Overview of Bidding

NETCO bids three categories of services—Service Provider/Distributor services, direct market purchases, and the processing of USDA commodities.

The Service Provider/Distributor bid is released as an RFP—request for proposal. Due to the professional services required, the RFP is a negotiated contract. The RFP timeline is to release in January, responses due in February, negotiation in March, and award in April, The contract period is July 1 through June 30. The RFP is awarded on an annual basis with the opportunity for four, one year extensions. The service provider is notified by January 15 of each year if the contract is to be concluded in June or extended another year. Part of the determination of the Service Provider/Distributor contract is the pricing and pricing structure of low volume purchases or indirect items. These items are purchased by the service Provider for NETCO, delivered to NETCO schools as ordered by the individual systems, billed to the systems by the Service Provider, and payments are made from the systems to the Service Provider.

Direct Bids are bids for large volume and/or high dollar purchases. Bids are developed by NETCO, and sent directly from NETCO to the manufacturer or manufacturer’s broker. Products, brands, and prices are awarded by NETCO based on total value. Total value includes price, quality, quantity required for purchase, availability, and student acceptance. After the bid is awarded, the Service Provider purchases the products from the manufacturer at NETCO’s bid price, and stocks and delivers the product as requested by the individual systems. NETCO systems pay the Service Provider for these goods following receipt into their schools. Currently, the bid timeline is release in January, responses due in February, and awarded in March or April. The bid period is July 1 through June 30. The bids can be extended one year with notification to the companies by January 15 for the following July through June period.

The third area of bidding is for the processing of USDA commodities. NETCO is recognized as an entity of one by the Tennessee Department of Agriculture. Bids are developed by NETCO and sent directly from NETCO to the manufacturer or manufacturer’s broker. Products, brands, and prices are awarded by NETCO based on total value. Total value includes price, quality, quantity required for purchase, availability, continuous product flow (availability of a matching commercial equivalent for continuity of supply when the USDA commodity runs out), and student acceptance. NETCO requests that TDA/USDA divert certain USDA products directly to manufacturers for processing. The manufacturer delivers the finished processed products to the Service Provider. NETCO’s Coordinating District makes payments with a single check directly to the manufacturer for each delivery made to the Service Provider. The source of NETCO funding is a Revolving Fund. The Revolving Fund holds payments made by individual systems based on anticipated purchases for USDA processing. The Revolving Fund earns interest and that interest is allocated to the individual systems based on their fund balance. The bid period for processing products is similar to Direct Bids.