The competitive bid process is an integral part of foodservice operations in many schools. It can be complex, time-consuming, and paper-intensive. But there are ways to make the process more efficient—and deliver better results for your school system.
With the competitive bid season almost upon us, here are some top tips to keep in mind.
1. Utilize an Request for Proposal (RFP) to include value-added services, quality, financial stability, and other factors in your review process.
The RFP process is a true competitive analysis of distributors, as it expands the comparison beyond price. Typically, school districts assign points to different foodservice factors that are important to them—say, 40 points for pricing, 25 for capabilities, 10 for customer service, and so on. Distributors that earn the most points are awarded the contract.
“Each school district has to utilize the bid type that works best for them,” says Jonathon Fillmore, Gordon Food Service Bid Department Manager. “But in general, RFPs give schools more latitude and flexibility. Many districts are looking for a partner relationship with a distributor, someone they can rely on for assistance with every aspect of their foodservice operation, from menu planning to marketing tools, food shows, and managing food costs. RFPs enable schools to evaluate the big picture.”
There’s no way for a district to take these services into account with an Invitation to Bid (ITB). Yet they can have a tremendous impact on an operation’s efficiency, participation rates, and bottom line. RFPs enable schools to evaluate overall value, which can improve their margins much more significantly than the lowest price on a case of ketchup.
2. Make sure all information is complete and accurate.
It seems elementary to note, but the bid process can get complicated, and it’s easy for things to slip through the cracks. Schools are under such time constraints that they sometimes don’t complete a final review of their bid requests before distributing them. Some schools send out the same bid year after year, without updating it to account for changes. Unfortunately, they can spend more time on the back end addressing problems than they would in reviewing the bid request up front.
3. Be as specific as possible about what you want.
There is a perception that the less specific schools are in bids, the better prices they’ll get back. This may be true—if they call for a generic chicken patty, for example, they’re liable to get a very low price, but their kids might not eat it.
4. Include USDA commodity requirements.
Schools requesting pricing for USDA commodity items can ease the bid process by: Making sure to include the proper language per state and federal guidelines, identifying the specific USDA items for which pricing is solicited, and clearly defining any additional USDA pricing information required in the bid market basket (e.g., commodity sell price and value pass-through method).
Are you a current customer? View more information about USDA commodity requirements in the latest edition of Food Elements.
5. Follow all state and federal guidelines.
Districts must take care to comply with all state and federal guidelines, not just in relation to the USDA. Some states have very specific regulations relating to the bid process, up to and including state review of ITBs and RFPs. Understand the rules in your area before the bid process begins.
6. Send and receive bids electronically.
Sending and receiving bids electronically is the most time- and resource-efficient way to streamline and manage the process.
7. Allow at least 21 business days for bid responses.
“It’s really important to allow distributors enough time to prepare a comprehensive bid,” Fillmore says. “Manufacturers and vendors typically want 10 business days to prepare their responses for us. Distributors need about that same time to really analyze the bid and get the very best prices. Then there’s a couple of days in transit back to the school district. A window of at least 21 business days is optimal.”
8. Build in time for questions.
Some schools will write into the bid that they’ll accept written communications up to a certain date,” she says. Doing so will help minimize the challenges of answering incomplete bid requests.
9. Allow at least two months between awarding of bid and first order.
If you’re transitioning to a new distributor, a two-month minimum is imperative to ensure a successful school startup. But even if your existing distributor wins the business, that distributor still needs time to set up new items, adjust inventory levels, and arrange for any new delivery sites.
This article first appeared in Food Zone, a publication for education customers.
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