BUYING GOODS AND SERVICES SUMMER FOOD SERVICE PROGRAM PARTICIPANT GUIDE Class Purpose This class aims to give Summer Food Service Program (SFSP) participants a general overview of federal procurement requirements, and Contracting Entity (CE) responsibilities for complying with regulations. Texas Department of Agriculture 02-03-2016 1
Table of Contents Class Overview...3 Module 1: Background... 7 Module 2: Phases of Procurement Process... 11 Module 3: Procurement Methods... 13 Module 4: Record Keeping... 17 Module 5: Summary... 19 Texas Department of Agriculture 05-28-2015 2
CLASS OVERVIEW Modules Module 1: Background Module 2: Phases of the Procurement Process Module 3: Procurement Methods Module 4: Record Keeping Class Description This class aims to give Summer Food Service Program (SFSP) participants a general overview of federal procurement requirements, and Contracting Entity (CE) responsibilities for complying with regulations. Acknowledgment Statement Module 5: Summary Total Class Time 1.0 hr You understand and acknowledge that the training you are about to take does not cover the entire scope of the program; and that you are responsible for knowing and understanding all handbooks, manuals, alerts, notices and guidance, as well as any other forms of communication that provide further guidance, clarification or instruction on operating the program. Texas Department of Agriculture 05-28-2015 3
Icon Icons Resources Discussion Icons will be used throughout the presentation to guide participants through the lesson. All icons will be placed in the left margin. Text scripts associated with each icon will be included to the immediate right of the image. Individual Activity Group Activity Reminder Tip Texas Department of Agriculture 02-03-2016 4
Texas Department of Agriculture 02-03-2016 5
SFSP PROCUREMENT RESOURCES There are several resources available to help you learn more about procurement. www.summerfood.org (Summer Feeding Policy & Handbooks) Links to USDA s Administrative Guidance for Sponsors and USDA Policy memos www.theicn.org (Institute of Child Nutrition) Online courses Procurement in the 21 ST Century ACRONYMS Acronym SFSP CE FSMC IFB OMB RFP TDA USDA Term Summer Food Service Program Contracting Entity Food Service Management Company Invitation for Bid Office of Management and Budget Request for Proposal Texas Department of Agriculture United States Department of Agriculture OBJECTIVES By the end of the training you should be able to list the components of good procurement; locate where procurement regulations are found; list and explain the phases of the procurement process; and identify the five procurement methods and explain when each is used. Texas Department of Agriculture 02-03-2016 6
MODULE 1: BACKGROUND PRE-TEST Let s begin by taking a brief pre-test to see what you already know about procurement. Answer each question below on your own and we will review the correct answers. 1. What determines when to use informal or formal procurement procedures? a. The size of my SFSP site. b. The items I m procuring. c. The aggregate cost of the goods or services I m procuring. d. All of the above. 2. What are allowable processes for purchases above the simplified acquisition threshold? a. Micro-purchases b. Competitive Sealed Bidding (IFB) c. Small purchase procedures d. Competitive Proposals (RFP) e. Both b and d 3. CEs must establish and maintain a written code of conduct to govern the performance of employees engaged in procurement. a. True b. False 4. The last step in the procurement process is awarding the contract. a. True b. False Texas Department of Agriculture 02-03-2016 7
PROCUREMENT Procurement- is a multi-step process for obtaining goods, products, and/or services in exchange for money or value. WHY PROCURE? 1. Accountability to taxpayers 2. Higher quality goods and services for a lower price COMPONENTS OF GOOD PROCUREMENT Texas Department of Agriculture 02-03-2016 8
CODE OF CONDUCT CEs must establish and maintain procurement procedures which includes a written code of conduct to govern the performance of employees engaged in procurement. This written code must: Prohibit employees from soliciting gifts, travel packages, and other incentives from prospective contractors. Prohibit an employee from participating in the selection, award, and administration of any contract to which an entity or certain persons connected to them, have financial interest. Set standards when financial interest is not substantial or the gift is an unsolicited item of nominal value, and therefore may be acceptable. Provide for disciplinary actions to be taken in the event there is a violation. PROCUREMENT REGULATIONS Super-Circular 2 CFR 200 Summer Food Service Program 7 CFR 225 Texas Department of Agriculture 02-03-2016 9
