1. Part 7 – Formal Procurement
Purchases over $150,000 or
over the Organization’s Simplified Acquisition Threshold
Welcome to Oregon Department of Education Child Nutrition Program’s training on procurement. Part 7 is about Formal Procurement. The Formal Procurement method is used for purchases that are greater in cost than the Federal Acquisition threshold of $150,000 or the Sponsoring Organization’s simplified acquisition threshold, if set lower than the Federal threshold.

2. Federal Procurement Roadmap
All CNP Sponsors
Is the purchase or contract worth more than $150,000 or the Sponsor’s Simplified Acquisition Threshold?
Purchase/contract less than $150,000
Purchase/contract greater than $150,000
In Part 1 – Procurement Overview, the ODE CNP Federal Procurement Roadmap was introduced. This roadmap presents a decision-making flowchart to help in determining which method of procurement to use.
When the question: “Is the purchase or contact worth more than $150,000 or more than the Sponsor’s simplified acquisition threshold is answered “yes” (click),then the (click) formal procurement process must be used. There are three methods of procurement which may be used under the formal procurement process – Sealed Bids, Competitive Proposals and Noncompetitive Proposals. Part 7 will primarily describe (click) sealed bids and (click) competitive proposals. The noncompetitive proposal method of procurement is not included on the Federal Procurement Roadmap, because this method of procurement is not a commonly used method of procurement and may only be used in specific circumstances and must be approved by ODE CNP in advance. The noncompetitive proposal and the circumstances for when it may be used will be presented in this session, so Sponsors may understand when this method of procurement may be used.
Use Informal Process
Use Formal Process
Micro
Small
Competitive
Proposals
Sealed Bid

3. Definitions Solicitation – a document to procure
Clear, accurate description of technical requirements
Requirements to fulfill or factors used in evaluating
The document telling prospective sellers what is needed.
Invitation for Bid (IFB) – is a type of solicitation document
primary consideration is cost;
Publicized
Now let’s go over a few definitions of terms that we will be using during this presentation:
A (click) solicitation is a document used by the sponsoring organization to acquire or procure goods, products, or services.
(click)Solicitations must include a clear and accurate description of the technical requirements for the material, product, or service to be procured. This is also known as specifications, which is covered in Part 8.
(click) Solicitations must also identify all the requirements which the respondents (prospective sellers) must fulfill and all factors to be used in making decisions on the solicitations or proposals.
(click) A solicitation document is simply a document telling prospective sellers what the purchaser needs.
An (click)Invitation for Bid (IFB) is a type of solicitation document used in competitive sealed bidding in which the primary consideration is cost;

4. Definitions cont.
Request for Proposal -is a type of solicitation document
Publicized
Negotiations are conducted
Used when conditions are not appropriate for sealed bids.
Material change -is a change made to a contract after the contract has been awarded
alters the terms and conditions of the contract substantially
other respondents may have bid differently and more competitively.
A (click) Request for Proposal (RFP) is a type of solicitation document . This document is used for the formal procurement method of competitive proposals. The RFP identifies the goods and services needed and all significant factors that are used in the decision making process.
(click) The RFP is publicized and is used to solicit proposals from a number of sources.
(click) Negotiations are conducted with more than one of the sources submitting proposals, and either a fixed price or cost reimbursable type contract is awarded.
(click) Competitive proposals may be used if conditions are not appropriate for the use of competitive sealed bids.
A (click) Material Change is a change made to a contract after the contract has been awarded that (click) alters the terms and conditions of the contract substantially enough, that, had other (click) respondents (vendor/bidder) known of these changes in advance, they may have bid differently and more competitively.

