Great Lakes Farm to School Summit Procurement presentation 10 2813

Procuring Local Foodsfor Child Nutrition Programs

United States Department of Agriculture

Food and Nutrition Service

Christina Conell and

Sadie Mele

Great Lakes Region

Leadership Summit

October 28, 2013

Sadie Mele, Program Specialist, Mountain Plains Regional Office

Christina Conell, Program Analyst

Overview

» Procurement principles and regulations

» Procurement methods

» Sourcing locally, and correctly!

» The Geographic Preference option

» Incorporating local foods into school

meals: an example

» Resources

» Questions

Procurement

principles and

regulations

What is procurement?

Procurement is the purchasing of goods and services. The procurement process involves:

PlanningDrafting

Specifications

Advertising the

Procurement

Awarding a Contract

Managing the Contract

ProcurementPrinciples

4 Key Concepts

1. Competition

2. Responsive and Responsible

3. American Grown

4. Know Your Federal, State and Local

Regulations

1) Competition

»Competition is essential to

ensure low cost and good

quality of goods and services.

1) Competition Killers

Do not…» Place unreasonable requirements on

firms;» Require unnecessary experience and

excessive bonding;» Give noncompetitive awards to

consultants;» Have organizational conflicts of interest;» Specify only brand name products; or,» Make arbitrary decisions in the

procurement process.

2) 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

3) The Buy American provision

» The National School

Lunch Act requires SFAs

to purchase

domestically grown and

processed foods to the

maximum extent

practicable.

4) Procurement rules

» Be familiar with all procurement

requirements, at the federal, state and

local levels

» SFA is responsible for complying with all

levels of regulations.

» In some cases, state and federal regulations may be

in conflict with each other.

Procurement

methods

Procurement methods

InformalSmall Purchase

(Requires price quotes from at least 3 bidders)

FormalSealed Bids (IFBs)

& Competitive Proposals (RFPs)

(Requires public advertising)

≤ $150,000 > (Small Purchase Threshold)

The formal procurement process

Develop solicitation.

Publicly announce the IFB/RFP.

Evaluate bidders using established

criteria.

Award the contract to the most

responsive and responsible bidder

at lowest price.

Manage the contract.

Competitive sealed bidding

» Procurement by competitive sealed

bidding is done by issuing an invitation for

bid (IFB).

» Use it when:

» A complete, adequate, and realistic specification is

available.

» The contract can be awarded on the basis of price.

Competitive proposals

» Procurement by competitive proposal is

done by issuing a request for proposal

(RFP).

» Use it when:

» Conditions aren’t appropriate for a sealed bid.

» Price won’t necessarily be the sole basis for the

award.

The informal procurement process

Develop your specs in writing

Identify and notify at least 3 sources eligible, able, and willing to provide

products.

Evaluate bidders’ responses to your specs.

Determine most responsive and

responsible bidder at lowest price and

award contract.

Manage the contract.

Small purchase procedure

» Use it when:

» The estimated amount of your purchase

falls below your small purchase

threshold.

Bid documentation

Vendor Art’s Apples Olivia’s Orchard Apple Crunch Inc.

Price/box $40 $47 $37

» Written specification » Granny Smith, US. No. 1, 5 185 count boxes

per week for September-December

» Bid documentation» Write down each vendor’s bid and constraints

» Ex. Fresh whole Granny Smith apples

Managing contracts

»Are you receiving the product

you contracted for?

»Is the product of good quality?

»Is the vendor delivering on

time?

Sourcing locally, and correctly!

Buying Local

1. WHAT: Which types of products?

2. WHERE: From which types of sources?

3. HOW: The mechanics of sourcing local

correctly.

1) Local WHAT?

Vegetables Meat, Poultry

and Fish Beans,

Grains, and

Flour

DairyFruits

Eggs

1) WHAT: Defining local

Ways to define local: » Miles

» County

» State

» Region

» Product-specific

2) 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

3) HOW: Sourcing locally, and correctly!

