When procuring goods and services for the Child Nutrition Programs, a school food authority must determine whether they must use an informal or formal procurement method. It is important to understand and then identify which method best meets the needs of your individual school food service operation. Informal procurement occurs when a school food authority’s purchases fall at or below the Federal, State, or local small purchase threshold (whichever is more restrictive). The Informal Procurement method is commonly referred to as procurement under the small purchase threshold or simplified acquisitions. Although this method is permitted when the amount of a purchase falls at or below the most restrictive small purchase threshold, a school food authority could choose to use the formal procurement method (see below for more information) rather than the informal procurement method.
The following steps are typically involved in an Informal Procurement:
- Develop specifications in writing;
- Identify sources eligible, able, and willing to provide products;
- Contact at least three sources;
- Evaluate bidders’ response to your written specifications; and
- Determine most responsive and responsible bidder at lowest price.
Formal procurement occurs when a school food authority’s purchases exceed the Federal, State, or local small purchase threshold (whichever is more restrictive). Within Formal Procurement there are two methods available: Competitive Sealed Bidding (commonly referred to as sealed bidding and uses an invitation for bid or IFB) and Competitive Negotiation (which uses a request for proposal or RFP).
The following steps are typically involved in a Formal Procurement:
- Develop solicitation specifications;
- Geographic preference points may be incorporated into scoring criteria for unprocessed local grown or raised agricultural products;
- Publicly announce the solicitation;
- Evaluate bidders using established scoring criteria in solicitation;
- Providers of locally grown or raised unprocessed agricultural products receive extra points in scoring; and
- Determine most responsive and responsible bidder at lowest price
These procurement methods are designed to provide free and open competition and ensure that Federal funds—when used to purchase products or services—result in the best and most responsive product at the lowest possible price.