5. Definitions cont. Respondent – a vendor or bidder such as:
Commercial enterprise
Public or nonprofit private organization
individual
Responsible – capable of performing successfully under the terms and conditions of the contract
Responsive – will comply with the terms/conditions of contract without material change
(click)Respondent – is also referred to as a vendor/bidder that responds to a solicitation and potentially enters into a contract with the Sponsoring organization. Potential vendors or bidders include:
(click) a commercial enterprise,
(click) a public or nonprofit private organization,
(click) or an individual
To be considered (click) responsible, a vendor/bidder must be capable of performing successfully under the terms and conditions of the contract. Qualified respondents must be
Eligible – possess licensing or certification if required, and there must be no conflict of interest
Able – capable of providing the desired good, product or service
responsive, and
willing to provide the product or service being sought.
(click) Responsive – the vendor or bidder clearly indicates compliance without material change from the terms or conditions of the contract. At the time of the contract, the vendor/bidder has the experience, facilities, reputation, financial resources necessary to fulfill the contract.

6. Formal Procurement methods
Sealed bids - Invitation For Bid (IFB) OR Competitive proposals - Request for Proposal (RFP)
Two formal procurement methods are sealed bids and competitive proposals. (click) Sealed bids are publicly solicited through an Invitation for Bid (IFB), and (click) competitive proposals use a Request for Proposal (RFP).
The type of purchase being made determines if sealed bids or request for RFP will be used for the procurement method.
A sealed bid or IFB is the method where bids are publicly solicited. A fixed price is awarded to the responsible bidder whose bid meets all the specifications of the contract and is the lowest price. This type of bid is used when there is no significant difference among goods, products and services that meet the specifications. The only difference among responsive bids is price. An example of a product that might be purchased with a sealed bid might be kitchen equipment. If a sponsor needs to purchase commercial refrigerators, ovens, and dishwashers, the specifications of each item will be stated and the successful bidder will have the lowest price for all equipment meeting the specifications.
A competitive proposal or RFP is used when price is only one of the criteria that needs to be considered among the bids for goods, products or services that meet specifications. An RFP is needed when the sponsor has a concept to accomplish and will ask vendors or bidders to provide a variety of ways to provide the end product. An example of when an RFP might be used is for a kitchen remodel with equipment purchases. The Sponsor may not know exactly what they need and are looking to compare proposals to get the best price.

7. Invitation for Bid (IFB) 2 CFR 200.320(c)
Sealed Bids
Invitation for Bid (IFB)
2 CFR (c)
Now let’s discuss sealed bids and the Invitation for Bid in more depth.

8. Sealed Bids (IFB) Publicly solicited
Fixed price awarded to responsible bidder meeting all specifications and is lowest price
No significant difference among goods, products or services
Only difference is price
Negotiation is not used
A sealed bid or IFB is the method where bids are publicly solicited and a fixed price is awarded to the responsible bidder whose bid meets all the specifications of the contract and is the lowest price. This type of bid is used when there is no significant difference among goods, products and services that meet the specifications. The only difference among responsive bids is price.

9. Sealed Bids (IFB) cont. Clear & concise specifications
Minimum standards or conditions expected of bidder
Solicited from adequate number of known suppliers
Sufficient time to respond
An IFB or sealed bid requires the organization to write in the IFB
(click)clear, concise specifications of the goods, products or services.
(click)A description of the minimum standards or conditions expected of a responsible respondent in measureable terms.
Additionally, the organization must
(click)Solicit bids from an adequate number of known suppliers
(click)Give sufficient time for bidders to respond prior to the date set for opening the bids

10. Sealed Bids (IFB) cont. IFB advertised to public Bids publicly opened
Award is publicly announced
Fixed price contract awarded
Responsible respondent bid
Conforms to all material terms & conditions
Lowest price
Once the IFB document is developed and written:
The IFB is advertised to the public
The bids are opened at the time and place described in the IFB, and
The award is publicly announced
The public announcement and opening are very important phases of the sealed bidding process as they are critical to ensuring that the procurement occurs on a level and fair competitive playing field.
The bids must be opened at the time and date prescribed in the IFG. For local and tribal governments, the bids must also be opened publically.
A fixed price contract is awarded to the responsible respondent whose bid,
conforming to all the material terms and conditions,
is lowest in price.

11. Competitive Sealed Bidding
Complete specifications or product descriptions of products, goods and services
Responsive Bids differ only in price
More than one qualified source willing and able to compete
Negotiation not used
A sealed bid or IFB is used when
Complete specifications or descriptions of the goods, products or services is available or easily developed by the sponsoring organization. In other words, the goods, products or services to be procured can be easily identified.
Responsive bids differ only in price
There is more than one qualified vendor or bidder thought to be willing and able to compete for the award
Negotiation is not used.

