What is Procurement?
March 2009
In school foodservice, the activity of procuring food is a federally regulated process. This is due to the fact that public schools typically procure food using program funds from reimbursements for free, reduced and paid meals. This means they carry regulations as to how they are spent. The federal procurement regulations pertaining to the school lunch program are found in the Code of Federal Regulations, Title seven, section 3016. The cornerstone of the regulations is the concept of free and open competition. In base form, compliant procurement occurs when two or more qualified suppliers of a good or service are sought to provide bid responses to a districts solicitation. Another viewpoint would be that competition is used to make certain the federal funds are used to provide the greatest benefit possible and that program funds are not wasted on non value added costs.

The difficulty in interpreting the federal regulations is that they are designed to be flexible in order for districts to incorporate their specific needs into their procurements. They do not provide a template or defined document that you can simply print and use. The regulations do contain characteristics of compliant procurement which include for example the use of public advertisement of your solicitation in order to promote maximum competition. It also calls for the inclusion of specifications for what you are looking to purchase. Specifications are typically detailed descriptions of the good or service that you are looking to procure. The level of detail can be as unique as the district itself. The specification should communicate sufficient data to enable two or more competitors to know and understand what they are offering pricing on without being so restrictive that only one competitor can supply it.

  What is interesting is that the federal regulations say the local district should develop its own criteria and for them to follow their own procurement method using federal and state regulations as a guide. This brings up an interesting dynamic where districts must first understand what it is that they want to procure. Meaning specifically what are their standards, criteria, specifications for their required products and services. While it may seem obvious and easy to many, the idea of developing specifications is a very tedious and labor intensive process.

Another interesting aspect of the regulations is that it does not require the district to purchase the cheapest product available. It does say that the district must award a contract to the most cost effective response once all criteria have been met. Knowing the criteria and specification is key to receiving the most cost effective product in the district. What does cost matter if the cheapest product does not provide a sufficient return on investment? Successful quick service restaurants all have specifications for product based upon a known, tested desired result that they expect to achieve every time they serve that product. There business is built on repetitive business which means a customer receives the same expected value each and every time he or she purchases the product. It seems to make sense that we strive for the same results from school foodservice procurements.

Where to start? Although the concept of procurement seems overwhelming, you need to start the process. Begin with your menu. Effective procurement begins with effective menus.

Written by:
Cliff Meyers
K12 Services, Inc.
Use the "Product Usage" report to help plan diversions for next school year!

The "Product Usage" report can be very useful when planning your diversions for next school year. To get to this report, select a manufacturer from the white drop-down box in gray menu section on the left of your page. Go to the balance page for that manufacturer by clicking "Balance" in the gray menu section. At the top right of your balance table, there will be a row of seven icons. The fourth icon from the left will take you to the "Product Usage" report for that specific manufacturer.



This report defaults to year-to-date, but a specific month can be selected to view. Choose a specific month select the month you wish to view from the options running across the top of the table. You may also view product usage from previous years by changing the school year date. To do this, select the appropriate SY from the drop down bar on the left side of the pink bar running across the top of the page

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