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Formal Procurement Methods

Overview

Using formal procurement should result in a purchase that is cost-effective, justifiable, and defendable from a competitive procurement perspective. It is important to allow for sufficient time and resources to plan for and conduct the procurement. Per 2 CFR §200.324 (a), SFAs must perform a cost or price analysis in connection with every procurement in excess of the Simplified Acquisition Threshold, including contract modifications.

Formal procurement method must be used when the estimated value of the contract or purchase exceeds the simplified purchase threshold of $250,000. However, if the SFA’s local formal procurement threshold is less than this federal and state threshold, the SFA must utilize the more restrictive threshold and conduct a formal procurement.

Formal procurement method may be used when the estimated value of the contract or purchase is less than the formal purchase threshold, but the SFA has determined that formal procurement will result in a better use of nonprofit school food service account funds.

Types of Formal Procurement

Invitation for Bid (IFB)

  • ​​​​​​Also referred to as “sealed bid” or “request for bid (RFB)”
  • Contract award is based on lowest bid (cost)
  • Must be used when contract value exceeds $250,000, or local threshold
  • Must be compliant with 2 CFR §200.320(b)(1)

Request for Proposal (RFP)

  • Also referred to as "competitive proposal"
  • Contract award is based on highest scoring proposal with cost being the most heavily weighted criteria
  • Must be used when contract value exceeds $250,000, or local threshold
  • Must be compliant with 2 CFR §200.320)(b)(2)

For more information, review:

Notices

A public notice can be used with any procurement, but it is required for formal procurements (IFB and RFP). It is an important step in the solicitation process. The SFA will formally advertise the solicitation in the local, regional, state or national newspaper and/or post the notice to the SFA's procurement webpage, where other procurements are normally shared.

The goal of any procurement is to receive at least three responsive offers from responsible offerers. If necessary, the school may need to increase its public notice viewing area to state or national newspapers to receive adequate responses. The SFA must make every effort to ensure maximum competition is achieved.

Policy and Guidance Memos

Clarification of Invitation for Bid and Request for Proposal Procedures and Applications FY 05 School & Community Nutrition Programs Policy Memorandum # 05-24, USDA, 08/01/2015