Micro-Purchasing & Informal Procurement Guidelines

Learn about micro-purchases, small procurement procedures, and procurement methods in Alaska Child Nutrition Programs. Understand the process, thresholds, and best practices to ensure efficient purchasing.

• Procurement
• Guidelines
• Micro-Purchases
• Alaska
• Child Nutrition

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

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 2

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

4. Procurement Plan and Procedures Below the Small Above the Small Purchase Threshold (most restrictive) Procurement a Multi-Step Process Purchase Threshold (most restrictive) Code of Standards of Conduct Informal procedures ($3,000 - $150,000) Formal procedures (above $150,000) Micro-purchase threshold (< $3,000) Develop solicitation documents (IFB,RFP)(specifications, estimated quantities, terms/conditions/provisions) Develop solicitation documents (includes: specifications, estimated quantities, terms, conditions & provisions) Publicly publish solicitation Advertise, obtain & document quotes Evaluate & Award Fixed price or cost-reimbursable contract Evaluate & Award Contract Administration/Performance Management Process 4

5. Micro-Purchasing 5

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. 6

7. Small Procurement 7

8. Small Procurement (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) 8

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 9

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

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. 11

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. Vendor Sanford s Slicers Kevin s Cutters Bobby s Blades Price/slicer $260 $320 $245 * Wisconsin Department of Public Instruction, Three Bids and a Buy Resources 12

13. 13

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 14

15. 15

16. Alaska Realities 16

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

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 18

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 19

20. Solicitations 20

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 21

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

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 23

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 24

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? 25

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

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

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 28

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.) 29

30. Questions? 30

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 31

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. 32

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 33

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 34

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? 35

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 36

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 37

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? 38

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

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 40

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

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 42

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

44. USDA Local Procurement Resources 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 Geographic Preference Final Rule Q&As: SP 18-2011, SP 03 2012 44

45. Procurement Requirements and Regulations Uniform Grant Guidance: 2 CFR 200 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) 45