Applying “Geographic Preference” is one tool for school districts to use to buy local food. Geographic preference came out of a specific provision in the 2008 Farm Bill that allowed school food buying authorities to give preference to local, unprocessed agricultural products.
While a school district cannot specify that a product MUST be local, it can give PREFERENCE to a local item. Geographic preference gives vendors offering local products a defined advantage in the contract bid, but does not preclude vendors that do not offer local products.
School districts can buy local without using geographic preference, but it is one more tool that can help get local food into schools and can be applied in any type of product solicitation.
Geographic Preference can only be applied to UNPROCESSED agricultural products, which means that the inherent nature of the product is unchanged. Some food handling and preservation techniques are allowed (i.e.: freezing, cutting, grinding, drying, mashing, and pasteurizing), but any sort of cooking is not. For example, dried beans ARE allowed, but canned beans ARE NOT, since the canned beans were cooked prior to canning.
There are four steps for a school district to start using Geographic Preference:
- Explicitly define “local” and spell that out in your solicitation
- Determine what type of procurement method to use (i.e.: formal or informal)
- Determine how much preference to give local products
- Make sure the solicitation makes perfectly clear how the preference will be applied
1. Define “local”
It is up to individual school districts to define “local” in a way that best fits their needs. The definition can be different for different products, and must not be so restrictive as to limit competition. For example, “local” can be defined as a specified mile radius (i.e.: 50 miles, 100 miles, etc.), as coming from within the state, as coming from a specific region. School districts can also have a definition of local with multiple tiers, giving more preference to more local items. For example:
Tier One—Products grown or raised within 100 miles of the school district
Tier Two—Products grown or raised in Georgia
Tier Three—Products grown or raised in a state touching Georgia
Tier One—Products grown or raised within 100 miles of the school district and in Georgia
Tier Two—Products grown or raised in Georgia and more than 100 miles from the school district
Tier Three—Products grown or raised within 100 miles of the school district and outside of Georgia
The most important thing to remember when defining “local” for your school district is what will work best for you. If you have some growers in mind, see where they are located before defining local.
2. Determine what type of procurement method to use
Geographic preference can be applied in any type of product solicitation, and does not have to be a separate section of the solicitation.
3. Determine how much preference to give local products
When giving preference to local products, remember that the preference is for the purposes of evaluation only. A bid price get reduced by a certain amount, giving that vendor an edge to win the contract, but the school district still pays the full bidded price from the vendor. Remember that even with a preference given to local products, a non-local product could still win the bid.
It may take some trial and error to determine the best amount of preference to give local products. Try out different scenarios with realistic prices to make sure the percentage points make sense and see how the prices work out. Remember to not apply so much preference that you limit competition; applying so much preference that a Tier One local vendor will win no matter what is too limiting. Also remember that you will still pay the full price. If a local product is unaffordable for a school without the preference applied, it may not be able to be purchased and the preference may be too high.
Preference can be given as a dollar amount. One point can equal one penny when the bid is for a specific product. For example, you can give a 5 cent price preference to products that meet your definition of local. In the chart below, Vendor B had the lowest price before preference was applied, and although Vendor A, which met definition of local was given a 5 cent preference, Vendor B still ultimately had the lowest price for comparison.
Preference can also be given as percentage points. For example, if you have a two-tiered definition of local, you can give a 10% price preference for Tier One vendors and a 7% price preference for Tier Two vendors. In the chart below, although Vendor A had the lowest price before geographic preference was applied, Vendor C, which met the Tier One definition of local and therefore was given a 10% preference, ultimately had the lowest price for comparison. The school district will still pay the vendor $24,500, but the geographic preference allowed this vendor with local products to win the bid.
There are also more complex ways school districts can apply geographic preference. For instance, schools can use a sliding scale to give vendors with at least 70% local products a 10 point preference, vendors with 50-69% local products a 7 point preference, and vendors with 25-49% local products a 5 point preference. Additionally, districts can use geographic preference in an RFP, giving preference not just for locally sourced products, but also for a vendor’s ability to provide farm field trips, or to provide the product for three months straight, or to provide a farm of origin on all products. See more ways to target local in an RFP here.
4. Make sure the solicitation makes perfectly clear how the preference will be applied
Since school districts have the flexibility to determine what defines “local” and how much preference will be applied, it is very important to remember to clearly and explicitly state your definitions and processes. Document every step of the process so it is clear to everyone how the geographic preference is being applied.
Geographic preference is not the only way to buy local; it is just one tool to use to procure local products for school meals. Schools can also work with their distributors, target local foods through their product specifications, use forward contracts, etc. For more information about geographic preference and examples of its use, see these two webinars from USDA Farm to School: “Introduction to Geographic Preference” and “Using Geographic Preference.”