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Formal Procurement Method

The “formal procurement method” must be used when the dollar amount of the procurement has an estimated value equal to or greater than the Federal and State small purchase threshold, which is currently at $150,000. However if the school’s small purchase threshold is less than $150,000, the school would use its small purchase threshold because it is more restrictive.

Additionally, a school may choose to use the formal procurement method if the school’s purchase is high enough but may not exceed the small purchase threshold, because the school has determined that formal procurement method will result in a better use of nonprofit food service account funds.

The formal procurement method may seem overly cumbersome or time intensive.  However, when making a high dollar purchase, the formal procurement method should result in a purchase that is cost-effective, cost-justifiable, and defendable from a competitive procurement perspective. As with any procurement, it is important to allow for sufficient time and resources, this is particularly important when using a formal procurement method.

To avoid procurement pitfalls a school should:
  • take its time,
  • plan the procurement process carefully, and
  • seek guidance when necessary.
Below are some additional links for understanding the formal procurement method: