Procurement

Micro-purchase means a purchase of products or services where the total amount does not exceed $10,000 per transaction.

To the extent practicable, purchases must be distributed equitably among qualified suppliers with reasonable prices.

You can identify if a price is reasonable by comparing prices from previous purchases, have personal knowledge of the item being purchased, or comparing prices to similar items being purchased. Check out Market News to get an idea of prices.

Records:

• Receipts documenting total amount purchased falls below $10,000.
• Documentation showing how purchases are being distributed equitably among qualified suppliers.
• If only one qualified supplier, must document why there is only one qualified supplier. Include reasons, such as labor and mileage cost for driving to another location.

The Informal Procurement Method is commonly referred to as procurement under the small purchase threshold or simplified acquisitions. Although this method is permitted when the amount of a purchase falls at or below the most restrictive small purchase threshold ($80,000 in Montana), a school food authority could choose to use the formal< procurement method rather than the informal procurement method.

The following steps are typically involved in an informal procurement:

1. Develop specifications in writing.
   • Describe the goods or services that are needed
   • Any due dates or other requirements
2. Identify sources eligible, able, and willing to provide products.
3. Contact at least two sources.
4. Evaluate quotes and response to your written specifications.
5. Determine most responsive and responsible bidder at lowest price. Keep procurement documentation.

Records:

• Specifications.
• Receipts, invoices.
• Documentation of price quotes from adequate number of sources (2 or more).
• If only one qualified supplier, must document why there is only one qualified supplier. Include reasons, such as labor and mileage cost for driving to another location.

For purchases greater than the small purchase threshold ($80,000) follow the formal procurement process, using either a request for proposals (RFP) or invitation for bid (IFB).

Formal procurement occurs when a school food authority’s purchases exceed the Federal, State, or local small purchase threshold (whichever is more restrictive).

Montana’s small purchase threshold is $80,000, which is more restrictive than the federal threshold of $150,000. Within formal procurement there are two methods available:

Competitive Sealed Bid/Invitation for Bid (IFB)

This is a formal type of procurement where sealed bids are publicly advertised and result in a firm fixed price contract. Price is the determining factor. Choose vendor with lowest price that meets specifications. This type of procurement:

• Is used for food products that require detailed specifications- such as whole fresh apples detailing size, variety, quantities, delivery, other conditions.
• Determines if a vendor is responsive and responsible by whether or not they meet the requirements.
• Can use Geographic Preference.

The following steps are typically involved in a formal procurement using an IFB:

1. Develop solicitation specifications;
2. Publicly announce/advertise the solicitation;
3. Open sealed bids at a pre-determined time, date, and location stated in the solicitation;
4. Determine the lowest bid from a responsive and responsible bidder, and award the contract.

Competitive Proposal/Request for Proposal (RFP)

Price is a factor and can be negotiated. Price should be the primary factor (for example, not necessarily 51%, it just must be the greatest number of all factors so could be 25% if everything else listed in the scoring is lower). This type of procurement:

• Allows for consideration of other factors than price. Other factors: technical expertise, past experience, quality of proposed staffing. Awarded to vendor who can provide best overall value. Can use Geographic Preference.
• Requires that RFP is publicized and include specs and evaluation factors.
• Can negotiate with one or more vendors submitting offers.
• Includes two main elements as a part of the response to the proposal - technical proposal and cost proposal.

The following steps are typically involved in a formal procurement using a RFP:

1. Develop solicitation specifications​
2. Publicly announce/advertise the solicitation;
3. Evaluate proposals using established scoring criteria included in the solicitation;
4. Enter negotiations with responders who meet or exceed cut-off score; and
5. Award the contract to the most responsive and responsible vendor whose proposal is most advantageous to the program, with price and other factors considered.

Food Service Management Contracts: If interested in contracting with a Food Service Management Company, please contact the OPI School Nutrition Programs for required forms and documents.

• USDA Farm to School Website - watch webinars on Farm to School and download great resources!
• Montana Farm to School Webpage -- LINK REQUIRES UPDATING
• Montana Harvest of the Month Program -- THIS LINK REQUIRES UPDATING - Sign up here!
• Federal Guidance on Procuring Local Foods for Child Nutrition Programs - covers procurement basics, defining local, where to find local products, and the variety of ways schools can purchase locally in accordance with regulations. Check out the guide for sample solicitation language, detailed geographic preference examples and helpful resources.