Texas Department of Agriculture 02-03-2016 10
MODULE 2: PHASES OF PROCUREMENT PROCESS PHASES OF PROCUREMENT PROCESS The procurement process can be broken down into four distinct phases Planning, Solicting, Awarding, and Managing. 1. PLANNING- Planning the procurement includes determining the proper procurement method based on the CEs written procedures and will require a CE to forecast what needs to be solicited. The planning process allows CEs to evaluate their resources, project their expenses and determine the appropriate procurement method to be used. 2. SOLICITING- An effective solicitation will Include due dates timeline for start/finish of contract provide detailed specifications use appropriate procurement method clearly describe deliverables. clearly describe how to submit clearly describe how the contract will be awarded including: o Rubric o How CE will share Q&A o How notice will be given Note: CEs should not allow contractors who may potentially bid on a contract to write or provide specifications for the solicitiaon. Contractors who engage in writing or providing specifications become ineligible to bid. 3. AWARDING- Two important elements of the award phase include the selection of responsive and responsible contractors; and pre-award reviews, if applicable. TDA pre-award reviews occur when: The procurement is deemed sole source Any FSMC bids totaling $150,000 or more must be submitted to TDA for approval before the sponsor can accept a bid. Any FSMC bid (regardless of dollar amount) that exceeds the lowest bid must be submitted to TDA for approval before acceptance, with an explanation of why that particular bid was chosen. Texas Department of Agriculture 02-03-2016 11
4. MANAGING- Managing the contract or contract administration refers to all the steps taken after a contract has been awarded to make sure that the contractor lives up to its end of the bargain. PROCUREMENT PLAN A CE should have a written procurement plan that identifies each action that must be taken in a proposed procurement. The procurement plan should include information from each of the phases of the procurement process that we just identified. The written plan should address: Forecasting and scheduling of purchases Most appropriate and efficient procurement methods for each procurement Criteria for evaluating bids, proposals, or quotes Methods for awarding and monitoring the contract Protest procedures to handle and resolve disputes relating to procurements Code of conduct Texas Department of Agriculture 02-03-2016 12
MODULE 3: PROCUREMENT METHODS PROCUREMENT METHODS WHEN TO USE FORMAL OR INFORMAL PROCUREMENT METHODS Texas Department of Agriculture 02-03-2016 13
Aggregate Purchase Amount - Note: for the purpose of procurement the term aggregate is the total amount of a single invoice for a single purchase of product(s) and/or service(s) whether that purchase(s) occurs weekly, monthly, or annually. MICRO-PURCHASES Federal regulations in the new Super-Circular have created a micro-purchase threshold. As defined in 2 CFR Part 200.67, procurement by micro-purchases is the acquisition of supplies or services in which the aggregate dollar amount does not exceed $3500. To the extent practicable, micro-purchases must be distributed equitably among qualified suppliers and may be awarded without soliciting competitive price quotes as long as the price is considered reasonable by the CE doing the purchase. CEs must document in their procedures demonstrating how they will share the wealth among qualified suppliers. While no competitive price quotation is necessary for the purchase, CEs must have a method to document that the cost of the products and/or services is reasonable. A CE s written procurement procedures, as required in 2 CFR Part 200.318(a), must include a procedure that such purchases must be rotated among qualified suppliers.note: Any costs incurred as a result of the CE intentionally breaking larger purchases into smaller amounts to qualify under the micro-purchase threshold are unallowable costs. SMALL PURCHASE PROCEDURES Small purchase procedures are relatively simple and informal methods for securing services, supplies, or other property that are less than or equal to the simplified acquisition threshold ($50,000 for TDA). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources prior to purchasing from one of them. The CE must document the date, vendors consulted, and quotes received (including for verbal quotes). Store advertisements may be considered as documentation. CEs must maintain documentation that details the history of the procurement process. Product specifications, bid prices quoted, and to whom the purchase was awarded should be maintained in the CE s records. The following small purchase request template and checklist are examples of tools that can help a CE document the details of a small purchase procedure. Texas Department of Agriculture 02-03-2016 14