12. What is awarded?
Firm fixed price contract – lowest responsive and responsible bidder
Any or all bids may be rejected if there is sound documented reason
What is awarded?
A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. In a firm, fixed-price contract, rebates discounts and credits do not have to be returned to the nonprofit food service account as the vendor factors this into the price they are willing to “fix” for the contract period. Any or all bids may be rejected if there is a sound documented reason.

13. Sealed Bids Summary  Sought from adequate number of suppliers
 Publicly advertised
Include any specifications and define the items or services
 Opened at the time and place prescribed in the IFB
A firm fixed price contract award will be made in writing
Any or all bids may be rejected if there is a sound documented reason
In summary to ensure full and open competition,
sealed bids must be sought from an adequate number of known suppliers. Two or more responsible bidders are willing and able to compete effectively for the business
the invitation for bids must be publically advertised; The public announcement of the bid provides potential bidders with enough response time prior to the date set for opening the bid,
The invitation for bids include any specifications and pertinent attachments and must define the items or services in order for the bidder to properly respond;
All Bids will be opened at the time and place prescribed in the invitation;
A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. The selection of the successful bidder can be made principally on the basis of price
Any or all bids may be rejected if there is a sound documented reason.

14. Example: Sealed Bid (IFB)
Vended Meal Services
5000 suppers and 300 PM snacks monthly
Meet meal requirements and provide vegetarian options
Provide disposable dishes, utensils and napkins or provide delivery of dishware and pick-up for cleaning with each meal.
Now let’s look at an example of when it may be appropriate to use a sealed bidding (IFB) in the procurement of a service.
A sponsor of five sites needs vended meal services to provide 5000 suppers and 300 PM snack monthly for 12 months a year. The monthly reimbursement in previous years has been between $15,000 and $20,000. Therefore, the yearly cost of providing vended meals and snacks exceeds the $150,000 simplified acquisition threshold. In addition to providing meals and snacks meeting meal pattern requirements, the sponsor wants to have vegetarian options. Additionally, the vendor should include in the bid the provision of dishware, utensils, napkins. If the dishware and utensils are not disposable, then the bidder must be able to take the dirty dishware and utensils back to be cleaned.
In this scenario, an IFB is the appropriate method of procurement since the successful bidder must be able to provide the specified services at the lowest price.

15. Competitive Proposals
Request For Proposals (RFP)
2 CFR (d)
Now let’s look at Competitive Proposal or RFP in more depth.

16. Competitive Proposals
Use a Request for Proposals (RFP)
Technical proposal
Cost proposal
Must have full & open competition
No public opening required
Records must be kept
What is Competitive Proposal (i.e. RFP)?
The Competitive Proposal uses a Request For Proposal document. This document has two elements:
The technical proposal is the section where the bidder explains how the task will be accomplished
The cost proposal is the section where the bidder explains the costs for accomplishing the technical proposal
The RFP is conducted with more than one source submitting an offer to achieve full and open competition
The RFP results in the award of either a fixed price contract or a cost reimbursable contract.
Requests for proposals must be publicized and identify all evaluation factors and their relative importance. However, there is no requirement for a public opening of the proposals. This is because receipt of the proposal is the first step in the process of awarding the contract. Other steps include evaluation of the criteria and negotiation if necessary. Any response to publicized requests for proposals must be considered to the maximum extent practical;
Records must be maintained of the original RFP; responses received; evaluation of the proposals received; negotiations that are conducted; and the final award decision.

17. Components of Competitive Proposal (RFP)
Requests for proposals must be publicized and identify all evaluation factors and their relative importance.
Any response to publicized requests for proposals must be considered to the maximum extent practical
More than one announcement
method
Let’s look now at the process for soliciting using a competitive Proposal
Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Any response to publicized requests for proposals must be considered to the maximum extent practical;
In order not to restrict full and open competition, announcements of IFBs or RFPS should be conducted by more than one method.

