If Goldilocks was sampling the procurement methods like she did porridges, the small purchase method would be her pick.
Formal methods – Invitation for Bids (IFBs) and Request for Proposals (RFPs)- should get you the best price, but they take both time and effort to complete.
On the other end of the spectrum, the micro purchase is super simple to complete, but doesn’t give you good pricing since you don’t do price comparisons and spread out your purchases.
With small purchase methods, you can complete it fairly quickly, while getting it for a competitive price, making it the Baby Bear porridge of the procurement methods: juuuuust right.
Key Aspects of Small Purchases
Let’s take a look at the key aspects of small purchases that make them what they are.
#1 – You must keep below your small purchase threshold for the aggregate amount.
I write about this in more detail in my article Which Procurement Method Should I Use?. Basically the takeaway here is that most states require that for small purchases, you calculate your aggregate amount based on the amount you’d spend on similar items for the whole year.
#2 – Public advertisement is not required.
In the formal methods, you have to publicly advertise your solicitation (put it in a newspaper and/or post on an internet platform). This is not required for the informal methods.
So instead of putting it out into the universe and allowing anyone to respond, small purchase methods have you contacting the vendors as the only way of getting responses.
Therefore, it’s still competitive, but you’re in the driver’s seat when it comes to letting others know about your solicitation.
#3 – Quotes can be received and opened on a rolling basis, instead of all at once.
In formal methods, you set a deadline for the vendors and have them mail their response to you, then open all the responses at once.
Alternatively, with small purchase methods, you often still set a deadline, but you can open them whenever you want instead of waiting until a specific time. Still, you can’t share with vendors the prices you’ve already been quoted – that would be unfair.
#4 – In small purchase methods, quotes don’t have to be mailed to your physical address.
While the specific forms that are allowable vary from state to state, options could include telephone, email, fax, hand delivered, catalogs, and websites.
Steps for Completing a Small Purchase
Anytime you have to do something new, it can be overwhelming. However, if you follow these steps for completing a small purchase, it’s really pretty easy!
Step 1 – Draft your solicitation before you contact anyone.
You’ll need to include:
- Written specifications. Yes, even in a small purchase, you need a written specification describing what you need and how many you intend on purchasing. This ensures you provide all vendors the same information so that they can all compete fairly. Read more on Writing Product Specifications.
- A statement on how you will award. Bottom line, line item, group?
- Any applicable terms outlined in 2 CFR 200, Appendix II. A common one you might need is Buy American, if obtaining an applicable food or beverage.
- Instructions on how to submit a quote. For example, which form of quotes you will accept (email, fax, phone, etc.), the deadline to respond, who to contact if they have questions, etc.
- Any other requirements the vendor should know or should submit, such as delivery information, invoice/payment, how long the prices will be held for, etc.
Step 2 – Contact as many vendors as you can that could provide the item or service.
That’s right, I said as many as you can. While USDA says you need at least two quotes, some states require at least three. I actually see some states imply that all you need is three quotes.
Nonetheless, 2 CFR 200 states you need to obtain quotes from an “adequate number of qualified sources,” which of course is up to interpretation.
For that reason, I argue that reaching out to as many vendors as you can will get you the best pricing while reducing vendor complaints.
If there are five vendors that could provide you a quote, how would you fairly pick just three of them? Reach out to all of them and get the best price!
Where can I find vendors to provide a quote?
Getting to know vendors and the items available to you is an important part of the job. It’s helpful to maintain a list of contacts, their companies, and the items they carry.
In particular, my predecessor left me a rolodex full of business cards when she retired. However, they were all categorized by the contact’s last name, and I often only knew the company name, so it took me forever to find what I needed.
Now, I use a free app on my phone called CamCard to organize all my business cards. It auto-detects the text on the card (though it is often wonky, and you have to correct it), so that you can later search for keywords, like their name, title, company, or even notes if you’ve added them. I’m not affiliated with CamCard; I just find it very helpful!
Finding New Vendors to Send Quotes to
Still, if you’re new to the position or procuring something new, it can be difficult to know who to contact.
