Fresh, it should discuss opportunities with the prime vendor, and even suggest specific producers or producer groups to the prime vendor.
- Forward contracting allows producers to plan for large demand and plant according to a school district’s needs. Although contract growing offers a guaranteed market for a farmer’s crop, this method poses risk to schools. Forward contracting is permitted under federal regulations, but districts selecting this method must acknowledge the risk and prepare a contingency plan if the producer experiences crop loss. (i.e., incorporate language into the contract affording meaningful substitutions or a return on the original financial investment). A forward contract could be put in place through an informal or formal procurementWith a forward contract, a school does not pay until delivery, but ensures that the product is packaged and/or frozen to the school’s specification. This burdens the producer with storage and not the school.
- In North Carolina, the Department of Agriculture and Consumer Services solicits forward contracts for a variety of local produce. Working with an advisory board made up of school districts, each spring the Department of Agriculture develops a list of products desired for the next school year. North Carolina started by only issuing one solicitation every year, but has found that they can get better pricing and more stable supply by contracting with select growers each quarter. Contracting four to six months prior to delivery allows the districts to plan menus with confidence and provides growers a guaranteed market for their product. Watermelon provides a perfect case study for how forward contracting can benefit both schools and producers. Traditionally, watermelon season in North Carolina ends in August. However, as schools aren’t in session in August, the North Carolina Department of Agriculture’s contracted with growers to plant watermelons a little later than they normally would. By waiting a few weeks to plant, growers extend their production season and children in North Carolina schools get to enjoy watermelons in September, when the academic year has resumed. In both Oregon and Oklahoma, the state farm to school coordinators work directly with producers and produce distributors to develop forward contracts for product that will go to schools. In these cases, the districts have already competitively procured the produce distributor and the farm to school coordinators help the distributors find local producers for the contracted items and set up forward contracts.
- Suppliers may have extra produce at the end of a harvest day or the SFA may partner with a company that donates food for a special day. In any case, schools may receive donated foods from a variety of places and since these foods are not purchased, federal procurement regulations do not come into play. Donated foods should be held to the same food safety standards as your purchased products. Remember to inquire about the freshness, shelf life and refrigeration before accepting the product. The SFA should also be sure to record the amount of donated food in your accounts to ensure transparency and avoid any possible accusations of impropriety.
- Now that you have heard about all the ways to buy local and we know that local products come in many different shapes and sizes – everything from fruits and vegetables to wheat and meat and dairy, let’s look at how many of these mechanisms can be used in combination to target multiple sources.For example, if an SFA wants to work directly with a producer, the SFA may issue a RFP or IFB or conduct an informal procurement for a forward contract. The SFA may be conducting a separate procurement for this forward contract for a special harvest of the month purchase. Many of these mechanisms may be used together, multiple sources may be eligible to bid on the solicitation, and the contract can be established way ahead of time, or closer to when the product will actually be used. For example in Lane County, OR, the state farm to school coordinator helps facilitate forward contracts between growers and distributors.In this scenario, the districts have competitively procured the distributor, and to ensure local product is available at the time the district needs and in the right pack size, the farm to school coordinator develops forward contracts to help provide a guarantee for the schools and the producers.