COMPETITIVE SEALED BIDDING (Invitation for Bid or IFB) Competitive sealed bidding is a procurement method where bids are publicly solicited through media outlets with wide circulation, and a fixed-price contract is awarded to the lowest responsive and responsible bidder whose bid: conforms to all the material terms and conditions of the Invitation for Bid (IFB), the solicitation document used for competitive sealed bidding; and is the lowest in price. COMPETITIVE PROPOSALS (Request for Proposal or RFP) Competitive proposals are used when the basis for the contract award is not solely dependent upon the lowest cost because other technical factors must be considered. Below are the steps in the competitive proposals process. RFP The CE develops an RFP which identifies the goods or services needed, and all significant evaluation factors. The RFP is publicized and is used to solicit proposals from a number of sources. Proposal Vendors will submit their offer in the form of a proposal. Vendor Selection The CE will evaluate the proposals and conduct negotiations with the top respondents. Contract Awarded to the responsive and responsible bidder whose proposal is most advantageous to the program, with price and other factors considered. Price must be the primary consideration when awarding a contract under this competitive procurement method. Texas Department of Agriculture 02-03-2016 15
NONCOMPETITIVE PROPOSALS The use of non competitive proposals must be approved by TDA and may be used only when one of the following applies: Texas Department of Agriculture 02-03-2016 16
MODULE 4: RECORD KEEPING RECORD RETENTION Procurement documentation and contract records are subject to the same record keeping requirements as all other SFSP related records. The three-year record retention period does not begin until the final contract renewal period has expired and/or the final payment is recorded, whichever occurs last. Bid protests, litigation, or audits may extend the three-year retention period. Note: You should follow more restrictive record keeping requirements of your administering agency. EXAMPLES OF PROCUREMENT RECORDS Some examples of procurement records that CEs should be keeping include: A written rationale for the method of procurement. A copy of the Request for Proposal or the Invitation for Bid. The selection of contract type (fixed price or cost reimbursable). The bidding and negotiation history. The basis for contractor selection. Approval from TDA to support a lack of competition when competitive bids or offers are not obtained. The basis for award cost or price. Documentation for micro-purchases and small purchases The terms and conditions of the contract. Any changes to the contract and negotiation history. Billing and payment records. A history of any contractor claims. A history of any contractor breaches Texas Department of Agriculture 02-03-2016 17
Texas Department of Agriculture 02-03-2016 18
MODULE 5: SUMMARY SUMMARY Purchase Decision Chart CE Conducts Cost Analysis to Determine the Estimated Total Cost of the Products and/or Services Equal to or Less Than ($0.01 to $50,000) Simplified Acquisition Threshold $50,000* Greater Than > ($50,001 or more) (may choose) 1 Informal Procurement Methods (must choose) Formal Procurement Methods Micro- Purchase Small Purchase Sealed Bid Invitation for Bid (IFB) Competitive Proposal Request for Proposal (RFP) * $50,000 is the TDA threshold. CEs should apply the appropriate threshold based on the entity type as described in the Most Restrictive Simplified Acquisition Threshold subsection in this section. You understand and acknowledge that: the training you have completed does not cover the entire scope of the program; and that you are responsible for knowing and understanding all handbooks, manuals, alerts, notices and guidance, as well as any other forms of communication that provide further guidance, clarification or instruction on operating the program. 1 CE may choose to use a formal procurement procedure for a total cost that is equal to or less than the simplified acquisition threshold in order to get a better price. Texas Department of Agriculture 02-03-2016 19
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. Texas Department of Agriculture 02-03-2016 20