1. Direct Diversion Processing Procurement of Processed End Products Presented by Randy Jones Contract Specialist Phone: (608) - 267-2277 Email: randall.jones@dpi.wi.gov Fall 2015

2. Who Watched the Required Webcasts Training? WI USDA Food Team Webcasts - –Missed training? Need a refresher? The WI USDA Foods Team now provides training via webcasts. Webcasts allow you to view taped presentations that include PowerPoint slides on the web. Link to webcasts: http://dpi.wi.gov/school- nutrition/training/webcasts#commoditymshttp://dpi.wi.gov/school- nutrition/training/webcasts#commodityms

3. I Want Leave Until I Know…. Use the sticky notes on the table to write down one or two questions you have and want to get answered in this training. Then stick the note on the wall. At the end of the training we will go over any the questions left unanswered.

4. DPI Procurement Website http://dpi.wi.gov/school-nutrition/procurement

5. Procurement Terms: Bids vs. Proposals Term “Bid” is used when only costs will be used as the final determining factor for awarding a contract. –Responsive Bid = Requirements –Responsible Bidder or Offeror = Reliable Lowest bid is awarded the contract. Term “Proposal” is used when other factors aside from costs are used to award a contract. –Responsive Proposal = Requirements –Responsible Proposer or Offeror = Reliable Highest scoring proposal is awarded the contract.

6. What is a Solicitation Document? A solicitation document is a document used to solicit offers from prospective suppliers. Three basic types of solicitations: –You can solicit “bids” –You can solicit “proposals” –You can solicit “information” –Request for information (RFI) –Does not result in an awarded contract The solicitation is used to awarded a “contract” This contract is then used to make a “purchase” The contract governs how the purchase will be completed

7. What is an Awarded Contract? An “awarded contract” is a agreement between two parties to do something. An awarded contracts must be competitively procured. The basic elements of an awarded contract include: –Mutuality of Obligation –Sometimes called “meeting of the minds” which is demonstrated by offer and acceptance. –An offer is when one party (the offeror) proposes some sort of exchange with another party (the buyer). –Acceptance is when the buyer agrees to the terms of the offer. –Definite Terms –This means that the terms of the contract are reasonably certain. –This is because a court must be able to look at the bargain and determine the parties' obligations. –Consideration –This is what the parties agree to exchange. –The consideration in the contract must be something of value, but it need not be a tangible or monetary item. –Consideration can also be an action that one is not legally obligated to take, or refraining from doing something one has the legal right to do. –In addition to these basic elements of a contract, the parties must have capacity to contract and the purpose of the contract must be lawful. Otherwise the contract may not be binding.

8. Procurement Methods (See Handouts: Spreadsheet) Procurement Methods 1)Micro Purchase (less than Micro Purchase Threshold $3,000) 2)Small Purchase (less than Simplified Acquisition Threshold $150,000) 3)Sealed Bids (greater than Simplified Acquisition Threshold $150,000) 4)Competitive Proposals (greater than Simplified Acquisition Threshold $150,000) 5)Noncompetitive Proposal

9. Procurement vs. Purchase (The Procurement Process) “Procurement” is the process used to award a contract which is then used to make a “purchase”. Basic Steps in the Procurement Process –Step 1: Plan the Procurement Based on an Identified Need –Step 2: Develop Solicitation Document (based on need) –Step 3: Determine the Procurement Method (five procurement methods) –Step 4: Solicit bids or proposals (procurement method may limit options) –Step 5: Evaluate Submissions Example: Product Testing? –Taste –Texture –Visual Appeal –Small –Preparation –Cooking –Step 6: Award Contract –Step 7: “Purchase” Goods or Services –Step 8: Manage the Contract

10. Direct vs. Indirect Processing Commercial Distributor for USDA Foods Direct Processing School procures and awards contract to purchase end products directly with the processor. School may need to conduct a second procurement for delivery of end products. Delivery limitations and run requirements. Who are the contracted parties? Who is handling the delivery? What contracts would a school need to procure? Indirect Processing School procures and awards a contract to a prime vendor to purchase commercial and diverted end products. (Prime vendor also handles delivery and storage) School is still required to have a contract with processor. Who are the contracted parties? Who is handling the delivery? What contracts would a school need to procure? Processor School Processor School Prime Vendor Delivery Green lines = Delivery Red lines = Contracted Parties

11. Product List and Substitutions Awarded contracts must contain a list of products with pricing. Some deviation from this list is allowable but adding or subtracting products may result in a material change to the awarded contract. An amendment to the awarded contract is needed for any added or subtracted products --- must include pricing. Awarded contract should address how substitutions will be managed. Reminder: Product Formulation Statement (PFS) or Child Nutrition (CN) Labels as well as Nutrition Facts information for each product being processed. For more information please see DPI’s website, “Child Nutrition (CN) Labels and Product Formulation Statements” (link: http://dpi.wi.gov/school-nutrition/national- school-lunch-program/menu-planning#meal-pattern- tables).http://dpi.wi.gov/school-nutrition/national- school-lunch-program/menu-planning#meal-pattern- tables

12. Future Procurement Review And Other Important Procurement Topics Procurement Procedures 2 CFR §200.318 (a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Contract Management 2 CFR §200.318 (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. Conflict of Interests 2 CFR §200.318 (c) (1) The non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. –N–No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest…. (2) If the non-Federal entity has a parent, affiliate, or subsidiary organization that is not a state, local government, or Indian tribe, the non-Federal entity must also maintain written standards of conduct covering organizational conflicts of interest. –O–Organizational conflicts of interest means that because of relationships with a parent company, affiliate, or subsidiary organization, the non-Federal entity is unable or appears to be unable to be impartial in conducting a procurement action involving a related.

13. What needs to be included in a solicitation document? The nine elements of a solicitation document 1.The Introduction 2.General information 3.Description of the goods or services 4.The minimum qualifications of a supplier 5.Contractual terms and conditions 6.Minimum standards of a submission (bid or proposal) 7.Required elements of a submission (bid or proposal) 8.Submittal requirements 9.Evaluation criteria

14. Required Sections of a Solicitation Contract Type (fixed price or cost reimbursable) Introduction/Scope General Descriptions of Goods and Services –Prime vendor, Milk, Bread, Vended Meals, FSMC, Equipment,or Other Timelines and Procedures Technical Requirements Evaluation Criteria (Points for RFP or Price/cost for Bid)

15. Writing Clear and Thorough Specifications Product Name (all products) Variety Grade Size Quantity Quality Cleanliness Value Pass Through Method Allowability of Substitution Packaging Delivery Food Safety If applicable, Farm Practices and Characteristics Other requirements based on product or service

16. The Anatomy of an Solicitation Document Cover Page Summary Issued by… Outline (Important Dates) Possible Sections Introduction and Background Scope of Services Calendar of Events Submittal Deadline and timeline Proposal or Bid Content and Format Specifications Evaluation Criteria Taste Testing Selection Process Protest Procedures Contract Requirements Forms required at submission Attachments Pricing or Costs

17. Break-Up into Groups Review RFPs and Bids Use Handout to Review Solicitation Documents

18. Discussion Questions What is something you liked in the solicitation documents? What is something you would do differently in the solicitation document and why? Any other takeaways? What else would you like to have learned? (planning for future training events)

19. Any Questions?

20. Thank you!!! My Contact Information: Randy Jones School Nutrition Team Contract Specialist/Procurement Department of Public Instruction E-Mail: randall.jones@dpi.wi.gov Phone: 608-267-2277

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