Three Bids and a Buy Presented by - PowerPoint Presentation

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Three Bids and a Buy

Presented by

Randy Jones

Department of Public Instruction

PROCUREMENT

First Bid

Third

Bid

Second

BidSlide2

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. Slide3

Procurement a Multi-Step Process

This flowchart provides a visual of the multi-step procurement processSlide4

Three Bids and a BuySlide5

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 requirementsStep 3 - Starting the bid processContact 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 responsesWrite down vendor name, contact method, who provided the price quote, price quoted, date the price was quoted, and duration of price quoteObtain 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 honoredStep 6 - Close out the contract and keep all records for at least 3 years. Slide6

Three Bids and a Buy

TemplateSlide7

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 requirementNo closed bid requirementNo public opening requirement3 bids and a Buy is always based on price!Requires less time to prepare and complete the procurement processSlide8

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 suppliersThis saves time when soliciting bidsSlide9

Steps One, Two, and Three

Planning, Specifications, and Documentation

Step 1 – Prepare and planning your bid:

Write down the product specifications in a purchase logStep 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 receivedSlide10

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. 10Slide11

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 basisSign off on purchases only after they have been fully inspectedProduct not matching specifications provided in bid should be returned or exchanged.Note returns or exchanges for future vendor evaluationAudit invoices and confirm that prices match what was quoted during the purchasing process. Variances should be correctedNote variances for future vendor evaluationSlide12

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.

Required equipment:

Example of Small Purchase Method

Broccoli 2 bags Tomatoes (6x5) 3 cs. Spinach # 3 bags Carrots # 4 cs. Lettuce cs. 5 cs. Peppers 2 lbs. Pears (120) 10 cs.

Cauliflower 10 Pears (Wisconsin variety) 1 cs.

Apples (Wisconsin variety) 1 cs. Slide13

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

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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…)Slide15

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…)Slide16

Example of Small Purchase Method

(Continued…)Slide17

Quiz

Why was M&M Produced selected for the purchase?

They had the lowest bid.

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.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. Slide18

QUESTIONS?

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If you have questions contact me with by phone or email:

Randy JonesSchool Nutrition TeamContract Specialist/ProcurementDepartment of Public InstructionE-Mail: randall.jones@dpi.wi.gov

Phone: 608-267-2277Slide19

Thank You!

Randy Jones

School Nutrition Team

Contract Specialist/ProcurementDepartment of Public InstructionE-Mail: randall.jones@dpi.wi.govPhone: 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.

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