18. Methods of Announcement
Newspapers and trade periodicals
Designated internet sites
Direct mailings to known vendors
Other print media that serves the community
The Sponsor may want to consider using more than one announcement method to reach the widest possible audience. With procurement methods, it is prohibited to restrict notification by using only direct mailings as this serves to limit free and open competition. Types of public announcement methods may include:
state designated newspapers and trade periodicals,
designated Internet sites,
direct mailings to known vendors, and
other print media that serves the business community and general public.

19. Components of Competitive Proposal (RFP)
Proposals must be solicited from an adequate number of qualified sources
The non-Federal entity must have a written method for conducting
technical evaluations of the proposals received
for selecting recipients
Proposals must be solicited from an adequate number of qualified sources;
The non-Federal entity must have a written method for conducting technical evaluations of the proposals received and for selecting recipients

20. Competitive Proposals
Receipt of proposals is the first step not last step
Additional steps include
Clarification
Staff who know
How to establish criteria for technical & cost factors
How to negotiate
How to document differences among proposals
In this method, the receipt of proposals is the first step, not the last step, leading up to the award of a contract. The Sponsor may need to ask companies who submit proposals to clarify how they will meet the criteria stated in the RFP, and also may need to negotiate with these companies.
Therefore, Sponsors using the competitive proposals method must have staff who understand:
how to establish criteria for technical and cost factors,
how to evaluate these criteria,
how to negotiate with bidders and
how to document the differences among proposals. 

21. Components of Competitive Proposal (RFP)
Contracts must be awarded to the responsible firm
proposal is most advantageous to the program, with price and other factors considered
Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered

22. Awarding the Contract Submit “best and final offer”
Review technical proposal first
When remaining technical proposals meets needs, the Sponsor seeks to award contracts on basis of best overall value.
After all negotiations and modifications have been completed, each remaining company will submit a "best and final offer.“ The Sponsor needs to review the technical proposals within each "best and final offer" first, to ensure that each of them still fully meets the Sponsor's needs. Remember that is why it is critical that the specifications and criteria contained in the RFP are well-thought-out and well-written.
Once the Sponsor has determined that each of the remaining technical proposals would fully meet its needs, the Sponsor's decision regarding the contract award should be fairly straightforward.
Sponsors should seek to award contracts on the basis of the best overall value. 

23. What is Awarded?
Competitive Sealed Bid (IFB) results in a Fixed Price Contract only.
For Competitive Proposal, (RFP) the SFA must decide if their solicitation will result in a:
Fixed Price Contract
Cost Reimbursable Contract
**The solicitation must clearly state what type of contract will be awarded**
As previously mentioned a Competitive Sealed Bid (IFB) results in a Fixed Price Contract only.
For Competitive Proposals, (RFP) the Sponsor must decide if their solicitation will result in a fixed price or cost reimbursable contract will be awarded. This must be stated clearly in the solicitation document.

24. Summary – Competitive Proposals - RFP
Price not only factor
Receipt is first step not last step
Rank
Negotiate – need staff
Establish criteria for technical & cost
Evaluate criteria
Negotiate with bidders
Document differences among proposals
Let’s summarize what we have learned about competitive proposals.
The competitive proposals method is a formal procurement method that should be used when the basis for contract award is not solely dependent upon the lowest cost because other technical factors need to be considered.
In this method, the receipt of proposals is the first step, not the last step, leading up to the award of a contract. Upon receipt of the proposals, Sponsors need to rank the proposals and then negotiate the technical and cost factors with the bidders.
For these negotiations to be successful, Sponsors must have staff who understand:
how to establish criteria for technical and cost factors,
how to evaluate these criteria,
how to negotiate with bidders, and
how to document the differences among proposals. 
If negotiations have been successful, the Sponsor's decision regarding the contract award should be fairly straightforward. 

