1. 1 Micro-Purchasing & Informal Procurement Jo Dawson Alaska Child Nutrition Programs Updated 7/15

2. 2 Procurement Plan  New requirement under 2 CFR 200 - Uniform Grant Guidance  Districts may have one on file, must address:  Conflict of Interest  Allowability of purchases

3. 3 Procurement Methods  Micro-purchases  Small purchase procedures  Sealed bids (formal advertising)  Competitive proposals  Noncompetitive proposals

4. 4 Procurement a Multi-Step Process

5. 5 Micro-Purchasing

6. 6 Micro-Purchases  Micro-Purchase Threshold = < $3,000  2 CFR Part 200.67 and 2 CFR Part 200.320 a)Aggregate dollar amount does not exceed the micro- purchase threshold. b)Distribute micro-purchases equitably among qualified suppliers. c)May be awarded without soliciting competitive quotations if the price is considered reasonable.  Best practice – include this in the procurement procedures.

7. 7 Small Procurement

8. 8  (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.  (§200.88 Simplified Acquisition Threshold = $150,000)

9. 9 Small Purchase Threshold  States and locals may set a more restrictive small purchase threshold. The most restrictive threshold applies (federal or local). EXAMPLE Federal Small Purchase Threshold$150,000 Local Small Purchase Threshold$40,000

10. 10 Quote Options  Quotes must be obtained by 2 or more vendors  Quote per purchase or contract  Marketbasket study

11. 11 Small Purchase Procurement Methods  Use when the estimated amount of your purchase falls below the small purchase threshold. Small purchases require that schools: a)Develop written specifications; b)Obtain price quotes from at 2 or more responsible and responsive vendors; and c)Document all quotes.

12. 12 Documenting Quotes Develop a Specification Six industrial fruit sectionizers, standard size Solicit Bids Contact vendors (by phone, fax, email, in-person, or via mail) and provide them with specifications (or if calling, read same information to each vendor) Bid Documentation Write down each vendor’s bid and constraints; then file it. * Wisconsin Department of Public Instruction, “Three Bids and a Buy” Resources“Three Bids and a Buy” Resources VendorSanford’s SlicersKevin’s CuttersBobby’s Blades Price/slicer$260$320$245

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14. 14 Market Basket  Used for informal procurement only <$150,000  List the top purchased items  Purchased most frequently  Greatest purchased amounts  i.e. An agency may purchase more cases of crackers than ground beef, but ground beef is a higher portion of the food budget  Go to 2 or more vendors/stores for quotes  Must be conducted annually

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16. 16 Alaska Realities

17. 17 Ordering & Purchasing  Multiple Distributors?  One primary and once secondary? Why?  Emergency shortage?  Distributor replacement foods?

18. 18 Buy American Poll  Which of these situations warrants an exception to the Buy American Provision? a)When the product is not offered in the SFA’s state b)When the product is not produced or manufactured in the U.S. in sufficient and reasonable available quantities of a satisfactory quality c)When competitive bids reveal that the cost of a U.S. product is significantly higher than the cost of a comparable foreign product d)None of the above e)B and C only

19. 19 Minority Business Enterprise  All agencies must take affirmative steps to ensure that minority firms and women’s business enterprises are used when possible. 19

20. 20 Solicitations

21. 21 Informal (Small Purchase) Method Solicitation and Contract All Requirements in Solicitation and Contract Type of Contract – typically fixed-price Scope of Work Contract Period/Duration Contract Termination Provisions Contract Renewal Options

22. 22 Brand Name Poll  True or false: A district can require a specific brand name product in their solicitation.

23. 23 Conflict of Interest  Required under 2 CFR 200 – Uniform Grant Guidance and USDA Policy Memo  Must have a conflict of interest statement on file or in procurement plan

24. 24 Allowable Cost Considerations  Allowable Costs a)All expenditures made from the nonprofit school food service account must be allowable b)To be allowable, costs must meet the following criteria:  Be necessary, reasonable, and allocable for proper and efficient administration of the program  Be incurred for the support of program operations  Be consistent with State/local policies applied uniformly  Be accorded consistent treatment throughout the organization  Conform to limitations/exclusions in Circular and program regs  Be adequately documented and net of all applicable credits  2 CFR Part 200.400 Cost Principles

25. 25 Allowable Cost Considerations  SP 07 -2015, Assessing Proposed Nutrition Education Costs in the National School Lunch Program and School Breakfast Program, dated November 18, 2014  What is the priority status for use of nonprofit school food service account funds?  Is equipment for food preparation current and in good working order?  Is the point-of-service system up-to-date?  What is the status of the nonprofit school food service account?  Are net cash resources in excess of the 3 months average operating expenditures per 7 CFR 210.14?  Are the SFA’s NSLP and SBP operating in compliance with the respective meal patterns for:  Certification for performance-based reimbursement?  Whole grain-rich requirements?