» Using geographic preference;

» Picking the low hanging fruit;

» Including related characteristics in specifications;

» Approaching only local sources under an informal

procurement;

» Including a desire for local items in distributor or

FSMC solicitations;

» Choosing local foods in the DoD Fresh catalog,

» Using USDA Foods to augment your local purchases;

and,

» Forward contracting.

» Some local products, because of their

nature, are likely to be cheaper than

non-local competitors.

» Ask your providers where your food is

coming from—you might be

surprised!

Procure the easy ones first

Use Specifications

You can include specifications such as

“harvested within 48 hours of delivery” that

will increase the chances that a local vendor

will win the contract.

Other potential specifications

» When purchasing local foods, consider

specifying:

» Degree of ripeness or maturity

» Freshness (age)

» Condition upon receipt of product

» Temperature

» Size uniformity

» Other quality standards (such as “organic,” “no-till,”

“no-spray,” etc.)

Example: San Diego Unified

Foods must be: » Grown on farms that are less than 50 acres in size and grow

more than five food crops at one time;» Grown on farms that utilize a majority of hand

harvesting, hand packing or human labor power in growing, harvesting. and packing of food;

» Delivered within 24 to 48 hours of harvest; » Delivered directly to multiple SDUSD school sites (not a

central warehouse). The number of drops is to be determined by the district on a case-by-case basis;

» Produce should be generally free from insect damage and decay; and,

» Product must be rinsed, cleaned and packed in appropriate commercial produce packaging, such as waxed cardboard boxes. Standard industry pack (case counts) is required and/or half packs are allowable when it comes to bundled greens.

Approach only local vendors

» For purchases under your small purchase

threshold, you can get quotes from 3 (or

more) local farms or vendors.

» But remember:

» You need written specifications.

» Bid documentation

Write Your Specifications

» Tomatoes – Tulsa, OK» Hydroponic

» Available 10 months of the year

» US No. 1, fully ripe, red color-stage 5-6

» 10 day shelf life

» Organic

» Delivered to 18 schools 2 days prior to service

» Proof of liability insurance due with bid

» GAP certified

» 36 cases per week

Document the bids you receive

Vendor Tom’s Toms Vickie’s Vines Fresh Network

Date received July 1 July 6 July 10

Responsive and Responsible

Yes Yes No, can only deliver 5 months of year

Price/lb $2.20 $2.05 $2.75

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.

Writing local into your distributor solicitation

» Distributors are vital!

» One-stop shop

» Delivery

» Most hold liability insurance

» To purchase local through a distributor:

» Include this desire in your solicitation

» Ask if any of products currently on your

contracted list are sourced local

Distributor solicitation - Example

» Knox County Schools - Knoxville, TN

» Springfield District - Eugene, OR

Writing local into your FSMC solicitation

» Food Service Management Company

Contract

» Must specify what types of local products and when

you would like them in the solicitation and contract.

» Cost reimbursable and fixed price contracts

» Cost reimbursable contracts require that FSMC follow

procurement regulations.

» Fixed price contracts are more flexible for the

recipient, but may be more difficult for the vendor to

manage.

FSMC solicitation - Example

» Rochester County Schools, New Hampshire

» Connecting the dots to get local products

» South Bay Area, California

» Sodexo works with Fresh Point-San Francisco and

CAFF identifies producers within 125 miles

Locally produced USDA Foods

» 100% American grown

» Every product is local to someone!

» Be aware of what is produced in your

region and order those products

» Explore state processors

Working with DoD Fresh

» DoD Fresh offers an opportunity to use

USDA Foods entitlement dollars on

fresh produce

» DoD contracts with produce vendors across

the country

» Many vendors purchase regionally grown

produce

FFAVORS

Working with DoD Fresh - Example

» North Carolina» NC Dept. of Agriculture fosters relationships with growers

and DoD vendor.

» State even facilitates transportation from farm to DoD

vendor facility

» Connecticut» Holds an annual Know Your Farmer Meeting to facilitate

producer relationships with the DoD Vendor

» Texas» Texas Farm to School is DoD Fresh

Using a forward contract

» Purchasing product before harvest

» Provides producer with a guarantee

» Ensures the farmer will plant and pack the supply needed

» Understand the risk

» What happens if the crop fails?