25. Do I Use an IFB or RFP? Examples of when an IFB is needed:
Milk service and delivery
Janitorial services
Example of when an RFP is needed:
Kitchen and food serving area remodel
Let’s look at some examples:
Examples of when an IFB is needed:
When milk service and delivery is needed. A minimum number of cartons of milk to be delivered at specified locations and on specific days of the week. For example 100 ½ pint cartons of 1% white milk to be delivered at 20 locations on the Monday and Wednesday each week. Deliveries are made prior to 10 AM. The addresses of each location is specified in the appendix.
When a janitorial service is needed. Janitorial services, which include daily vacuuming all rooms except kitchen and restroom facilities; sweeping and mopping kitchen and restroom facilities and monthly window washing at 20 locations. Janitorial services are provided between 6 and 8 PM daily.
In these examples, the proposals are evaluated according to costs and there is no negotiation.
Example of when an RFP is needed:
To remodel the kitchen and food serving area - in this case the sponsor might have a concept about what to accomplish, but wants vendors to propose a variety of ways to make the concept into a workable kitchen and food serving area.
In this example, there might be negotiation on design of the remodel and the quality of materials and equipment purchased.

26. The Solicitation Document
The solicitation document contains the who, what, when, where and how of the contract. A well written solicitation document allows for respondents to thoughtfully provide their costs for doing business. The solicitation document must identify the requirements or elements respondents must fulfill and the factors used in evaluating the responses or proposals.
The next slides will review some of the elements that are in a solicitation document.

27. Elements of a Solicitation
General information and expectations
Information about the sponsoring agency
Contract type
Specifications of goods and services
Procedural issues
Technical Requirements
Evaluation criteria
The solicitation document is the opportunity to clearly define expectations from a successful bidder. The document includes
General information and expectations
Information about the sponsoring agency
Contract type (Fixed Price or Cost-Reimbursable)
Specifications of goods and services
Procedural issues
Technical Requirements
Evaluation criteria

28. Solicitation Document
General Information
disputes are handled,
invoicing is handled,
products specified are determined,
substitutes (if allowed) can be made, and
items unique to the contract will be identified
The solicitation document provides some general information which describes expectations on how
business will be conducted,
disputes are handled,
invoicing is handled,
products specified are determined,
substitutes (if allowed) can be made, and
items unique to the contract will be identified

29. Solicitation Document
Information about the sponsor
Type of procurement and resulting contract
Specifications of products, goods and services
Procedural issues
Provide a lead paragraph about the sponsoring agency
Identify the type of procurement (IFB, RFP) and the resulting contract (Firm fixed-price or cost-reimbursable)
Provide clear, concise specifications that describe the required characteristics of the goods or services. Also identify any restrictions such as delivery times and frequency, dates, requirements for delivery, dollar value of delivery drop and type of storage available.
Describe procedural issues such as date and time to submit the proposal, instructions for submitting the proposal, the time period for the contract, withdrawals of proposals, protest procedures and cancellation clauses

30. Solicitation Document
Technical Requirements
Respondent’s responsibilities
Rebates
Substitutions
Price escalations
Common legalities
Code of conduct
Evaluation criteria
Technical Requirements:
Respondent’s responsibilities – demonstrate that the bidder is capable of performing successfully under the terms of the contract; indicate compliance with the terms and conditions of the solicitation; and possess the experience, facilities, financial resources to fulfill the contract terms successfully.
Rebates – provide the sponsor with enough information to permit the sponsor to identify allowable and unallowable costs as well as the amount of discounts, rebates and credits on invoices and bills presented for payment.
Substitutions – procedures for delivering substitute items.
Price escalations – state the specific conditions for an increase or decrease in prices. If conditions are used they must be tied to market accepted verifier such as an index.
Common legalities – include Federal and program specific provisions such as Buy American; also include language regarding drug free workplace, equal opportunity, etc.
Code of conduct – Sponsors must have a code of conduct governing performance of officers, employees or agents
Required forms and certifications – provide a checklist of forms that must be submitted
Evaluation criteria – state the criteria used in evaluating the responses.

31. Noncompetitive Proposals
2 CFR (f)
Although these types of proposals are rarely used, there are circumstances when a good, product or service can only be obtained from a single source. This procurement method is called a noncompetitive proposal, or sole source procurement.

32. Definition
Noncompetitive Proposal – a method of procurement used when competition is determined inadequate
Noncompetitive proposal is a procurement method used when competition is determined to be inadequate.
Procurement by noncompetitive proposals may be used only when the award of a contract is infeasible under
small purchase procedures, micro-purchase procedures, sealed bids, or competitive proposals. This is procurement from only one source.

