Attach_8_Quality Systems Mgt Visits and Quality Audits.pdf

SPE302-26-R-0002 ALASKA FRESH BREAD AND BAKERY – STATEMENT OF WORK

Quality Systems Management Visits and Audits

a. Quality Systems Management Visits (QSMVs)

i. The Supplier Support Division's audit personnel will conduct unannounced Quality Systems Management Visits (QSMVs) to assess the Contractor's adherence to the contractual obligations.

These visits may occur routinely or in response to subpar ratings received during DLA Troop Support Indo-Pacific Product Audits, customer grievances, directives from the Contracting Officer, or at the discretion of the Government. QSMVs may encompass inspections of subcontractors and/or product suppliers/food distributors engaged by the Contractor. Should DLA Troop Support Indo-Pacific determine the necessity of an onsite visit to a subcontractor, product supplier, or food distributor utilized by the Contractor, the Contractor is responsible for facilitating such visits.

ii. During the Quality Systems Management Visit (QSMV), the Government may conduct a comprehensive review and verification of various areas, as deemed necessary. These areas include, but are not limited to:

a. Compliance Methodologies: Evaluation of methods and procedures utilized to comply with the terms of the contract.

b. Storage Facilities: Assessment of the condition of storage facilities.

c. Product Shelf-Life Management: Review of practices related to managing product shelf-life.

d. Inventory Management: Examination of inventory in-stock, including product age, condition, labeling, and rotation (e.g., First Expiry-First Out).

e. Shelf-Life Extensions and Product Substitutions: Consideration of procedures regarding shelf life extensions and product substitutions.

f. Control of Material: Oversight of materials earmarked for destruction, disposal, or return to suppliers due to customer returns or recalls.

g. Documentation Review: Examination of paperwork related to destroyed/condemned or returned products, including those rated Blue/Red during the last DLA Troop Support Indo- Pacific audit.

h. Customer Returns and Notifications: Assessment of customer notification procedures for product recalls and the Contractor's response to customer returns/issues.

i. Visits to Customer Locations: Evaluation of the Contractor's interactions and service provision at customer locations.

j. Unannounced Customer Visits: Possibility of unannounced visits to customers served by the Contractor.

iii. The Contractor must provide the Government a report showing all DLA Troop Support Indo-Pacific catalog products sorted by location when the QSMV Team arrives. The Contractor’s Non-Price (Technical) proposal will be incorporated by reference into the contract.

iv. The Contractor will be responsible for complying with its Non-Price (Technical) proposal.

Procedures and processes set forth in the Contractor’s Non-Price (Technical) proposal may be used as standards for a QSMV. If there is any conflict between the language solicitation and the Contractor’s Non-Price (Technical) proposal, the language solicitation governs.

v. The Contractor must take corrective action to address any concerns identified as a result of the QSMV. Concerns identified during the QSMV, or Contractor failure to take corrective action in response to QSMV findings, will be grounds for terminating the contract for cause. The Government may, at its discretion, take other action to correct the concerns identified during the QSMV, such as but not limited to additional unannounced QSMVs. Such action will not constitute Government forbearance or waiver of noncompliance with contract requirements and will not affect the Government’s right to terminate the Contractor’s contract or take other corrective or adverse action.

b. Audit Process

i. The Contractor will be given advanced notice of sixty (60) calendar days of an impending audit.

Notwithstanding this, the Government reserves the right to conduct unannounced Quality Audits or QSMVs.

ii. Items selected for evaluation will be segregated from the Contractor’s regular inventory and appropriate procedures shall be used to maintain the integrity of the samples. Evidence that the Contractor has replaced or tampered with samples, or otherwise interfered with the audit samples and/or audit process will result in the contractor failing the audit. One or more audit failures may be grounds for terminating the contract.

iii. Deviations from the contract or stock number requirements will be color coded and classified based on the severity of departure from requirements as follows:

1. CONTRACTOR PRODUCT AUDIT RATINGS (COLOR CODE RATING SYMBOLOGY)

ACCEPTABLE (GREEN) = Acceptable. No deviations from the contract or the item description stock number requirements.

NO ACTION REQUIRED

MINOR NONCONFORMANCE (YELLOW) = Not fully acceptable. A minor nonconformance is a deviation from the contract or the item description stock number requirements. This minor nonconformance is not likely to materially reduce the usability or serviceability of the item for its intended purpose or affect its condition and/or the continued storage of the item for further use. Examples of minor nonconformance’s: Cataloging issues; Minor workmanship/fabrication violations; Minor weight/portion control violations; Minor deviations from packing, packaging, labeling and marking requirements that would not necessitate a regulatory market suspension or affect DLA Troop Support Indo-Pacific ability to recall the item.

ACTION REQUIRED: This nonconformance requires attention from the Contractor. Minor nonconformances may be tolerated by the customer for a short period of time (until the Contractor receives a new product at its OCONUS facility, but for no more than 30 days at CONUS locations).

