By Barry Sackin, SNS 2016-11-04 16:17:27
Best practices for effective operations A Decent Proposal Establishing clear and measurable RFP criteria will help you identify responsible vendor partners. In its September issue, School Nutrition offered a primer on the five approved approaches to procuring goods and services for K-12 school foodservice operations participating in the National School Lunch Program (NSLP) and other federal school meal programs (see “To Bid or Not to Bid, That Is (One of) the Question(s)!”). Of the five approaches, we delved deepest into the Invitation to Bid (ITB) model and also provided an overview of the Request for Proposal (RFP) method. This article will take a closer look at how to make the best use of an RFP for getting what you want and need for your school meals operation. Remember the Fundamentals Let’s begin with a recap of the two main principles that should guide all procurements, whether formal or informal: Procurements must be fair, open, competitive and transparent; and procurements must be in the best interest of the school district. “Fair, open, competitive and transparent” means that any and all vendors who can meet the district’s needs for goods and services should have the opportunity to do business with the district, and the determination of who is awarded the contract should be obvious to anyone who reviews the documents. To be in the best interest of the district means that the award should be given to the most responsive and responsible vendor. That isn’t always the one making the lowest-priced offer, but it is the one that best meets a variety of identified district needs, including price, as well as quality and service. The RFP method of procurement allows a district to identify factors other than price that it deems important. Federal law and USDA policy make it very clear that price must be ranked as the top factor in awarding a contract, weighted with more possible points than other criteria, but it doesn’t have to be the only factor in the decision. In keeping with the guiding principles, RFPs must clearly state all the specific factors that will be used in making the award determination, and define how these will be weighted. Anyone reviewing the solicitation and the proposals that are submitted should be able to come to the same award decision. So, what are examples of different factors that could be included in an RFP for K-12 school foodservice goods and services? As you compile your list, you need to determine if these factors are reasonable and relevant. Let’s look at two actual RFPs issued by districts in California as examples and weigh them against our guiding principles: fair, open, competitive, transparent, best interest of the district, reasonable and relevant. This evaluation is similar to the kind of evaluation that should be used in assessing responses to an RFP, except that we will not weight the factors. The importance of each factor is subjective and unique to the particular school district. Just remember that your actual solicitation should state the weights, as well as the factors. The L.A. Experience In March 2010, Los Angeles Unified School District (LAUSD) posted an RFP for “Categorical Partnering for Food-Processing.” The approach broke new ground in procurement by soliciting food through an RFP, instead of using an ITB. Rather than bidding for specific food items on its menu, LAUSD sought processors for four different food item categories: beef, chicken, turkey and potatoes. Subsequent solicitations added produce, dairy, cheese and other categories of food, as well as supplies. It’s important to note that LAUSD is the second-largest school district in the nation and has a commanding presence in the school foodservice segment. Its approach to establish a set of “categorical partners,” rather than procure a market basket of food items, probably wouldn’t work for most districts, since only a handful have the sales volume that would compel vendors to respond. It’s also important to disclose that a number of individuals, including this author, voiced a variety of concerns about LAUSD’s categorical partner solicitation. Subsequent iterations of the RFP addressed some of these concerns, and with changes in district and department leadership, it is uncertain whether LAUSD will continue to use this procurement approach. So, if the LAUSD RFP is such an unusual and distinct example, why include it as an illustration in this article? Because although unique, what L.A. did in preparing its solicitation is instructive in an overall discussion of the RFP approach. LAUSD RFP No. 1007 included 11 separate evaluation criteria, with an aggregate value of 200 possible points. The evaluation chart identified the criteria, what the district was looking for in industry responses, the documentation required to demonstrate how the vendor would meet each requirement and the maximum points allocated to each factor. Indeed, the RFP requested significant proposal documentation, including references, responses to a questionnaire, narratives and supporting documentation for each proposer’s response. LAUSD gets an A+ for the RFP format, and you are encouraged to review it as a good example of how to set up your own RFP. The 72-page document is available as one of this month’s online extras at www.schoolnutrition.org/snmagazinebonus. Some of the criteria set forth in the RFP meet the framework for being relevant and reasonable. These include such factors as “customer satisfaction,” “technology” and “experience”—all of which are important. That said, some of the metrics that are required to document these criteria pushed the reasonable/relevant envelope. For example, a reasonable requirement that was included was for the proposer to document that it provides products to other very large school districts and can demonstrate that it has experience supplying single shipment quantities that would be comparable to what LAUSD would be ordering. But an example of an arguably unreasonable requirement that was included was for the proposer to demonstrate that it supplies products to commercial quick-service restaurants in the LAUSD area. How would this information help the school district when selecting a vendor to supply products that meet K-12 standards? As written, this factor might be considered restrictive, limiting competition. In addition to the metrics, some of the actual factors in the LAUSD RFP are themselves of questionable relevance and reasonability. The district asked for vendors to develop a marketing support plan and to detail how they would provide either in-cash or in-kind contributions. Asking proposers to identify the marketing support that is available seems reasonable, but is it appropriate to ask vendors to develop and underwrite a marketing plan? In another example, LAUSD asked responding companies to demonstrate their commitment to “social responsibility”—specifically to outline their environmental efforts and charitable contributions. For instance, LAUSD asked what contributions the proposer would make to LAUSD’s local charities. Can this be considered reasonable? While