26. 26 State Agency Approval  FSMCs  Equipment purchases using the non-profit food service account $5000 or more per unit

27. 27 Additional Training Coming this fall  Formal Procurement  When is formal procurement needed?  Forecasting  FSMCs – Procurement and contract management

28. 28 Informal Procurement Takeaways Micro purchasing  The aggregate dollar amount of which does not exceed $3,000  Distributed equitably among qualified suppliers and can be awarded without soliciting competitive price quotes as long as the price is considered reasonable

29. 29 Informal Procurement Takeaways Small Purchase  Use when the value of the purchase is estimated below $150,000 (federal small purchase threshold, or local if less)  Is competitive  Use documented solicitations  Request 2 or more oral or written quotes (email, phone, in-person, mail, etc.)

30. 30 Questions?

31. 31 Recordkeeping Poll  How long do you keep micro-purchasing records? A.Current year B.1 year plus the current year C.2 years plus the current year D.3 years plus the current year

32. 32 Milk Purchase Scenario  Tiny-Town SFA, a single site SFA with limited storage and refrigeration space, has informed you that they purchase their milk on a weekly basis from their local grocer.

33. 33 Milk Purchase Scenario: Poll Since the total value of the weekly milk purchase falls below the purchasing threshold, the SFA should use the following method: a)Conduct a formal procurement weekly (involving bids) b)Conduct an informal procurement (written specs and price comparison) c)Micro-procure d)A or B or C e)No competition is required since it’s a small purchase

34. 34 Local Foods Scenario The Jolly Roger SFA purchases food for its FFVP from the farmer down the road. Is this acceptable procurement?  Yes  No

35. 35 Local Foods: Discussion  What question would determine in this situation?  Does it count as competitive procurement if an SFA purchases directly from a farmer?  Does the Local Geographic Preference Rule Apply?  Does your answer change if the purchase was made at a farmers market?

36. 36 Competitive Procurement Poll  Which of the following is a key principle of competitive procurements? a)Transparency b)Free and open competition c)Responsive and responsible bidders d)Fairness and integrity e)All of the above

37. 37 Responsiveness Poll  Which of the following characterizes a responsive contractor? a)Their bid meets all the terms and conditions of the SFA’s solicitation b)Their product or service meets the SFA’s specifications c)They offer the product or service at the lowest possible price d)A and B only e)B and C only

38. 38 Rural Scenario  A small rural SFA does not have access to a distributor. They currently purchase food from the local grocery store, don’t feel they’re getting a competitive price, and realize they’re out of compliance with procurement requirements.  What are some options for this SFA?

39. 39 Rural Scenario: Discussion  Options:  Market basket  Piggybacking  Cooperative Purchasing

40. 40 Poll  Which small purchase threshold should an SFA follow?  Federal Purchasing Threshold  State Purchasing Threshold  Local Purchasing Threshold  None of the above  The most restrictive of the above thresholds

41. 41 FFVP Scenario  A district needs to procure cutting and slicing equipment for their FFVP.  How should they make this purchase?

42. 42 FFVP Poll  If the estimated dollar amount of a procurement is below the applicable formal purchase threshold, which of the following procurement procedures may be used?  Micro purchasing  Small purchase method (informal procurement)  Invitations for bid (competitive sealed bidding)  Requests for proposal (competitive proposals)  Any of the above

43. 43 Procurement Resources  Our procurement webpage at http://education.alaska.gov/tls/cnp/procureme nt.html  Procurement in the 21 st Century: http://www.nfsmi.org/ResourceOverview.aspx ?ID=475 http://www.nfsmi.org/ResourceOverview.aspx ?ID=475

44. 44 USDA Local Procurement Resources  Local Procurement Guide Local Procurement Guide http://www.fns.usda.gov/sites/default/files/F2S_Procurin g_Local_Foods_Child_Nutrition_Prog_Guide.pdf  Finding, Buying, Serving Local Webinars http://www.fns.usda.gov/farmtoschool/webinars Finding, Buying, Serving Local Webinars  Geographic Preference  Final Rule  Q&As: SP 18-2011, SP 03 2012

45. 45 Program Regulations for Procurement: 7 CFR 210.16 (FSMC Contracts) 7 CFR 210.21 (NSLP) 7 CFR 220.16 (SBP) 7 CFR 225.17 (SFSP) 7 CFR 226.22 (CACFP) Uniform Grant Guidance: 2 CFR 200 Procurement Requirements and Regulations