1. Procurement 101 Targeting Local Foods Through a Fair, Open, and Competitive Procurement MA Farm to Cafeteria Conference| Jan. 13, 2015 Welcome!

2. Overview Procurement principles and process Procurement methods Key procurement concepts Defining local and where to find local foods Ways to buy local products Resources and questions

3. What Is Procurement? Procurement is the purchasing of goods and services. The procurement process involves: Planning Drafting Specifications Advertising the Procurement Awarding a Contract Managing the Contract Procurement Principles Procurement Principles

4. Why are Procurement Rules Important? To ensure that program benefits (and taxpayer dollars!): »Are received by eligible schools and children »Are used effectively and efficiently, with no waste or abuse

5. Procurement Methods Federal Threshold = $150,000 MA Threshold = $35,000 Municipality = varies Small Purchase (Requires price quotes from at least 3 bidders) *NEW* Micro-Purchase Threshold of $3,000 (no bids required) Sealed Bids (IFBs) & Competitive Proposals (RFPs) (Requires public advertising ) Informal Formal ≤ Small Purchase Threshold >

6. NEW in 2015: Micro-purchase Threshold ≤ $3,000; Micro Purchase Threshold [NEW] FNS Memo implementing OMB Super Circular: On February 27, 2015, FNS will issue a memorandum implementing the new Super Circular at 2 CFR Part 200. CFR 200.320 states, “Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed $3,000 (or $2,000 in the case of acquisitions for construction subject to the Davis-Bacon Act). To the extent practicable, the non-Federal entity must distribute micro-purchases equitably among qualified suppliers. Micropurchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable.”

7. The Informal Procurement Process

8. The Formal Procurement Process

9. Splitting Procurements 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. …such as Harvest of the Month programs, taste tests, products for a Farm to School Month promotion.

10. 3 Key Concepts 1)Competition 2)Knowledge of Federal, State, and Local Regulations 3)Responsive and Responsible

11. 1 Competition Competition is essential to ensure the best cost and quality of goods and services.

12. Why is Competition Important? Price! »Sellers may accept a smaller margin of return on a given sale rather than make no sale at all. »Schools may receive more goods or services at a lower price than in a non-competitive environment.

13. Why is Competition Important? Quality! »Businesses seek to differentiate themselves in terms of quality and innovation. »Each procurement offers an opportunity to consider new and/or higher quality products and services.

14. Schools must be aware of procurement requirements at the federal, state and local levels and are responsible for complying with all levels of regulations. In some cases, state and federal regulations may be in conflict with each other. 2 State and Local Procurement Policies

15. 3 Responsive and Responsible 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.

16. Section Summary Procurement is a process, not a one-time event Informal vs. Formal Methods Ensure competition- Price! Quality! Follow Federal, State, and Local Procurement Policies Make sure bidders are responsive and responsible

17. Defining Local and Where to Find Local Foods

18. What Does Local Mean? Who defines local? School food authorities What are you trying to accomplish? Is there state based initiative around local food purchasing that you would like to align with? Do you want to couple local purchases with farm visits and have personal relationships with suppliers? Do you want to make a definition that aligns with neighboring districts?

19. Defining Local Within a radius Within a county Within a state Within a region A district’s definition of local may change depending on the: Season Product Special events

20. What Types of Products?

21. What’s Already Local on Your Menu? Look at your records. Ask your suppliers whether they purchase local products. What Could Be Local? Conduct a menu audit. »Are there items that could easily be replaced with local products? Think about ways to integrate. »Harvest of the Month program »New recipe development »Salad Bar »Seasonal Cycle Menu Include tracking of local in future contracts.

22. Where to Get Local Foods 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

23. Local as a Product Specification “X District is soliciting bids for Massachusetts-grown products.” “This RFP is restricted to producers from within the state.” “We are soliciting bids from producers within a 100 mile radius.” “Only products grown within a 75 mile radius will be accepted.”

24. What the Legislation Says Section 2403 of the 2008 Farm Bill says: “The Secretary shall allow institutions receiving funds under this Act … to use a geographic preference for the procurement of unprocessed agricultural products, both locally grown and locally raised.’’