any district may deem it important to partner with companies that have shared values, you should think long and hard about whether it’s appropriate to make this a weighted factor on a procurement RFP. In responding to this particular factor, responding companies could wind up adding cost to the overall procurement—costs that may or may not be seen as justifiable when reviewed by the state agency. One of the primary procurement principles is to be a good custodian of federal funds, making decisions that are in the best interest of the district. An underlying question about the examples of the criteria noted above is whether the district is prioritizing its leadership in making large and/or local societal changes at the expense of the operation. That is something for you to decide. Producing a Good RFP As previously noted, while the LAUSD RFP is not an ideal model for most districts to follow, it does encompass many of the right elements needed for an effective RFP. It also includes some good and bad examples of specific factors, and accompanying documentation, that you can require in an RFP. Now, let’s take a look at an example that can be a more applicable model for one of your own solicitations. Fresh produce is an increasingly important category of food you must purchase for your school meals operation. It is also notoriously difficult to bid. Being both fresh and market-dependent makes produce pricing almost impossible to nail down. And many districts are prioritizing more “locally grown” products. Fontana Unified School District, also in California, issued an RFP for fresh produce—specifically for both “Mainline Fresh Produce” and “Harvest of the Month” items—in June 2016. (The solicitation was originally crafted by Mark Chavez of Santa Ana Unified School District.) It is an outstanding example of how to develop and use an RFP. The complete draft is available online as part of this month’s Bonus Web Content (www.schoolnutrition.org/snmagazinebonus), but highlights of key elements follow. After the boilerplate language (the generic elements that all solicitations from the district should contain, including the name and address of the school district, where the service is to be performed or the goods delivered, who to call if there’s a question and so on), the Fontana USD RFP provides a detailed explanation of what it is looking for. It begins by establishing a set of district objectives: 1) Partner with produce vendor(s) to increase the consumption of fruits and vegetables among students in our district. 2) Ensure that students are receiving high-quality produce. 3) Purchase high-quality produce at the best possible price. 4) Offer more produce that is California grown or grown within 300 miles of San Bernardino County. 5) Utilize the expertise of our produce vendor to create menus that incorporate produce items that are in season. 6) Improve the image of school meal programs in our community. 7) Partner with a produce vendor that will provide excellent customer service. Included in the Fontana USD RFP are requirements for “seasonal sourcing and menu planning,” allowing the district and its vendor partner to keep menus fresh and expose children to different seasonal items throughout the year, specifically a “Harvest of the Month” program and a seasonal salad bar selection. The RFP also includes language to ensure freshness, particularly for cut, ready-to-serve items, providing a sample “Best Served By” chart to define the district’s expectations for freshness. In addition, the RFP defines “local” and requires point-of-origin labeling. Fontana USD also provides a grid for use in identifying minimum requirements for all proposers, including levels of experience, safety standards and financial resources. The RFP includes a list of items that the district is likely to purchase with estimated quantities. Because of the seasonal and market-dependent nature of fresh produce, Fontana USD requested a pricing methodology that allows for price adjustments, but asked proposers to detail how these would be made. All of these factors are incorporated into the evaluation scoring grid that clearly lays out expectations and scoring ranges. There can be no misunderstanding of what the district wants and how it will determine the award of the contract. The Fontana USD Produce RFP is an excellent template for a K–12 school foodservice RFP, and it can be modified easily for other product categories. When Is an RFP Appropriate? Let’s reiterate when to use RFPs instead of ITBs. In general, bids are used when the primary differentiation between items from manufacturers/processors is price. When there are other factors in determining the contract award, an RFP may be the better approach. (That said, it’s reasonable for ITBs to include pre-qualification standards that address some non-pricing criteria, particularly those that establish minimum service standards.) In this article’s first example, LAUSD charted new territory by issuing an RFP for food categories. The district established a list of criteria, some of which might not meet reasonable and relevant definitions. But because of its size, LAUSD is in a position to add criteria and requirements that most districts could not. In our second example, from Fontana USD, there were clear differences that could be quantified and measured in comparing and contrasting responding vendors. The essential ingredient in both examples— and all RFPs—is that criteria must be measurable. Vendors, particularly distributors, tend to like the RFP approach, as the additional criteria often allow them to differentiate themselves from their competitors. These vendors can showcase how well they know the K-12 market (particularly the USDA Foods program), how they address service requirements, how they can save you money with variations on delivery and service and how they protect you and your students by meeting safety standards and certifications. All of these points, and others, may be very important to you. At its best, procurement is a partnership between the vendor and the school district customer. Healthy, effective partnerships require clear and frequent communication—and mutual respect. No matter what type of procurement methodology you use, remember that it is incredibly important and valuable to engage in regular dialogue with the foodservice vendors that serve the K-12 market in your area. The insights they can provide can help you navigate the procurement process and meet all of the standards and principles of good procurement practices. Barry Sackin is a school nutrition consultant specializing in procurement issues and a former staff vice president of government affairs for SNA. He can be reached at email@example.com. BONUS WEB CONTENT A Decent Proposal This month’s online extras include the complete Requests for Proposal from both Los Angeles USD and Fontana USD. A close examination of these public documents can be instructive in helping you to prepare your own procurement solicitations. Visit www.schoolnutrition.org/snmagazinebonus to access.
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