Streamlining Small Purchases with Three Bids and a Buy Approach
Streamline your small purchases efficiently using the Three Bids and a Buy method. Learn the steps involved in planning bids, contacting vendors, selecting the best bid, managing the contract, and maintaining records for effective procurement processes.
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Three Bids and a Buy First Bid PROCUREMENT Third Bid Second Bid Presented by Randy Jones Department of Public Instruction
Simplified Acquisition Threshold Ref. Competition (2 CFR 200.88) Previously known as Small Purchase Threshold Simplified acquisition threshold means the dollar amount below which a school may purchase property or services using small purchase methods. Non-Federal entities adopt small purchase procedures in order to expedite the purchase of items costing less than the simplified acquisition threshold. The simplified acquisition threshold is set by the Federal Acquisition Regulation at 48 CFR Subpart 2.1 (Definitions) and in accordance with 41 U.S.C. 1908. As of the publication of this part, the simplified acquisition threshold is $150,000, but this threshold is periodically adjusted for inflation.
This flowchart provides a visual of the multi-step procurement process Procurement a Multi-Step Process
Three Bids and a Buy Small Purchase Method - Overview Step 1 - Planning your bid What are your needs? What are your goals? Step 2 - Write down the product specifications and requirements Step 3 - Starting the bid process Contact vendors (by phone, email, fax, in person, or mail) provide them with written product specifications or if calling or in person, read off the written specification from your purchase log. Document vendor responses Write down vendor name, contact method, who provided the price quote, price quoted, date the price was quoted, and duration of price quote Obtain price quotes from at least three vendors (i.e. 3 Bids and a Buy ) Step 4 Select winning bidder Award the contract/purchase to a responsive and responsible vendor with the lowest price. Step 5 - Manage the awarded contract Monitor invoices and products to insure that bid prices, product quantity, and quality are being honored Step 6 - Close out the contract and keep all records for at least 3 years.
Three Bids and a Buy Template Vendor Name: Items to be Purchased: Product specifications Delivery Frequency (If applicable) Packaging 1. 2. 3. 4. 5. 6. 7. 8. TOTAL *Vendor Selected (VS) Method of contact: Phone, Fax, Email or In Person Name of person quoting pricing: Date contacted: Additional Notes: Signature of person completing this form: * Vendor Selected (VS); you can award all items to one bidder (lowest total price) or you can award bid on a line item basis (lowest item price). Extended Price (Quantity x Unit Price) Extended Price (Quantity x Unit Price) Extended Price (Quantity x Unit Price) Quantity Expected to Buy Unit Price Unit Price Unit Price $ $ $ Date:
Review of 3 Bids and a Buy Small Purchase Method Requirements Estimated value of the purchase does not exceed the lower of either the school s simplified acquisition threshold or $150,000. Fewer requirements for soliciting bids: No public notice requirement No closed bid requirement No public opening requirement 3 bids and a Buy is always based on price! Requires less time to prepare and complete the procurement process
Finding and Building Suppliers Relationships Talk with suppliers about future plans to purchase products and services. As the suppliers questions about the best way to send them bids. Schools will want to work with enough suppliers to ensure they can get pricing from at least three vendors. Build quality business relationships with suppliers This saves time when soliciting bids
Steps One, Two, and Three Planning, Specifications, and Documentation Step 1 Prepare and planning your bid: Write down the product specifications in a purchase log Step 2 - Starting the bid process: Contact vendors (by phone, email, fax, in person, or mail) provide them with written product specifications, or if calling or face to face; read off the written specification from your purchase log. Step 3 - Document vendor responses: Name, Contact Method, Who provided the bid, The price(s) that was bid, Date bid was received
Steps Four and Five Price Quotes and Award Step 4 - Obtain price quotes from at least three suppliers (i.e. Three bids and a buy ) Step 5 - Award the contract or purchase to the most responsive and responsible supplier that submitted the lowest bid. 10
Step Six Monitor invoices and products to insure that bid prices, product quantity and quality are being honored Monitor invoices, product quantity and quality on a consistent basis Sign off on purchases only after they have been fully inspected Product not matching specifications provided in bid should be returned or exchanged. Note returns or exchanges for future vendor evaluation Audit invoices and confirm that prices match what was quoted during the purchasing process. Variances should be corrected Note variances for future vendor evaluation
Example of Small Purchase Method School needs to procure fruits and vegetables for the month of October to be served in the class room for its Fresh Fruit and Vegetable Program. Locally sourced produces isn t required but apples and pears should be a good buy this time of the year. Broccoli 2 bags Lettuce cs. 5 cs. Peppers 2 lbs. Pears (120) 10 cs. Cauliflower 10 Pears (Wisconsin variety) 1 cs. Apples (Wisconsin variety) 1 cs. Required equipment: Tomatoes (6x5) 3 cs. Spinach # 3 bags Carrots # 4 cs.
