Attachment 1 - Big Island Non DoD Schools Ships Troops SOW .docx

STATEMENT OF WORK

I. INTRODUCTION

A. The Defense Logistics Agency (“DLA”) Troop Support Pacific (“Agency”) intends to enter into an indefinite quantity contract (“IQC”) with a commercial firm to supply a full line of United States Department of Agriculture (“USDA”) Grade Number 1 or better quality Fresh Fruits and Vegetables (“FF&V”) products to Non-Department of Defense (“DoD”) USDA School customers, Maui, in the State of Hawaii Zone. Specific quality requirements per item are included in the Schedule of Items (Attachment 2). Failure to propose the specified quality requirement per item as identified in Attachment 2 may render an offeror’s proposal technically unacceptable. If the item’s description in Attachment 2 does not provide a specific quality grade, the minimum quality grade that is required to meet the terms of this Solicitation is USDA Grade Number 1.

A successful offeror(s) will be required to source, purchase, store, and deliver a variety of FF&V items to DLA Troop Support Pacific customers on an ongoing basis, while at the same time maintaining acceptable fill rates, levels of customer service, and product quality. Therefore, an offeror must currently possess the physical, logistical, and financial resources to serve as a commercial distributor of a variety of FF&V items. It is neither sufficient nor acceptable for an offeror to be a third-party logistics (“3PL”) company (i.e. a company that does not intend to serve as the FF&V supplier but instead intends to subcontract out the majority of aspects required by the contract, including but not limited to ordering, warehousing, distribution, etc.). By offering, an offeror affirms its status as a current and functioning commercial distributor of FF&V items. In order to determine whether an offeror meets the technical requirement of being a current and functioning commercial FF&V distributor, the Contracting Officer will require an offeror to provide its current, valid Perishable Agricultural Commodities Act (“PACA”) license. In addition, the Contracting Officer will require an offeror to submit a valid Good Agricultural Practices (“GAP”)/Good Handling Practices (“GHP”) audit inspection report(s) / certificate for each place of performance identified in the offeror’s proposal. The audit report(s) must demonstrate that a passing score(s) was/were received. Please note that a request for the aforementioned information by the Contracting Officer will be used to make a determination of whether or not the offeror meets the technical requirement of being a current and functioning commercial distributor of FF&V. This information is not being sought to determine an offeror’s likelihood of success in performing the contract as would be the case in a responsibility analysis.

B. This solicitation consists of non-Department of Defense (DoD) and private non-profit school customers. Offerors are required to offer on all items in the Schedule of Items; failure to do so may result in exclusion from award consideration.

C. This solicitation is being issued as a 100% small business set-aside. In accordance with 13 CFR 121.406(e ), if at least 50% of the estimated contract value of an acquisition for multiple items is composed of items that are manufactured by small business concerns, then a waiver of the non-manufacturer rule is not required. As such, for this acquisition, it is expected that items comprising at least 50% of the contract value will be manufactured by small business concerns.

D. This solicitation utilizes the Lowest Price Technically Acceptable (LPTA) Source Selection Process. As part of this selection process, the Agency will incorporate a weighting factor in its evaluation. Said factor will only be applied for evaluation purposes to the Aggregate Distribution Price. Please refer to the Addendum to FAR 52.212-2 contained in this Solicitation for additional information about how each offeror’s price, and price components, will be evaluated.

E. Any award resulting from this solicitation will be an indefinite quantity contract (IQC) that is fixed in price subject to the applicable Economic Price Adjustment (EPA) provision. An IQC will provide for an indefinite quantity, within stated limits, of specific supplies or services to be furnished during a fixed period, with deliveries to be scheduled by placing orders with the contractor (reference FAR 16.504(a)).

F. All Fresh Fruit and Vegetable products delivered under this IQC shall be sourced domestically, no exceptions. Non- DoD USDA School Customers are allowed to utilize the resulting IQC only when they use Federal funding. Additionally, these customers shall be required to utilize Federal funding on domestic items ONLY. Non-Domestic items are not authorized using Federal funding.

II. EFFECTIVE PERIOD OF CONTRACT

A. Any resulting contract from this Solicitation will not exceed 1 years commencing on the effective date of the contract.

