Formal procurement is designed to provide free and open competition and ensure that Federal funds, when used to purchase products/services, results in the best and most responsive product at the lowest possible price. Formal procurement must be done when purchases that are equal to or greater than the Federal and State small purchase threshold, which is currently at $150,000. If your SFA’s small purchase threshold is less than $150,000, your SFA should use its more restrictive small purchase threshold instead. However, SFA’s may choose to use the formal procurement method even if a purchase does not exceed the small purchase threshold. An SFA may choose to do this is they have determined that the formal procurement method will result in a better use of nonprofit food service account funds. Within formal procurement there are two formal procurement types available: Competitive Sealed Bidding (commonly referred to as sealed bidding which uses an Invitation For Bid or IFB) and Competitive Proposals (which uses a Request For Proposal or RFP).
A publicly advertised solicitation for a product or service needed by the SFA. The primary consideration is cost, and the expectation is that the bids will be received and awarded to the most responsive and responsible bidder with the lowest price. An IFB is a formal method of procurement that must be solicited from an adequate number of vendors, all bids must be sealed, the SFA must have a set date to open the bids, and provide bidders with enough time to respond prior to the set date. IFB’s result in a fixed price contract.
IFB Example:
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NOTICE OF INVITATION FOR BID (IFB)
___________________ (school name) invites bidders to submit bids to furnish the following: ____________________________ (what is being procured). Contract will be _________________ (contract beginning date) through _________________ (contract ending date) with the option to renew for up to 4 one year terms. The estimated dollar value of awarded contract is $_________________ annually. This will include delivery to __________ (number of schools or school address).
Bids must be received by the Food Service Director of ___________________ (school name), at ___________________ (address) up until __:___ P.M. CST, bid close date: _________________ (bid close date), at which time and place bids received will be logged for evaluation. Late bids will not be accepted.
Requesting a Copy of IFB; only those organizations who request a copy of the IFB will receive a copy of the IFB. To obtain a copy of the IFB in person or by mail use the following address ___________________ (address), requesting a copy by email, send email to _____________________ (email address).
Required Attendance at Pre-Bid Meeting; organizations who intend to submit bids are required to attend the pre-bid meeting on _________________ (pre-bid meeting date), at __:___ P.M. CST, at the following location: ___________________ (address of pre-bid meeting). Only those organizations that have submitted a responsive bid and attended the required pre-bid meeting will be considered in the evaluation of bids.
Questions; contact ___________________ (school contact person) by phone ______________ (phone number), or email to _____________________ (email address).
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A typed of solicitation document that identifies the goods or services needed and explains the significant evaluation factors. The RFP is publicized and used to solicit proposals from a number of sources. Potential vendors then submit proposals on specified items or services.
A contract used in formal procurement where the price is fixed at the start of the contract and is guaranteed for a specific period of time.
A contract that requires the vendor to be reimbursed for costs incurred under the contract with or without a fixed fee.
Private organizations that purchase goods and services on behalf of members/SFAs.
A commercial facility that accepts and processes USDA foods for the SFA. The USDA foods processing program allows schools to contract with commercial food processors to convert raw bulk USDA foods into more convenient, ready to use products.