MAJOR NONCONFORMANCE (BLUE) = A major nonconformance, other than critical, is a deviation from the contract or the item description stock number requirements. This major nonconformance is a deviation that materially affects or is likely to have a major effect on the serviceability, usability, condition and/or continued storage of an item for further use. Examples of major nonconformance's: Domestic source/regulatory/approved source violations; Wrong item; Grade failures or mismatch; Major workmanship/fabrication violations; Major weight/portion control violations; Item shelf life/ expiration date violations; temperature abuse, and/or other off condition that although not likely to result in hazardous or unsafe conditions, the defect and/or combination of defects materially affect the item serviceability for its intended purpose and/or prevents the performance and production of an end item/meal by the customer; and/or major deviations from packing, packaging, labeling and markings that would necessitate a regulatory market suspension or have a major effect on DLA Troop Support Indo-

Pacific’s ability to recall the product.

ACTION REQUIRED: Contractor is required to STOP ISSUE of the item, unless otherwise approved by the Contracting Officer.

CRITICAL NONCONFORMANCE (RED) = A critical nonconformance is a deviation that judgment and experience indicate consumption of the item is likely to result in hazardous or unsafe conditions for individuals. An item will receive a Red Rating if it contains a critical defect(s) that involve food safety issues such as wholesomeness, foreign material, contamination, or adulteration issues that judgment and experience indicate consumption of the item is likely to result in hazardous or unsafe conditions for individuals. Examples of critical nonconformance’s: Items with food safety concerns are those items that exhibit decomposition, contamination, foreign material, and/or other conditions that render an item unfit for human consumption.

ACTION REQUIRED: Contractor is required to STOP ISSUE of the item, immediately NOTIFY DOD CUSTOMERS, REQUEST RETURN of the item in question, and notify supplier/producer of the item (if applicable).

NOTES:

1/ MAJOR NONCONFORMANCE (BLUE) = In Contractor OCONUS locations only, the Contracting Officer may approve continue issue of the item because of location extenuating circumstances and on a case-by-case basis. This approval is dependent on the type and severity of the deviation; DLA Troop Support -FTSB’ Lead Auditor recommendation; customer approval; and if the same item and/or a substitute of equal/higher technical quality is Not-in- Stock at OCONUS location. Continue issue of the item may require and include Contractor screening/rework of the nonconforming item and follow-up Government inspection/audit to verify action taken by the Contractor (at no cost to the Government for inspection/travel costs). At CONUS/OCONUS locations, only the Contracting Officer, not the customer or the Lead Auditor, has the authority to accept items not meeting item description cited in DLA Troop Support catalogs. The rating assigned to the item WILL NOT be changed by the Lead Auditor because of acceptance with a waiver/rework/repair of the item is in question. The DLA Troop Support Food Safety Office (DLA Troop Support -FTW), at the request of the Contracting Officer, may issue a restricted (to DLA Troop Support customers only) Hazardous Food Recall for all those items originating from an unapproved source and distributed to DLA Troop Support customers worldwide.

2/ CRITICAL NONCONFORMANCE (RED) = The DLA Troop Support Food Safety Office (DLA Troop Support-FTW) will issue a Hazardous Food Recall for all critical nonconformance’s involving items with food safety concerns that render an item unfit for human consumption or may present a health hazard for DOD customers. If applicable, the Contracting Officer should suggest suppliers/producers of the item to review shipping documents to ensure the same item was not delivered to other DOD customers.

e. Audit Preparation

i. The Contractor is solely responsible for and shall bear all costs associated with the facility and the equipment/supplies utilized during the audit process. Upon receipt of the audit notification, the Contractor must promptly arrange the use of their standard product cutting room/kitchen (if suitable) or secure an alternative facility for the audit. If the Contractor's facility lacks adequate space or is unavailable, they are responsible for making alternative arrangements. The designated room must be equipped with running water, and the Contractor is accountable for the cleanup of the cutting area/room as well as continuous equipment maintenance. The Contractor is required to contact the Lead Auditor to discuss the location, facility adequacy, and equipment availability no later than 45 calendar days prior to the audit. The following equipment/personnel may be necessary:

1. Chill storage area for tempering product samples that require refrigeration (Approximately 2

Pallets)

2. Tables for conducting the audit and demonstration.

3. Sinks/wash area equipped with sanitizing soap for cleaning knives and equipment.

4. Water jet spray attachment for the sink.

5. Pans or work area in close proximity to a sink area to drain/purge from packaged product.

6. Microwave.

7. Calibrated scales – One small digital scale able to record product weights in both ounces and grams and capable of measuring down to the nearest hundredth is preferable and a set of test weights with a recommended weight range of 1.0 ounce to 1 pound; and, one scale able to record product weights for full cases with an approximate weight range of 0 -100 lb. and capable of measuring down to the nearest tenth is preferable and a 25 lbs. test weight.

