Purchasing Predicament

Tuesday, March 10, 2015

The Avengers
What is a Specification?
A specification is a description of a product that is used to specify a purchase and it spells
out everything about the product for both the buyer and the seller. It typically includes the
name of the product, quality designation, the name and size of a container, the count per
container, the number of pieces, and the unit on which price is to be quoted. (1) Therefore
a specification is very descriptive and specific.
Create a specification for a fresh fruit or vegetable available locally and for fresh
chicken strips.
Name of product: Apples
Federal grade, brand, or other quality designation: U.S Grade 1, medium sized, no
bruising/scaring.
Count per container: 150 count
Unit on which price is to be quoted: per lb
Name of product: Fresh Chicken Strips
Federal grade, brand, or other quality designation: U.S Grade A, edible portions of
chicken strips (1 oz per strip), white meat.
Count per container: 50 lbs
Unit on which price is to be quoted: per lb
What is group purchasing?
Group purchasing is the collective procurement of goods at a much lower cost. School
districts are turning to group purchasing more and more because they realize that they can
leverage their buying power with increased numbers. (2) This allows the districts to order
healthier options for a much lower price. Rural and smaller districts see the biggest
benefit while using this procurement method because they are able to buy in bulk and are
now meaningful customers to the providers who cannot afford to lose them.
What is request for bid?
There are many different ways that schools can procure food items. One way is known as
formal competitive bids, in which the school sends vendors specific criteria of what they
need and the vendors respond with a bid. This gives the school options to decide whom
they wish to do business with. Daily bids are another way used to procure perishable
goods. This is relatively informal and is typically done over the phone or via email. Line
item bidding is where each item is singularly bid on and the bid is awarded to the lowest
price for that specific item. (3) All or nothing bidding is where the bid is awarded to the
vendor with the lowest bottom line.

What is farm to school?

Farm to school is a program in which schools buy and feature locally produced, farmfresh foods. These foods can be fruits, vegetables, eggs, honey, meat and beans. The
mission of the program is to link school aged children with farm fresh food and
educational activities that bring the world of agriculture to life. Young people who have
the chance to dig in a garden, learn about nutrition, agriculture and the natural world, and
have the opportunity to cook fresh foods, are more likely to eat these healthy foods when
they are served in the school cafeteria and when available to them at home. (4) This
helps children learn to nurture their bodies, communities, and the environment.
How viable do you think farm-to-school program might be? What are the
contractual issues that might arise?
The viability of the farm-to-school program depends mainly on the area of the
country in which the school is located. There can be many contractual issues that may
arise in the farm-to-school program. Since farms rely completely on the environment to
produce their product, there may be many environmental influences the farmer cannot
control that may affect their overall crop and production rate. For example, if a farm
located in New England gets an extreme amount of snow during the winter that takes a
long period of time to melt, their spring crop will be affected. If a local school has a
contract with that farm, they may not receive the amount or type of food agreed upon in
the contract. In warmer climates of the country where the farms do not have to worry
about unpredictable weather conditions, the farm-to-school program may be more viable
because the farms can give a more accurate prediction of the crop they will be able to
provide the schools.
What are USDA foods? What is Diversion?
USDA foods (also known as commodity foods) are purchased by the USDA, and sold to
schools at minimal cost. USDA Foods are lower in cost than similar products a school
could purchase on its own. The USDA strives to provide healthy foods with low fat,
sugar and sodium contents.
The USDA purchases food for all states (excluding Kansas.) Local school districts, also
known as School Food Authorities (SFA) or Recipient Agencies (RA) are responsible for
administering the USDA Food Program in their local district. (5)
Commodities available for the 2014-2015 school year include, frozen apricots, frozen
blueberries, frozen cherries, unsweetened orange juice, sweet potatoes, tomato paste,
frozen pollock, pinto beans and lentils.
Because many USDA Foods items are purchased in bulk form, additional processing is
often needed before the products are usable in school kitchens. These products are known
as Diversions.

Diversion strategies are critical and are often instrumental in determining the bottom line
in terms of school district expenses and nutritional value received by the students.
What method of purchasing system is Lisa currently using? What methods of
purchasing should she be evaluating?
Lisa is currently using a centralized method of purchasing. She is responsible for
purchasing food for all the schools in her district. Because Lisa came up with the idea to
partner up with another school food director and to purchase food together, she would
have to look at group/collective purchasing methods. Group purchasing allows school
food directors to obtain greater buying power and get food for lower prices than they
would if they were purchasing on their own. Joint power agreements may also be
beneficial because they usually result in less paperwork since there are fewer bids and
contracts for a school food director to manage.
Should Lisa and Jennifer combine to purchase food and supplies?
Yes they should because combining would increase their purchasing power and their
ability to negotiate for lower pricing. This approach would also save both of them time by
reducing the amount of purchasing agreements and paperwork. Time spent on the phone
with sales reps to resolve problems would be lowered, allowing them to focus on other
tasks. Group ordering and bidding is a smart way to reduce costs and it is much easier for
the supplier to deal with a small group that represents many districts than to do business
with lots of small schools individually.

Works Cited
1. Gonsalves, Maureen K. "Purchasing Predicament." Framingham State University,
Framingham. 27 Feb. 2015. Lecture.
2. Quang, Dang H. "Power in Numbers: Group Purchasing for Healthier School Meals."
Healthier Generation 342.6165 (2013): 1415. Web.
3. Gregior, Mary Exploring Food Service System Management through Problems.
3/9/2015. Powerpoint presentation.
4. "Farm to School Education." Farm to Table New Mexico. N.p., n.d. Web. 9 Mar. 2015.
5. "USDA Foods in Massachusetts Schools." USDA FOODS (2013): n. pag. Chpi.org.
Web. 9 Mar. 2015.