The ABC County Board of Education Intends to Enter Into a Contract with an Effective Period

The ABC County Board of Education intends to enter into a contract with an effective period of July 1, 2014 to June 30, 2015. This contract period may be renewed at 1 year intervals for up to four additional years. At the end of each bid period, the prices for individual items on the bid the previous contract period may be adjusted upward or downward. Petitions for price increases/decreases may be requested by the school district or the distributor. Price increases/decreases must be requested no later than March 15, 2015. Price increases cannot exceed the percent change in the CPI for the following index: All Urban Consumers, U.S. Food and Beverages.

The following formula will be used in the computation of percent change:

Figure A – CPI for established price index for the latest month published Figure B – CPI for established price index for ONE YEAR prior to latest month published

Establish the allowable percent change:

CPI for Figure A was ______CPI for Figure B was ______

Figure A – Figure B = _____ X 100 = ______Figure B

The maximum percent change allowed would be ______. The district WOULD NOT want to advertise the percent change. The district would let the distributor petition for price increases/decreases, audit those price changes to make sure they were within the percent allowed and either accept or reject the price changes. All price increases/decreases SHOULD BE EVALUATED on a bottom line basis, not by individual items. If the price changes are rejected, the district could have the vendor revisit his price increase petition, send out a new bid or discontinue purchasing any items that drove the price increase to be too high.

(Example is for our use only. Not to be included in the bid document) Consumer Price Index - All Urban Consumers Original Data Value

Series CUUR0000SAF Id: Not Seasonally Adjusted Area: U.S. city average Item: Food and beverages Base 1982-84=100 Period: Years: 2004 to 2014

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2004 184.3 184.5 184.9 185.0 186.5 186.8 187.2 187.3 187.2 188.4 188.6 188.9 2005 189.5 189.3 189.6 190.7 191.1 190.9 191.3 191.3 191.8 192.5 192.8 193.2 2006 194.5 194.4 194.5 194.2 194.7 195.1 195.6 196.0 196.7 197.5 197.2 197.4 2007 199.198 200.402 200.869 201.292 202.225 202.885 203.533 204.289 205.279 206.124 206.563 206.936 2008 208.837 209.462 209.692 211.365 212.251 213.383 215.326 216.419 217.672 218.705 218.752 218.839 2009 219.729 219.333 218.794 218.364 218.076 218.030 217.608 217.701 217.617 217.957 217.733 218.049 2010 219.223 219.140 219.378 219.536 219.693 219.562 219.539 219.877 220.586 221.005 220.991 221.278 2011 223.160 224.039 225.479 226.248 227.082 227.451 228.323 229.490 230.448 230.885 230.656 231.130 2012 232.559 232.453 232.708 233.116 233.257 233.509 233.557 234.017 234.172 234.718 234.742 235.230 2013 236.183 236.230 236.267 236.761 236.474 236.726 236.957 237.348 237.444 237.794 237.585 237.820 2014 238.792 239.476 240.226 241.103 242.065 242.027 242.674 243.497 244.260 244.775 244.902 245.585 Case Study 1: The vendor submitted the following pricing for renewal on March 10, 2015: Bid Item Description Item # Price 4560 Hamburger Patties, 2.5 oz ea, 40 lb cs/256 ct $42.00 2250 Chicken Tender, .5 ea, 40 lb cs $39.00 1818 Fish, Cod, 40 lbs. cs $55.00 1216 Breafkast Pizza, Pepp., 72 (4.72 oz)ct/cs $42.50 1865 Taco Meat/Crumbles, 20# cs $17.85 2222 Cereal, Kells, Tootie O's 60 ct/cs $27.50 4620 Sister Maggie Rolls, 120 ct/cs, 2 oz. each $10.50 9788 Case WK Corn, 6/#10 cn $18.50 6767 Case Pineapples 6/#10 cn $27.00 3321 Case Peaches 6/#10 cn $21.00

District Comparison: Original Base Bid Renewal Quotes Item # Item Description Bid Bid Usage Total Amt. Usage Total Amt. Price Price 4560 Hamburger Patties, 2.5 oz ea, 40 lb cs/256 ct 100 $40.00 $4,000.00 100 $42.00 $4,200.00 2250 Chicken Tender, .5 ea, 40 lb cs 200 $37.50 $7,500.00 200 $39.00 $7,800.00 1818 Fish, Cod, 40 lbs. cs 50 $35.00 $1,750.00 50 $55.00 $2,750.00 1216 Breafkast Pizza, Pepp., 72 (4.72 oz)ct/cs 200 $42.00 $8,400.00 200 $42.50 $8,500.00 1865 Taco Meat/Crumbles, 20# cs 25 $17.50 $437.50 25 $17.85 $446.25 2222 Cereal, Kells, Tootie O's 60 ct/cs 200 $25.00 $5,000.00 200 $27.50 $5,500.00 4620 Sister Maggie Rolls, 120 ct/cs, 2 oz. each 100 $10.00 $1,000.00 100 $10.50 $1,050.00 9788 Case WK Corn, 6/#10 cn 25 $18.00 $450.00 25 $18.50 $462.50 6767 Case Pineapples 6/#10 cn 10 $22.00 $220.00 10 $27.00 $270.00 3321 Case Peaches 6/#10 cn 10 $20.50 $205.00 10 $21.00 $210.00 Total A: $28,962.50 Total B: $31,188.75 Did the pricing increase or decrease? Total A: Original Base Bid Pricing Total B: Proposed Renewal Pricing

Proposed pricing has increased by what percentage: Total B – Total A = ____ X 100 = __ %__ Total A

What happens next?

Case Study 2: The vendor above submitted the proposed price changes: Original Base Bid Renewal Quotes Item # Item Description Bid Bid Usage Total Amt. Usage Total Amt. Price Price 4560 Hamburger Patties, 2.5 oz ea, 40 lb cs/256 ct 100 $40.00 $4,000.00 100 $42.00 $4,200.00 2250 Chicken Tender, .5 ea, 40 lb cs 200 $37.50 $7,500.00 200 $32.00 $6,400.00 1818 Fish, Cod, 40 lbs. cs 50 $35.00 $1,750.00 50 $55.00 $2,750.00 1216 Breafkast Pizza, Pepp., 72 (4.72 oz)ct/cs 200 $42.00 $8,400.00 200 $42.50 $8,500.00 1865 Taco Meat/Crumbles, 20# cs 25 $17.50 $437.50 25 $17.60 $440.00 2222 Cereal, Kells, Tootie O's 60 ct/cs 200 $25.00 $5,000.00 200 $27.50 $5,500.00 4620 Sister Maggie Rolls, 120 ct/cs, 2 oz. each 100 $10.00 $1,000.00 100 $10.50 $1,050.00 9788 Case WK Corn, 6/#10 cn 25 $18.00 $450.00 25 $18.25 $456.25 6767 Case Pineapples 6/#10 cn 10 $22.00 $220.00 10 $27.00 $270.00 3321 Case Peaches 6/#10 cn 10 $20.50 $205.00 10 $21.00 $210.00 $28,962.50 $29,776.25

Proposed pricing has increased by what percentage: Total B – Total A = ____ X 100 = __ %__ Total A

What happens next?