8. A minimum of 10 large flat baking sheet pans, plastic trays, or some type of tubs to place thawed meats.

9. Cart to move samples around.

10. Cutting boards (two or three).

11. Large trash cans with bags.

12. Power hook-up for 3-4 computers.

13. Access to a copy machine.

14. Miscellaneous supplies: Paper towels; heavy-duty plastic bags; one box of large latex gloves;

paper flip chart/easel with markers (RED, BLUE, ORANGE, GREEN, BLACK); cellophane tape.

15. Optional but considered highly desirable: Cloth towels and floor covering to maintain clean and sanitary floor areas.

16. A camera and a person to take digital pictures during the audit may be required.

17. A copy of the pictures will be e-mailed to the DLA Troop Support Indo-Pacific auditor at the end of the audit.

NOTE: Certification/Documentation - To avoid delays/questions during the audit, the Contractor should ensure that ALL products intended for DLA Troop Support Indo-Pacific customers are derived from Approved Sources and meet the Berry Amendment requirements (unless otherwise is indicated in the contract or authorized by the Contracting Officer).

f. Audit Results

Quality audit results serve as vital performance indicators and are pivotal in conjunction with a Contractor's past performance when assessing overall performance for future procurements. DLA Troop Support Indo-Pacific sets the minimum standard for acceptable performance at 85% acceptability for each food category. Following the audit, the Contractor will receive a detailed report highlighting any deficiencies uncovered. It is incumbent upon the Contractor to promptly address any identified deficiencies and implement corrective actions to rectify both the immediate issue and the underlying system that led to the deficiency. Failure to address audit findings or implement corrective actions may result in contract termination.

g. Follow-Up Audit

Follow-up audits may be scheduled within one year of the initial audit at the discretion of the Government. Reasons for scheduling follow-up audits include, but are not limited to, failure to achieve an acceptable rating (<85%) in one or more commodities category, recurring failures, and customer complaints. All costs associated with follow-up audits, including samples, audit facility, and equipment/supplies, are the responsibility of the contractor.

Furthermore, the Contractor may be responsible for Government costs incurred during follow-up audits, such as USDA-AMS/USDC inspection costs, travel expenses, per diem, and administrative fees. During follow-up audits, only commodities categories that failed the initial audit (scoring <85%) will be assessed. Additionally, commodities with an excessive number of items not in stock (>50% of items listed in the Contractor's catalog) during the initial audit may also be subject to assessment during a follow-up.

h. Audit Failures

As noted herein, audit failures and/or failure to take corrective action will be grounds for terminating the contract. The Government may, at its discretion, take other action to address the audit failure such as, but not limited to unannounced QSMVs or follow-up audits. Such action will not constitute Government forbearance or waiver of the deficiency and will not affect the Government’s right to terminate the Contractor contract or pursue other corrective or adverse actions against the contractor.

a. Markings

i. Code Dates

1. Products, as applicable, shall be identified with readable open code dates clearly showing the Use by Date, Date of Pack (DOP), Expiration Date, Manufacturer Sell-by-Date, and/or similar marking. The contractor/packer’s product label shall clearly identify the item(s) shelf-life information (using an open code date on the exterior of each case, if required or applicable). Fresh-cut products bags must be marked with the appropriate shelf life from the Date of Production (DOP).

ii. Traceability Requirements for Contractors, Contractor’s Suppliers Re-Packaging and Re- Labeling Products

1. The contractor shall maintain or request from their suppliers/distributors documentation/certificates containing the following information: Item nomenclature, name of establishment/Grower, location, country of origin, date of production/pack (DOP), lot number, etc. If packaging of the item occurred in more than one establishment, documentation for each item must also be maintained / provided. These records must maintain traceability of the item to the extent that an item can be traced back to the original grower/packer of a product. In addition, the contractor shall maintain records of quantities and when and where the re-packaged/re-labeled item(s) were shipped.

2. The contractor must be able to show/provide DLA Troop Support Indo-Pacific Quality Audit Team the documentation for samples selected during Quality Audits or Unannounced QSMVs. It is the contractor’s responsibility to notify and ensure their suppliers understand and comply with this requirement. The above requirements are necessary in the event of a Hazardous Food Recall (i.e., ALFOODACT) of potentially hazardous product when a recall is issued by a Regulatory Agency and for the contractor to isolate suspected items in order to notify customers in an expeditious manner whenever products are rated “Red/Critical” during a DLA Troop Support Indo-Pacific Quality Audit. The above requirements serve two main purposes:

a. To protect DLA Troop Support Indo-Pacific’s customers and expeditiously notify them in case of accidental or intentional tempering/contamination and/or to prevent consumption of unsafe/hazardous Produce and

b. To maintain traceability of re-packaged/re-labeled products in order to verify country of origin, approved source requirement during the shelf-life cycle of a pre-cut/packaged product in the contractor storage and during the customer's receipt/storage of the product and be able to expedite the recall process for all suspected products intended for DLA Troop Support Indo-Pacific customers.