Example of Small Purchase Method (Continued ) The school food service director estimates the value of the procurement to be about $10,000. Because the estimated value of the procurement is more than $3,000 but less than the school s simplified acquisition threshold ($50,000) it was determined that the most effective procurement method is the small purchase method.
Example of Small Purchase Method (Continued ) The school contacted a three local suppliers. Each supplier was provided a list of the equipment needed and other instructions including when the equipment must be delivered. Each supplier provided a bid (total cost pricing for all supplies) for all the items. The school evaluated the pricing from each supplier. All the suppliers were able to meet the requirements presented to them for the purchase.
Example of Small Purchase Method (Continued ) The supplier with the lowest bid (total cost for all the supplies) was selected for the purchase. The supplier was contract to let them know they were selected for the purchase. The purchase was made and delivery was timely. Invoice was checked to ensure items received were the same as those ordered and pricing was correct. Procurement records were filed in appropriate area. This procurement was closed out.
Example of Small Purchase Method (Continued ) Vendor Name: Sam s Produce Pat s Produce M&M Produce Items to be Purchased: Product specifications Delivery Frequency: Second Monday of October Packaging as described. 1.Broccoli Extended Price (Quantity x Unit Price) Extended Price (Quantity x Unit Price) Extended Price (Quantity x Unit Price) Quantity Expected to Buy Unit Price Unit Price Unit Price $4/bag $16.00 $4.25/bag $17.00 $3.75/bag $15.00 4 bags $10/cs. $60.00 $9.75/cs. $58.50 $10.50/cs. $63.00 6 cs. 2. Tomatoes (6x5) $3.50/bag $14.00 $3.50/bag $14.00 $3.50/bag $14.00 3 bags 3. Spinach $12/cs. $48.00 $13/cs. $52.00 $12/cs. $48.00 4 cs. 4. Carrots $3.25/lbs. $16.25 $3.25/lbs. $16.25 $3.00/lbs. $15.00 5 lbs 5. Peppers. $15/cs. $30.00 $14/cs. $28.00 $13/cs. $26.00 2 cs. 6. Pears (Wisconsin variety) $15/cs. $30.00 $14/cs. $28.00 $13/cs. $26.00 2 cs. 7. Apples (Wisconsin variety) 8. TOTAL *Vendor Selected (VS) Method of contact: Phone, Fax, Email or In Person Name of person quoting pricing: Date contacted: Additional Notes: Signature of person completing this form: Susan P. * Vendor Selected (VS); you can award all items to one bidder (lowest total price) or you can award bid on a line item basis (lowest item price). $214.25 $213.75 $207.00 Phone; bid received via email Sam 9/15/15 In Person; bid filled out during visit Pat 9/15/15 Email; bid received via email Mike 9/15/15 Date: 9/18/15
Quiz 1. Why was M&M Produced selected for the purchase? They had the lowest bid. 2. Are three bids required? Three bids are not required, two would have been okay, but the last bid was the lowest. In this case the extra effort paid off. 3. Is this template required? This template is not required. This just an example and your school may have a template that works better for your procurement process.
QUESTIONS? If you have questions contact me with by phone or email: Randy Jones School Nutrition Team Contract Specialist/Procurement Department of Public Instruction E-Mail: randall.jones@dpi.wi.gov Phone: 608-267-2277 18
Thank You! Randy Jones School Nutrition Team Contract Specialist/Procurement Department of Public Instruction E-Mail: randall.jones@dpi.wi.gov Phone: 608-267-2277 In accordance with Federal law and the United States Department of Agriculture policy, this institution is prohibited from discriminating on the basis of race, color, national origin, sex, age, or disability. To file a complaint of discrimination, write USDA, Director, Office of Adjudication, 1400 Independence Avenue, S.W., Washington D.C. 20259-9410 or call toll free (866)-632-9992 (Voice). Individuals who are hearing impaired or have speech disabilities may contact USDA through the Federal Relay Service at (800)-977-8339; or (800)-845-6136 (Spanish). USDA is an equal opportunity provider and employer. 19