» Must follow competitive procurement process

Using a forward contract - Example

» North Carolina

» Issues a solicitation for different products

every quarter.

» Not too far in advance, which allows for a

steady price and more predictable quantity.

» Enables districts to have a steady supply and

guarantees a market for growers.

Donated Foods

» Procurement regulations do not

apply to donated foods

» Consider food safety issues and

menus before accepting foods

» Document receipt of goods

Choosing a source and a mechanism

» You can target multiple sources with the

same mechanism.

» Several of the mechanisms can be used in

combination.

The Geographic

Preference

option

The Geographic Preference option

» Authorized by Section 4302 of

Public Law 110-246, the

Food, Conservation, and Energy

Act of 2008 (AKA the 2008 Farm

Bill)

» Final Rule published in April, 2011

Bringing local into the cafeteria

» Geographic

preference can be

applied to most

school food

purchases for

unprocessed

agricultural

products.

USDA Foods

Cash Assistance

DOD Fresh

Who and how to define local?

» School Food Authority defines local

» Local can be defined by:

» Region

» State

» Mileage

» Different definitions for different products

What is “unprocessed”?

» Cooling, refrigerating, and freezing

» Peeling, slicing, dicing, cu

tting, chopping, shucking,and grinding

» Forming ground products into patties

» Drying and dehydrating

» Washing, packaging, vacuum packing, and bagging

» Adding preservatives to

prevent oxidation

» Butchering livestock or

poultry

» Pasteurizing milk

“Unprocessed” agricultural products retain their inherent character. These are the allowed food handling and preservation techniques:

How to incorporate a geographic preference

» Define local.

» Decide how much “preference” local

products will receive.

» Determine what type of procurement

method to use.

» Be sure your solicitation makes perfectly

clear how the preference will be applied.

Example 1: 1 Penny = 1 Point

Owen’s

Orchard

Apple Lane

Farms

Bob’s Best

Price $1.97 $2.05 $2.03

Meetsgeographic preference?

No Yes (10 points) No

Price with preference points

$1.97 $1.95 $2.03

Example 2

Produce

Express

Ray’s

Produce

F&V

Distribution

Contract Price $32,000 $35,000 $34,000

% F&V Able to Provide From Within the State

20 80 50

Geographic Preference Points to Respondent able to meet >60% Local Items

No Yes (10% pref.)

No

Price for comparison $32,000 $31,500 $34,000

10% price preference will be awarded to any bidder that can source at least 60% of the products from within the state.

Geo. pref. sliding scale

» 10 preference points will be awarded to

vendors able to provide over 70% local, 7

points for 50-69% and 5 points for 25-49%.