33. When can Noncompetitive Proposals be used?
The item is available only from a single source
The public necessity or emergency for the requirement will not permit a delay
The Federal awarding agency authorizes noncompetitive proposals
Competition if determined inadequate
Noncompetitive proposals may only be used when one or more of the following circumstances apply:
The item is available only from a single source.
The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation.
The awarding agency authorizes noncompetitive proposals.
After solicitation of a number of sources, competition is determined inadequate.
Negotiations must include both price and terms using the same procedures that would be followed for competitive proposals

34. Requirements Approved by ODE CNP prior to award
Food and Nutrition Service (FNS) requires that all sole source procurements be approved prior to award by the applicable state agency. Remember that this does not mean that the state agency must always grant prior approval to any contract involving noncompetitive proposals.
This means that when a noncompetitive proposal is used the state agency must concur with the need for a brand name or single source procurement if the contract is to be
funded out of the nonprofit child nutrition account

35. Recordkeeping Requirements
Records must be kept that document the details of the procurement process. As with all Federal recordkeeping requirements, procurement documents must be kept for 3 years plus the current fiscal year.

36. Documents to Save The solicitation document for the IFB or RFP
Documents showing where and when the IFB or RFP was publicly announce
Responses to the IFB or RFP
The scoring of the RFP
Documents showing any negotiations with responders to an RFP
Final contract
Some of the procurement documents that must be retained on file include:
The original IFB or RFP
Documents showing where the public announcement of the IFB or RFP was made and the date.
Responses received from vendors/bidders to the IFB or RFP
Scoring of the RFP
Documents showing any negotiations that were made with responders to an RFP
The final contract

37. Summary
Definitions Sealed Bids – Invitation For Bid Competitive Proposals – Request for Proposal Elements in solicitation documents Noncompetitive proposals Recordkeeping Requirements
In summary, Part 7 provided information on the methods of formal procurement.
Common terms were defined
Seal Bids or Invitation for Bid was described
The competitive Proposal or Request For Proposal was discussed
Elements in a solicitation document were identified
When noncompetitive proposals may be used
Recordkeeping requirements.

38. Questions
If you have any questions regarding this session please contact your assigned specialist.

39. Resources
Guidance for all federal awards has been boiled down into one document, “2 Code of Federal Regulations (CFR) Part 200”.
Specifically 2 CFR CFR provides the regulations on procurement standards.
Procurement in the 21st Century
Guidance for all Federal awards has been developed in one document 2 CFR Part Specifically, the sections 2 CFR provides the regulations on procurement standards.
Additionally, the document “Procurement in the 21st Century” provides clear information on procurement. Although the document’s target audience is School Districts, the information can be used by all Sponsors.
The resources listed on this slide are located on the ODE CNP webpage.

40. In accordance with Federal civil rights law and U. S
In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, sex, disability, age, or reprisal or retaliation for prior civil rights activity in any program or activity conducted or funded by USDA. Persons with disabilities who require alternative means of communication for program information (e.g. Braille, large print, audiotape, American Sign Language, etc.), should contact the Agency (State or local) where they applied for benefits. Individuals who are deaf, hard of hearing or have speech disabilities may contact USDA through the Federal Relay Service at (800) Additionally, program information may be made available in languages other than English. To file a program complaint of discrimination, complete the USDA Program Discrimination Complaint Form, (AD-3027) found online at: and at any USDA office, or write a letter addressed to USDA and provide in the letter all of the information requested in the form. To request a copy of the complaint form, call (866) Submit your completed form or letter to USDA by: (1) mail: U.S. Department of Agriculture Office of the Assistant Secretary for Civil Rights Independence Avenue, SW Washington, D.C ; (2) fax: (202) ; or (3) This institution is an equal opportunity provider.”
Thank you for participating in the Formal Procurement Training for ODE Child Nutrition Programs. If you have any questions please contact your assigned Child Nutrition Specialist. We greatly appreciate the work that you do to fuel Oregon’s future.