Understanding Small Purchase Procedures for Child Nutrition Programs

Small purchase procedures, also known as informal procurement, play a crucial role in securing services and supplies for Child Nutrition Programs in Oregon. This process involves simple procurement methods for acquiring items below a specified threshold, without the need for public notice. By obtaining price quotes from multiple qualified sources, organizations can ensure a fair and efficient procurement process that meets the necessary requirements. Utilizing an informal procurement log can help in obtaining competitive quotes and streamlining the purchasing process.

• Small Purchase Procedures
• Child Nutrition Programs
• Procurement
• Oregon Department of Education
• Competitive Quotes

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1. Part 6: Informal Procurement Known as Small Purchase Procedures 2 CFR 200.320(b) Child Nutrition Programs Oregon Department of Education

2. Federal Procurement Roadmap All CNP Sponsors Is the purchase or contract worth more than $150,000 Purchase/contract less than $150,000 Purchase/contract greater than $150,000 Use Formal Process Use Informal Process Competitive Proposals Micro Small Sealed Bid Child Nutrition Programs Oregon Department of Education

3. Definition Small purchase procedures: Simple procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. Child Nutrition Programs Oregon Department of Education

4. What is the Simplified Acquisition Threshold? AKA small purchase threshold Dollar limit threshold after which you must complete a formal procurement Federal and Oregon set at $150,000 Child Nutrition Programs Oregon Department of Education

5. What are small purchase procedures? Price or rate quotations must be obtained from an adequate number of qualified sources Adequate number of sources: Means more than 1 (one), preferably 3 (three) vendors Child Nutrition Programs Oregon Department of Education

6. Advantages of using small purchase procedures Public notice not required Price or rate quotations can be opened at any time Price or rate quotations can be verbal or written Contract award is based on lowest price and meets specified requirements Child Nutrition Programs Oregon Department of Education

7. How do I get 3 competitive quotes? Answer: Use an informal procurement log! Example on next page. Child Nutrition Programs Oregon Department of Education

8. Informal Procurement Log Items that should be included on log: Delivery details Duration of quote Product specifications Estimated quantities Information gathered from vendors Signature and date of sponsor award Child Nutrition Programs Oregon Department of Education

9. Types of award All contractors must receive same information, including specifications Line Item You can award on- Line-item basis (individual item) Bottom-line basis (lowest overall price for all items) Bottom Line Make Award Child Nutrition Programs Oregon Department of Education

10. Records Just like all other procurement, records must be retained for 3 years plus current year. This information includes but is not limited to: Copies of solicitation documents Copies of letters, e-mails, faxes relating to the procurement Name and dates of vendors contacted by phone, and reports on the results of meetings when the contacts were made in person Copies of price or rate quotations received Notification of the successful vendor Any other documents (invoices, cancelled checks, etc.) relating to the purchase What can happen if I don t keep procurement records? Withholding or reclaiming Federal Reimbursement Bid Protests from Vendors/Possible litigation Public Scrutiny Child Nutrition Programs Oregon Department of Education

11. Follow the 7 steps to a good informal procurement Step 1- Before obtaining quotes Talk to prospective vendors Seek out enough vendors Build quality business relationships Child Nutrition Programs Oregon Department of Education

12. Step 2- Planning your Procurement Draft solicitation document Write down product specifications Write down any other requirement for the procurement Child Nutrition Programs Oregon Department of Education

13. Step 3-Starting the solicitation process Contact vendors (by phone, email, fax, in person, or mail) and provide written specifications, or If calling, read off the written specification Provide the same language and specifications to each vendor Sponsors should always use caution when verbally communicating Written communication is preferred Child Nutrition Programs Oregon Department of Education

14. Step 4-Document vendor responses Write down in your purchase log the: Vendor Name, Contact Method, Name of person providing the price quote, The price quoted, Date price quote was obtained and Duration of price quote (note it is recommended for sponsors to dictate this to the vendor to ensure constancy in how long the price quote is valid) Child Nutrition Programs Oregon Department of Education

15. Step 5-Obtain price quotes from at least three (3) vendors Competition means more than one (1), two (2) is the minimum and three (3) is recommended Child Nutrition Programs Oregon Department of Education

16. Step 6-Award the contract/purchase to the most responsive and responsible vendor with the lowest price What is a responsive and responsible vendor? A responsive vendor is able to meet the requirements of the solicitation A responsible vendor is willing and capable of furnishing the goods or services solicited. Child Nutrition Programs Oregon Department of Education

17. Step 7-Monitor invoices and products to ensure that bid prices, product quantity and quality are being honored Monitor invoices Sign off on purchases only after inspection Product not matching specifications Audit invoices to verify that the prices charged match the prices quoted Variances should be documented and corrected Note returns, exchanges and variances Child Nutrition Programs Oregon Department of Education

18. Fragmentation What is that? Splitting purchases by purchase the same item over a period of time to avoid the small or formal procurement method. This is not an allowable practice. Example- obtaining quotes each month for a product when the yearly aggregate cost exceeds formal threshold limit of $150,000 and does not meet micro- purchase procedures. Child Nutrition Programs Oregon Department of Education

19. Scenarios using Small Purchase Procedures Sally wants to purchase a new freezer for her kitchen. She anticipates the cost will be around $8,000. Sally wants to complete an informal procurement because it will save her time versus completing a formal procurement. She contacts a local equipment vendor and asks them for their best price. She verbally agrees to purchase it from the vendor. The purchase was completed. Did Sally meet informal procurement requirements for this purchase? Child Nutrition Programs Oregon Department of Education

20. ANSWER: NO Quotes must be solicited from at least two vendors, preferably three or more! Verbal quote information must be documented in writing to justify procurement and retained for audit purposes. Child Nutrition Programs Oregon Department of Education

21. Scenarios using Small Purchase Procedures Fred purchases the majority of his groceries from a distributor and he spends over $150,000 per year. However, he has local produce companies that can offer better produce for a lower price than his distributor. Fred spends about $50,000 total on produce for the year. Fred calls three vendors and asks for quotes on a variety of produce products. He writes the information down and awards to the vendor with the lowest overall price that met the specifications. Did Fred meet informal procurement requirements for this purchase? Child Nutrition Programs Oregon Department of Education

22. ANSWER: YES You can segment purchases by category if there are responsible vendors available to support segmenting, allowing sponsors to obtain the best product at the best price. This is not considered fragmentation. Fred documented the quote information received and awarded to lowest price vendor that best met the specifications. Child Nutrition Programs Oregon Department of Education

23. Questions Child Nutrition Programs Oregon Department of Education

24. Resources ODE CNP Procurement webpage http://www.ode.state.or.us/search/results/?id=383 2 CFR 200.320(b) http://www.ecfr.gov/cgi-bin/text- idx?SID=c2e6ce95115ee25a91922be09c27ba2d& mc=true&node=se2.1.200_1320&rgn=div8 Child Nutrition Programs Oregon Department of Education

25. 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) 877-8339. 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: http://www.ascr.usda.gov/complaint_filing_cust.html, 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) 632-9992. Submit your completed form or letter to USDA by: (1) mail: U.S. Department of Agriculture Office of the Assistant Secretary for Civil Rights 1400 Independence Avenue, SW Washington, D.C. 20250-9410; (2) fax: (202) 690-7442; or (3) email: program.intake@usda.gov This institution is an equal opportunity provider. Child Nutrition Programs Oregon Department of Education