Food-Service-Manual-for-Health-Care-Institutions

merchandise ordered and the form used to check the receipt of deliveries, all departments dealing
with supplies or with payments need copies.
Obtaining Bids and Price Quotes
Once the requisition is approved, the purchasing department or food service director develops
a bid packet to be sent to or picked up by a number of suppliers that will compete over price
quotations that meet the specifications, time frame, and quantities as stated in the bid. Once
all suppliers return their bids, the bids are opened, and a flow sheet is made for comparing
prices, discounts, delivery schedules, and other pertinent data. After the suppliers’ data are
compared, the bid is awarded and purchase numbers given. Choices for awarding the bid are
based on all-or-nothing or line-item bidding, sometimes referred to as “cherry picking.” In an
all-or-nothing bid, the supplier bids on all items and offers a price per line and the best price
for the complete bid. Line-item bidding is selecting items that meet the lowest price and quality
per item. With this method, a number of suppliers are awarded items. If the quantity award
is not sufficient for the supplier to realize a return on his or her investment, the supplier may
not accept the bid. Line-item bidding is more time-consuming than all-or-nothing bidding.
Price quotes are used for perishable goods and are usually made by telephone, e-mail, or
fax. The buyer, usually someone in the food service department, requests price quotes on specific
food items from an approved provider for a specific amount of goods and quality. Prices
are secured from one or more vendors, and price and quality are compared after all quotes are
received. The lowest price may not be the best bid, depending on the use of the product. After
the decision is made, the buyer contacts the supplier by telephone, fax, or e-mail and places the
order.
In some cases, the quote sheet may be used as the purchase order. If a purchase order is
needed, it may be prepared using the information from the quote sheet.
All bids and price quotes need to include the shipping terms, method of delivery, and terms
for payment. A common shipping term, free on board (FOB), means that the products are
delivered to a specific location (preferably the food service loading dock) with all transportation
paid. FOB origin refers to the place from which the product is originally transported, and
FOB destination refers to the place the product is going to be received. FOB origin is stipulated
when the order is placed, and the buyer selects the transport company and pays the freight
company, owns the title, and files the claims for bad or damaged goods. If FOB destination is
stipulated, the buyer pays the freight charges, but the supplier owns the title and files any
claims.
After bids and quotes are received, orders are placed with the suppliers. A purchase order
number is used for each order, and these are filed in sequential order. The order may be placed
face-to-face (buyer to supplier), by fax, or electronically.
Record keeping of all purchases is vital to the food service department and organization
for paying invoices and an audit trail.
Evaluating Products
Before awarding a bid, some operations may request that the suppliers provide samples of their
products for taste and test evaluation. It is important to taste the products on the bid list to
determine if the quality requested is being offered and to compare prices.
One method to use to evaluate products is can-cutting. The supplier provides the products,
and food service personnel, the purchasing officer, and others as appropriate receive the products
and carefully evaluate against written specifications. A rating sheet is used, and each person
involved should objectively and independently rate the products (See Exhibit 17.3). Once
all independent evaluations are completed, they are tallied, the results of the evaluation discussed,
and the decision made on which product to select.
Purchasing
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