Sliding scale of percentage

local

Preference

points

70% and more local products 10

50-69% local products 7

25-49% local products 4

Laurie’s

Legumes

Paula’s Pulses Gary’s Grains

Price = 40 30 35 40

Contractor ability to perform all

specifications

Product quality = 15

Delivery = 10

Packaging and Labeling = 5

25 30 30

Three references, past history = 10 10 10 10

Able to provide farm/facility tour

or classroom visits = 5

0 5 5

Able to provide state of origin on

all products = 5

0 5 5

Ability to provide sourced within

the state products = 10

0 10 7

100 possible points 65 95 97

Example 3: Geo. Pref. in an RFP

Incorporating local foods into school meals: an example

Monday Tuesday Wednesday Thursday Friday

Submarine Sandwichon Whole Wheat Roll

Refried Beans

Jicama

Green Pepper Strips

Cantaloupe wedges

Skim Milk

Whole Wheat Spaghetti with Meat Sauce

Whole Wheat Roll

Green Beans

Broccoli &Cauliflower

Kiwi Halves

Low-fat Milk

Chef Salad

Whole Wheat Soft Pretzel

Corn

Baby Carrots

Banana

Skim Milk

Oven-Baked Fish nuggets

Whole Wheat Roll

Mashed Potatoes

Steamed Broccoli

Canned Peaches

Skim Milk

Whole Wheat Cheese Pizza

Baked Sweet Potato Fries

Grape tomatoes

Applesauce

Low-fat Milk

Evolution of a local menu



Refried Beans

Jicama

Green Pepper Strips

Cantaloupe wedges

Skim Milk


Whole Wheat Roll

Green Beans


Kiwi Halves

Low-fat Milk

Chef Salad


Corn

Baby Carrots

Banana

Skim Milk


Whole Wheat Roll

Mashed Potatoes

Steamed Broccoli

Canned Peaches

Skim Milk



Grape tomatoes

Strawberries

Low-fat Milk

Harvest of the month: Strawberriesfrom Seascape Farm.




Refried Beans

Jicama

Green Pepper Strips

Cantaloupe wedges

Skim Milk


Whole Wheat Roll

Green Beans


Kiwi Halves

Low-fat Milk

Chef Salad


Corn

Baby Carrots

Banana

Skim Milk


Whole Wheat Roll

Mashed Potatoes

Steamed Broccoli

Canned Peaches

Skim Milk



Grape tomatoes

Strawberries

Low-fat Milk




Refried Beans

Jicama

Green Pepper Strips

Cantaloupe wedges

Skim Milk


Whole Wheat Roll

Green Beans


Kiwi Halves

Low-fat Milk

Chef Salad


Corn

Carrots

Banana

Skim Milk


Whole Wheat Roll

Mashed Potatoes

Steamed Broccoli

Canned Peaches

Skim Milk



Grape tomatoes

Strawberries

Low-fat Milk




Refried Beans

Jicama

Green Pepper Strips

Cantaloupe wedges

Skim Milk


Whole Wheat Roll

Green Beans


Kiwi Halves

Low-fat Milk

Chef Salad


Corn

Carrots

Banana

Skim Milk


Whole Wheat Roll

Mashed Potatoes

Steamed Broccoli

Canned Peaches

Skim Milk



Grape tomatoes

Strawberries

Low-fat Milk



Submarine Sandwichon Whole Grain Roll

Refried Beans

Jicama

Green Pepper Strips

Cantaloupe wedges

Skim Milk


Whole Wheat Roll

Green Beans


Kiwi Halves

Low-fat Milk

Chef Salad


Corn

Carrots

Banana

Skim Milk


Whole Grain Roll

Mashed Potatoes

Steamed Broccoli

Canned Peaches

Skim Milk



Grape tomatoes

Strawberries

Low-fat Milk



Submarine Sandwichon Whole Grain Roll

Refried Beans

Jicama

Fresh Peas

Cantaloupe wedges

Skim Milk


Whole Wheat Roll

Green Beans


Kiwi Halves

Low-fat Milk

Chef Salad


Corn

Carrots

Banana

Skim Milk


Whole Grain Roll

Mashed Potatoes

Steamed Broccoli

Canned Pears

Skim Milk



Grape tomatoes

Strawberries

Low-fat Milk



Local Lentil PattyWhole Grain Roll

Refried Beans

Jicama

Fresh Peas

Cantaloupe wedges

Skim Milk


Whole Wheat Roll

Green Beans


Kiwi Halves

Low-fat Milk

Chef Salad

Local SpanishRice with corn

Carrots

Banana

Skim Milk

Oven-Baked Local Fish Sandwich on a Whole Grain Roll

Mashed Potatoes

Steamed Broccoli

Canned Pears

Skim Milk



Grape tomatoes

Strawberries

Low-fat Milk


Farm to school resources

Resources

» Geographic Preference Q&As

» Federal procurement regulations

» State and local procurement rules and

guidance

» Washington State Department of

Agriculture Guide

» National Food Service Management

Institute Online Training

Fact Sheets

FNS staff are here to help!

WRO

SWRO

MPROMWRO

SERO

MARO

NERO

National Office

Thank you! Questions?

Christina [email protected]

Sadie [email protected]

mailto:[email protected]

mailto:[email protected]

Business

Great Lakes Farm to School Summit Procurement presentation 10 2813