- The 2008 Food, Conservation, and Energy Act (AKA the Farm Bill) directed the Secretary of Agriculture to “encourage institutions receiving funds under this Act and the Child Nutrition Act of 1966 to purchase unprocessed agricultural products, both locally grown and locally raised, to the maximum extent practicable and appropriate,” and to “allow institutions receiving funds under this Act and the Child Nutrition Act of 1966, including the Department of Defense Fresh Fruit and Vegetable Program, to use a geographic preference for the procurement of unprocessed agricultural products, both locally grown and locally raised.’’ This provision applies to operators of all of the Child Nutrition Programs.On April 22, 2011, the Federal Register published the final rule for the Geographic Preference Option for the Procurement of Unprocessed Agricultural Products in Child Nutrition Programs. The rule achieves two major objectives:Defines the term unprocessedClarifies who and how to define local
- Let’s look at where Geographic preference comes into play. Geographic preference applies to a really big piece of the overall school food budget, so let’s look at it in depth now.Around 80% of foods are sourced with cash assistance, including federal reimbursement, student payments, and in some cases, state and/or local funding. A geographic preference can be applied to procurement of unprocessed agricultural products made with reimbursement funds.The decision to apply a geographic preference rests with the school food authority
- The final geographic preference rule clarifies that “the school food authority making the purchase or the State agency making purchases on behalf of such school food authorities have the discretion to determine the local area to which the geographic preference option will be applied.” Schools define what they mean by local. While many state and/or local governments have adopted definitions of local such as “within the state” or “within the county,” schools using a geographic preference when sourcing food for the federal school meal programs are under no obligation to adopt any definition for local that might be in existence in local areas. As for defining, there are a lot of options! [Give examples of different ways that “local” is defined in your region.] Images on slide illustrate 3 possible definitions of local for Pierre, SD.] Definitions for local vary widely depending on the unique geography and climate where a school is located and on the abundance of local food producers and manufacturers. Many schools define local as within a certain number of miles from the school, within the county, or within the state. Alternatively, definitions might include more than one state (i.e., Georgia, Alabama, and Florida) or discrete parts of several states (i.e., specific counties in southwest Washington, northeast Oregon, and Idaho). In addition, many schools use different definitions of local depending on the product or season. Also, please note that geographic preference follows the agricultural product, not the location of the respondent, so it is irrelevant where the respondent’s business is incorporated or has a principal place of business.
- To incorporate a geographic preference into your procurement process, you need first to settle on a definition of local. This decision is important because the statute only applies to local agricultural products. You also need to determine how much preference to apply to these products—usually, that preference will show up in your solicitation as a fixed preference or a percentage preference. You can also consider using a tiered approach wherein vendors with products grown within the state are awarded 5 extra points, while vendors with products grown within 150 miles of your district are given 8 extra points. Furthermore, you could indicate that vendors who are able to supply 80% or greater local products will receive a 5% advantage while vendors who can supply 50 – 79% local products will receive a 3% advantage. There are many ways to structure a tiered approach depending on your goals. Don’t worry if this isn’t making sense yet, because we have some examples and exercises that should help you. Remember an RFP or IFB cannot not contain language stating that only agricultural products grown within a certain state will be accepted. Language like that is considered overly restrictive because it is stated as a requirement, not a preference. It’s also not okay to indicate a preference for products grown within 5 miles of your school district when only one farm exists within 5 miles of your district. Such a requirement would be considered an unreasonable limit on competition. If 100 farms existed within 5 miles of your school district, it would not be considered an unreasonable limit on competition. You have to use your best judgment. Now we are going to look at a few examples of how to use geographic preference.
- Here’s an example of how to incorporate preference points in an IFB:A school district issues an invitation for bid (IFB) for apples and states a preference for apples grown within 100 miles of the school. IFB’s are generally used when a firm fixed-price contract will be awarded to the lowest responsive and responsible bidder. The solicitation makes it clear that any respondent able to provide local apples will be awarded 10 points in the selection process. In this example, the 10 preference points are equivalent to a 10 cent reduction in price for the purposes of evaluating the lowest bidder. Apple Lane Farms meets the stated preference for local products and is awarded 10 additional points, which translates into deducting 10 cents from Apple Lane Farm’s price. This makes Apple Lane Farms the “lowest bidder.” The school still pays Apple Lane Farms $2.05 for its product; deducting 10 cents from the price of responsive bidders that meet the geographic preference only applies to determining the winning respondent and would not affect the actual price paid to the respondent.This scenario applies to informal procurements, as well as IFBs and RFPs.
- A school district issues a request for proposals (RFP) for its produce contract and indicates a preference for fresh fruits and vegetables produced within the state. For the purposes of evaluating bids, respondents who can supply at least 60% of the requested items from within the state will receive a 10% price reduction. Ray’s Produce is the only firm that is able to supply greater than 60% of the requested items from the local area, thus, Ray’s Produce receives a 10% reduction in price for the purposes of evaluating bids. Even with the reduction, Ray’s Produce is not the lowest bidder. If price alone were the determining factor for this school district, Produce Express would be awarded the contract. *~*~*
- A preference for local products doesn’t necessarily have to be calculated with absolute values; sliding scales may be appropriate. This chart assigns a certain number of points depending on how many items on the product list can be sourced from within the stated geographic preference area.Points are awarded based on the percentage of total listed products that can be sourced from within the geographic preference area; and, Based on responses from potential vendors you will assign points and determine the amount of points the vendor receives. Using this chart ensures points are assigned by a clear method and not arbitrarily given. The chart along with a description would be sent to potential vendors as part of the solicitation.Ten preference points will be awarded to vendors able to provide over 70% of the requested items from within the state, 7 points for 50-69% and 5 points for 25-49%. Points for local sourcing will be included along with other evaluation factors.