When COVID first hit, a few of our sites needed so much cold storage, we needed to lease outdoor cooler units, something we had never done before.
In this situation when you’re unsure who to contact, there are several sources you can research:
- Websearches: you can often find company information online for the item you’re procuring. Once you find a site, call or email them and tell them what you’re needing. When leasing our outdoor cooler unit, this is the only source that found us any companies that could provide the units.
- Brokers: brokers carry many lines and may rep a manufacturer who makes the item you’re looking for. Sometimes brokers that don’t even carry that item might be nice enough to refer you to one that does – School Nutrition is a pretty friendly community. When leasing our outdoor cooler unit, we called several equipment brokers who told us they didn’t have any lines that leased units. However, they confirmed that purchasing an outdoor unit was going to be way more than what we expected to pay leasing for a few months, so it was still a useful conversation.
- Peers within your district: if it’s something your district may have purchased in the past, you can check with your purchasing office for vendor recommendations.
- Peers outside your district: fellow school nutrition directors may have purchased something similar or can get you a lead on who to contact that might know.
Step 3 – Document, document, document.
Especially for verbal quotes (if your state permits them), you must write down relevant information. Also keep in mind that several states offer small purchase log templates you can use. Just be sure that for each quote, you can show:
- Specifications with quantity or estimated usage
- Company name
- If a person is providing the quote, their contact information
- Date of quote
- Source of quote (telephone, email, website, etc.)
- Price
For example, for a telephone quote, you will need to write down all this information. For an email quote, all this information should already be within the email chain.
Step 4 – Evaluate.
Once you have your adequate number of quotes, you’ll need to evaluate them to determine who you should award to.
First, verify that each vendor is responsive by ensuring they met the deadline, submitted all paperwork requested, their items meet specifications, etc.
Next, verify that each vendor also meets the bar of being responsible, which means they have the ability to execute your contract.
Then, you’ll need to make sure you are comparing apples to apples by calculating an extended price that recalculates usage based on case size and adding any relevant delivery/shipping charges. For example, if you estimated you need 100 cases of 96ct pizza, but the vendor submits a case with 72 ct pizza, you are now going to need 134 cases of that pizza.
Finally, figure out who will win the contract. For example, if it is a bottom line bid, you’ll need to calculate who has the best bottom line price. Alternatively, if you are awarding by line item, you’ll need to figure out which vendor had the lowest price for each item.
Step 5 – Award the contract.
I’ll use the word “contract” loosely here. Next, you’ll notify the vendor that won the contract and begin discussing next steps to make the purchase.
Additionally, it is courteous to notify the vendors who didn’t win. They might be holding some inventory for you, so they will appreciate knowing that you aren’t going to make the purchase, and you want them on your good side for when you need another quote.
The losers non-awardees may ask for the price provided to you by the winner. Due to the Freedom of Information Act, this information is generally allowed to be disclosed, and I would encourage you to do it because it increases the transparency of your process.
Keep in mind if your school board needs to approve this contract, you should wait to give out details until the board approves the contract. Due to the the chance your board asks you to make a change to the contract that would require you to re-issue the solicitation, you want to protect the vendor’s pricing until it’s officially approved for award.
Step 6 – Monitor and manage the contract.
While you might think that awarding the contract is the last step, there’s really one more!
You’ll need to ensure the vendor performs according to your solicitation. Examples include making sure they deliver the correct item in an acceptable state, that the invoice contains all needed information and that the price is correct, that they provide you any rebates or discounts you’re entitled to, and that they are abiding by Buy American, if applicable.
This step is much easier if it’s a one-time purchase and more of an ongoing process if they are providing goods or services over a time period.
Small Purchase Scenario
Let’s say you want to purchase some gloves that will be delivered to your warehouse.
Step 1 – Draft the Solicitation
First, you develop the solicitation. It might look like:
Date: 10/21/21
The School Nutrition Department is soliciting quotes for the item below. The purchase will be awarded to the lowest bottom-line price, including all shipping or other fees, which must be specified in the quote.