25.  Local as a Preference “X District operates a Farm to School Program, and prefers to support local and regional producers.” “We seek opportunities to incorporate local food into our program whenever possible.” “Preference will be given to vendors that can document source of origin, and procure product from within the state.”

26. Targeting Local through an Informal Procurement

27. “Three Bids and a Buy” Develop a Specification Apples, US. No. 1, five 185 count boxes per week for Sept-Dec 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. VendorArt’s ApplesOlivia’s OrchardApple Crunch Inc. Price/box$40$47$37

28. “Three Bids and a Buy” Develop a Specification Apples, US. No. 1, five 185 count boxes per week for Sept-Dec Solicit Bids Contact ONLY LOCAL vendors (by phone, fax, email, in-person or via mail); provide them w specifications (or if calling, read same information to each vendor). Bid Documentation Write down each vendor’s bid and constraints; then file it. VendorArt’s ApplesOlivia’s OrchardApple Crunch Inc. Price/box$40$47$37

29. “Three Bids and a Buy” Develop a Specification McIntosh or Macoun apples, US. Fancy or No. 1, prefer five 185 count boxes per week but willing to consider other pack sizes for Sept-Dec. Solicit Bids Contact ONLY LOCAL vendors (by phone, fax, email, in-person or via mail); provide them w specifications (or if calling, read same information to each vendor). Bid Documentation Write down each vendor’s bid and constraints; then file it. VendorArt’s ApplesOlivia’s OrchardApple Crunch Inc. Price/box$40$47$37

30. Targeting Local Foods in a Formal Solicitation

31. Consider requesting: A variety that is unique to the region Product delivery within 24 or 48 hours of harvest Use Product Specifications to Target a Local Item 1

32. Product Specification Granny Smith, US. Fancy, Five 185 count boxes per week for September - December Example: Use Product Specifications

33. Product Specification Granny Smith or, US. Fancy or No. 1, Prefer five 185 count boxes per week but willing to consider other pack sizes for September – December Delivered within 48 hours of harvest

34. Remember that you must award to a vendor who is both responsive and responsible! All vendors must be able to provide the products you need to be considered responsive. Vendor requirements may include the ability to provide: »Farm visits »State, county, farm of origin labeling »Products grown on a certain size farm Use Additional Requirements to Determine Vendor Responsiveness 2

35. What can you ask for? »Particular varieties unique to the region »Freshness (e.g. Delivered within 48 hours) »Specific size of farm »Harvest techniques »Crop diversity »Origin labeling »Able to provide farm visits or class visits

36. Other Things to Consider When Writing Solicitations to Target Local Products Be flexible Don’t include unnecessary requirements Consider what a vendor new to the school food market might not know »Condition upon receipt of product »Food safety needs »Size uniformity

37. Not sure where to start? Put out an Requests for Information (RFI) Survey the market to understand: »Quantity available »Price point »Seasonal availability »Willingness to work with schools »Whether geographic preference is necessary »Who the producers are! Collaborate with surrounding districts Work with a community partner

38. Section Summary Defining local is up to you! There are many sources of local foods- find which might work best for you (direct from farm, through distributor, DoD Fresh?) Ask for what you want, but be mindful of creating a fair and open playing field for bidders (not overly restrictive) Cite local as a preference, not a requirement

39. NFSMI Procurement Training NFSMI Guide: Procurement in the 21st Century http://www.nfsmi.org/documentlib raryfiles/PDF/20130820034348.pdf Online training courses: Procurement Basics http://www.nfsmi.org/Templates/T emplateDefault.aspx?qs=cElEPTEzN Q Local Procurement: http://www.nfsmi.org/ResourceOver view.aspx?ID=515

40. More FNS Resources Local Procurement Guide and Webinar Series: http://www.fns.usda.gov/farmtos chool/procuring-local-foods http://www.fns.usda.gov/farmtos chool/procuring-local-foods Procurement of Food Service Management Companies: http://www.fns.usda.gov/sites/def ault/files/FSMCguidance-sfa.pdf

41. Thank you! Questions? Martine Cherry martine.cherry@fns.usda.gov Danielle Fleury danielle.fleury@fns.usda.gov