- Requests for proposals may include evaluation criteria that allow for consideration of factors in addition to price, and can result in either a fixed price or cost-reimbursable contract. Thus, reductions in price are not the only way to confer preference to local products.Some of the factors in addition to price that might be considered include technical expertise, past experience, years in business, marketing, etc. School districts may include elements such as farm visits, showing the state or farm of origin on the invoice, or providing farm information for education in the lunchroom as part of their selection criteria. Where factors other than price are included in the selection criteria, awards must be made to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered.A school district issues a request for proposals for beans and grains and makes it clear that bids will be evaluated using a 100 point system. Using the chart on the previous slide, ten preference points will be awarded to vendors able to provide over 70% of the requested items from within the state, 7 points for 50-69% and 5 points for 25-49%. Points for local sourcing will be included along with other evaluation factors. In this example, Paula’s Pulses is able to source 75% of their products from within the state, earning them 10 points in the scoring process in the local products category. Gary’s Grains can source 55%, earning them 7 points, and Laurie’s Legumes is unable to guarantee any products from within the state so they receive 0 points in the local preference category. Gary’s Grains wins the contract. Ask the audience how they are using geographic preference. You can refer to the sample Geographic Preference Language handout and have the group fill out the Fill in the Blank Geographic Preference language.
- Let’s take a look at how all of this, over time, can coming together to create a school lunch menu that’s full of local foods.
- This menu illustrates what a typical week of lunches might look like under the new meal pattern. In itself, this is an historic accomplishment – look at all of those fruits, vegetables, and whole grains! So, how might a school start incorporating local foods into a menu like this?
- Harvest of the Month programs are a great starting place for schools and districts that want to start sourcing locally. In this scenario, the school buys three types of strawberries from a local farmer; students get to try two of each variety, and then vote on the one they like the best. In the classroom, kids learn about how strawberries are grown and harvested, and Harvest of the Month materials produced by the State department of agriculture or education is given to parents, teachers, and the community.
- The strawberries served through the Harvest of the Month program are so well received that the schools starts sourcing strawberries from two different local farmers through their main produce distributor, and adds them to the menu for the two months that they are in season. The school also realizes that all of their milk and cheese is sourced locally. They contact the local dairy and ask if they are open to field trips. They dairy is thrilled, and accepts all fourth-graders for a half-day tour of their operations.
- Then, the school realizes that they can source local foods through the DoD Fresh Program, and that all local fruits and vegetables are labeled as such in the online DoD Fresh catalog, FFAVORS. They start replacing some non-local items with some local items.
- Food service staff start working with local agricultural extension agents and a cooperative of beef producers to figure out how they can source local beef.
- Or maybe the school is in a big grain-producing State and they partner with local wheat producers and a local baker to produce a custom whole grain roll made from regionally produced wheat and oats.
- The school begins replacing some of their standard items with seasonally available foods, and they even begin using a non-profit food processing facility to preserve some of the local harvest…
- Finally, they begin serving custom hot menu items developed with locally available ingredients. Kids and staff love the new items, and school lunch participation increases. Before they know it, school food service staff are serving local foods every day of the week!
- FNS is the lead agency for the USDA Farm to School Team. In each of the 7 FNS regional offices, one staff member has been designated as the “Farm to School Coordinator.” Farm to School Coordinators are available to provide farm to school-related policy guidance and interpretation, and to help State and local agencies in their region integrate farm to school into the child nutrition programs that they already operate. They might also be available to speak at conferences, attend ribbon-cuttings or other media events, and… [include other services that you provide for your State agencies].At the National Level, the USDA farm to school program is supported by a F2S National Director and small staff as well as an F2S Management Team that includes high level USDA officials, staff from FNS, AMS, and ERS.