Item: Gloves – vinyl, disposable, powder-free, wrist length, size medium, 100ct.
Quantity: 100 boxes
The full shipment must be delivered to the SN Warehouse by November 30, 2021. The awarded vendor will be issued a PO.
Please respond to this solicitation by phone or email by 10/28/21 at noon. Vendors will be notified by 5pm on 10/28/21 of award. Please respond to me with the price at example@example.com. Contact me with questions via email or by phone at 423-555-5555.
Step 2 – Contact as many vendors as you can that could provide the item or service.
I email this to ABC Distributor, EFG Distributor, and US Paper Supply.
Additionally, I do a web search and discover that Amazon and the Webstaurant store both have vinyl gloves available.
Step 3 – Contact as many vendors as you can that could provide the item or service.
Here were my (hypothetical) responses:
10/21/21 – ABC Distributor calls me right after the email was sent. Over the phone, they quote me for $65.10 for case of 10 boxes. I write down the price and the vendor’s information.
10/22/21 – EFG Distributor emails me a quote for $7.54 per box. I file the quote.
10/26/21 – I haven’t heard from US Paper Supply, so I call them to make sure they received it. They tell me over the phone they do not have vinyl gloves in stock, but they have polyethylene gloves for $2.49 per box. I write down the information.
10/27/21 – checked Amazon website. Best price found $9.99 per box. I print the webpage.
10/27/21 – checked Webstaurant Store website. Best price found $6.29 per box with $38.32 in shipping. I print the webpage.
Step 4 – Evaluate.
Next, I tally up the total cost for each vendor and put it into a tab sheet.
Tab Sheet
| Vendor | Price per Unit | Delivery/Shipping Fee | Extended Price | Awarded |
| ABC Distributor | $65.10/10 boxes | $0 | $651.00 | Yes |
| EFG Distributor | $7.54/box | $0 | $754.00 | |
| US Paper Supply | Non-responsive | |||
| Amazon | $9.99/box | $0 | $999.00 | |
| Webstaurant Store | $6.29/box | $38.32 | $667.32 |
First, note that I’ve labeled US Paper Supply “non-responsive”. However, this is NOT because they didn’t initially respond, but because they are unable to provide the product specified. I described vinyl gloves, and they can only provide poly. Therefore, they have not properly responded to the solicitation, making them non-responsive.
Next, I’ve calculated the extended cost by multiplying the price by how many units I need, then adding shipping.
At first glance of the Price per Unit, ABC Distributor appears to have the highest price, but it is only because it includes 10 boxes in a case, while the other companies quoted per box.
Therefore, instead of multiplying by 100 boxes, like I did the others, I multiplied by 10 cases.
Also note that the Webstaurant store has a lower per box cost at $6.29 (compared to $6.51 for ABC Distributor), but they charge shipping that the others don’t. Always be sure to include all related costs in your evaluation.
Step 5 – Award the contract.
Next, notify ABC Distributor that you’ll be purchasing from them and begin the process of ordering the gloves.
You’ll also want to notify EFG Distributor and US Paper Supply that you will not be ordering from them and thank them for their time.
Step 6 – Monitor and manage the contract.
Finally, you’ll want to monitor and manage the contract. You’ll want to ensure that the product is inspected upon delivery to ensure the quality is sufficient, and you receive the correct product.
Additionally, you’ll want to check the invoice to ensure you were billed correctly and no additional fees were added.
Lastly, keep all documentation. For this solicitation, the documentation I would keep includes:
- The written solicitation (email) that I sent.
- The email quote from EFG.
- A log of the two phone quotes from ABC Distributor and US Paper Supply.
- A printout (or print to pdf, if you’re a digital guy/gal) of the Amazon and Webstaurant Store prices. If the date doesn’t automatically print, be sure to write it on the printout or include it in the file name.
- Notification to ABC Distributor letting them know they won the award.
- Notification to the other two distributors letting them know they did not win the award.
- Invoices, POs, and any other documents related to the purchase.
And you’re done with this small purchase! Kick back and enjoy a bowl of ice cream… or some porridge if that’s your thing.
