2014 Training

1. 2014 Training Procurement in the CACFP

2. www.doe.in.gov/cacfp

3. Independent Center • Independent center means a child care center, at-risk afterschool care center, emergency shelter, outside-school-hours care center or adult day care center which enters into an agreement with the State agency to assume final administrative and financial responsibility for Program operations.

4. Sponsor of Affiliated Centers • Sponsoring Organization of Affiliated Centers means a public, private for-profit, or private non-profit organization that is entirely responsible for the administration of the food program in: • Two or more care centers, outside-school-hours care centers, or adult day care centers; and • They are part of the same legal entity as the sponsoring organization.

5. Sponsor of Family Day Care Homes • Sponsoring organization of family day care homes means a public or nonprofit private organization that is entirely responsible for the administration of the food program in one or more day care homes.

6. Sponsor of Unaffiliated Centers • Sponsoring Organization of Unaffiliated Centers means a public or nonprofit private organization that is entirely responsible for the administration of the food program in: • A child care center, emergency shelter, at-risk afterschool care center, outside-school-hours care or adult day care center which is a legally distinct entity from the sponsoring organization.

7. What is Procurement? • Procurement is simply the purchasing of goods & services.

8. What is a Vendor? • Consumer Club: Sam’s Club, Costco • Commercial Food Service Company: GFS, Sysco, etc. • Catering Company • Fresh Food Market • Local Butcher Shop • Food Service Management Company

9. Disclosure • This is the act of identifying related party transactions. • Institutions are required to mark and describe the disclosure on the documentation form. • Required when using Program funds.

10. Who must follow procurement rules? • All Institutions must comply with the procurement rules. • An institution is any organization that has an agreement with the Indiana Department of Education to operate one of the Child Nutrition Programs. • Facilities can be DCHs, affiliated centers, or unaffiliated centers that have an agreement with a sponsoring organization (an institution). • Facilities are not required by regulation or policy to conduct procurements that uphold free and open competition; i.e., they are free to purchase food and other items according to their own practices.

11. Why is Procurement necessary? • Institutions agree to follow Federal Regulations when they receive money from CACFP. • Federal procurement regulations for private non profit institutions, for-profit institutions and public institutions. • Must be able to demonstrate free and open competition • Does not apply to facilities—but they should be encouraged to do so

12. Where to find procurement rules • Federal Cost Principles • 2 CFR 225 (States, Local, & Indian Tribal Governments) • 2 CFR 230 (Non-Profit Organizations) • Uniform Administrative Requirements for Procurement • 7 CFR 3016.36 (State & Local Governments) • 7 CFR 3019.44 (Non-Profit Organizations) • Program Regulations for Procurement • 7 CFR 226.22 (CACFP) • 7 CFR 225.17 (SFSP)

13. §226.22 Procurement Standards (a) This section establishes standards and guidelines for the procurement of foods, supplies, equipment, and other goods and services. These standards are furnished to ensure that such materials and services are obtained efficiently and economically and in compliance with the provisions of applicable Federal law and Executive orders.

14. Why is Procurement Important? • Many stakeholders are interested when Federal funds are used • Funds are used effectively and efficiently, no waste or abuse • Procurement is about establishing a sound competitive process that uses free and open competition • Procurement cannot duly restrict or eliminate competition

15. Procurement < $150,000> (Small Purchase Threshold) Informal Small Purchase (required bids from 3 sources) Formal Sealed Bids (IFBs) & Competitive Proposals (RFPS) (requires public advertising)

16. The Informal Procurement Process 1 5 2 4 3

17. The Informal Procurement Process 1 • Develop Specifications • What is the product or service? • Describe it with detail, for example, milk in gallons or ½ pints; 1% or skim milk? • How often do you need delivery 5 2 4 3

18. The Informal Procurement Process 1 • 2. Getting Bids • Identify at least 3 sources • Eligible, able & willing • Share same specifications with each vendor 5 2 4 3

19. The Informal Procurement Process 1 • 3. Document & Evaluate Bids • Share same specifications with each vendor • Document responses 5 2 4 3

20. The Informal Procurement Process 1 • 4. Determine the best bidder • Who is the most responsive? • Who is the most responsible?. • Who is willing to give the best quality at the best price? 5 2 4 3

21. The Informal Procurement Process 1 • 5. Manage the contract • Is the institution receiving the product they contracted for? • Is the product of good quality? • Is the vendor delivering on time? 5 2 4 3

22. Bid Documentation

23. Procurement: Proper or Not? NOT PROPER PROPER

24. Procurement: Proper or Not? An independent center staff member needs to buy milk for this week’s meals and looks at three ads in the paper, documents their specifications and ad prices, and determines the cheapest milk in the area.

25. Procurement: Proper or Not? A day care home provider needs to buy milk for this week’s meals and stops by a farmers’ market on the way home.

26. Procurement: Proper or Not? A sponsoring organization writes specs for fresh carrots but when calling around, the third bidder says it can give them half off frozen carrots. The sponsoring organization buys the frozen carrots on the spot.

27. Process Independent center Sponsor-Affiliate Center Sponsor-FDC Homes Sponsor-Unaffiliated Center • Small Purchase Threshold is $150,000 • Quote for 5 food items • Write specifications • Choose best vendor • Do this QUARTERLY • Effective Oct. 1, 2014 • Over $150,000, call SA • Small Purchase Threshold is $150,000 • Quote for 3 highest price administrative expenses • Write specifications • Choose best vendor • Do this ANNUALLY • Effective Oct. 1, 2014 • Over $150,000, call SA

33. Procedure for Procurement • 2 versions • Independent Centers and Sponsors of Affiliated Centers • Sponsors of FDC homes and Unaffiliated Centers • Explains requirements • Explains frequency

34. Frequency • ANNUAL: one time per fiscal year. Should be done in conjunction with the preparation of the annual budget • QUARTERLY: every 3 months. Suggested: • October • January • April • July

35. Summary • Use of Federal funds required proper procurement procedures. • Must compare prices and keep the playing field level. • Must disclose less-than-arms-length transactions • Must be able to demonstrate free and open competition • Many stakeholders are interested when Federal funds are used • Funds must be used effectively and efficiently, no waste or abuse

36. www.doe.in.gov/cacfp

38. For Questions, Contact • Carol Markle @ cmarkle@doe.in.gov • Heather Stinson @ hstinson@doe.in.gov • Mary Lou Davis @ mldavis@doe.in.gov • Karen Edwards @ kedwards@doe.in.gov • Elaine Haney @ mhaney@doe.in.gov • Kim Cobb @ kcobb@doe.in.gov • Maggie Boyce @ maggie@doe.in.gov

39. USDA is an equal opportunity provider and employer.