III. OPTIONS

A. The resultant IQC may be for a total of 1 year commencing on the effective date of the IQC contract.

B. For evaluation purposes only, the base term of the resultant IQC is 12 Months. The total length of the IQC will not exceed 12 months.

IV. ESTIMATED DOLLAR VALUE / GUARANTEED MINIMUM / MAXIMUM

A. The following chart includes the 12-month estimated dollar value for the Base Period along with the 10% guaranteed minimum and contract maximum values, respectively. Though both figures are based on estimates, the guaranteed minimum and the contract maximum are both fixed firm dollar amounts, which are calculated as a percentage of the 12 month estimated dollar values.

B. NOTE: The guaranteed minimum, which is shown in the “10% Minimum” column below, constitutes the Agency’s full legal obligation as to its ordering requirements. Once this obligation is met, there is no further ordering obligation on the part of the Agency.

Estimate (Base Period)

12 month including 6 month extension

The term “estimate” refers to the Agency’s good faith estimate of the requirement for the specific tier periods stated.

V. CONTRACT START-UP PERIOD

A. After an award is made, the Contractor (also referred to as the Awardee) will be required to take steps to implement its new contract prior to initial ordering/delivery. Within 14 days after the award is made, the Contractor shall submit a proposed implementation schedule to the Contracting Officer that details all of the necessary steps that are required to ensure proper contract performance. This may include but is not limited to catalog/ordering/invoice testing (STORES and/or FFAVORS), sourcing new items, finalize delivery schedule per customer location, etc. An additional 14 days will be granted for actual completion of the proposed schedule. No more than 30 calendar days after award, however, will be given to complete the schedule and have a fully functional distribution account in place for all customers covered under the contract(s).

VI. ELECTRONIC ORDERING CATALOGS

Offerors will be required to maintain electronic catalogs that list all items available to the customers covered under this solicitation. The catalog for Non-DoD USDA Schools customers shall be built and maintained in USDA’s Fresh Fruits and Vegetables Order Receipt System (FFAVORS) Web. Each item in the catalog shall contain the corresponding national or local stock number, Government item description, packaging characteristics, unit of issue and unit price.

A. Catalog Maintenance

1. New Items

(a) Prior to commencement of the first order, DLA Troop Support Pacific, the customer and the vendor will collaborate to identify items not found in the Schedule of Items which are to be added to the ordering catalog. Neither the vendor nor customer is permitted to add a new item to the catalog without initiating a new item request to the Contracting Officer.

(b) After ordering commencement, if a customer desires to order a Fresh Fruit and Vegetable (FF&V) item that is not part of the ordering catalog, the contractor will be allowed a maximum of twenty (20) days to source the item, obtain a stock number from DLA Troop Support Pacific (if required) and add the item to the ordering catalog via an 832-catalog transaction. These items should then become a permanent part of the contractor’s inventory, dependent upon availability, after the Contracting Officer’s determination of fair and reasonable pricing. The contractor shall utilize the Contracting Officer provided form when requesting all item approvals (additions and/or changes). The form is mandatory and is Attachment 3.

(c) The successful awardee shall assume the responsibility of introducing new produce items to the customers, as well as showing cost effective alternatives to their current choices.

2. Catalog Pricing

(a) Schedule of Items Pricing: Items priced in the Schedule of Items (SoI) (See Attachment 2) will be included in the ordering catalog following award. Schedule of Items will be determined fair and reasonable prior to award. The final proposed price for each item in the Schedule of Items will be the catalog price during the first week of customer ordering.

(b) Reverse Auction: The Contracting Officer may utilize reverse auctioning to conduct price discussions. If the Contracting Officer does not conduct a reverse auction, award may be made on initial offers or following discussions. If a reverse auction is going to occur offerors will be notified by the Contracting Officer and provided additional instructions at that time. For information on registering for a reverse auction see Attachment 7.

(c) Contractor-Requested Catalog Price Changes: Upon award, all items included in the Solicitation’s Schedule of Items that ultimately are included in the ordering catalogs have been deemed “fair and reasonable” from a pricing standpoint by the Contracting Officer. No further analysis is necessary with regard to those prices until said prices are subject to change per a request by the Contractor under the terms of the EPA provision. In accordance with said provision, a Contractor is permitted to submit a biweekly adjustment request for any items found on the catalog when consistent with actual price changes of said items encountered by the Contractor as reflected in the commercial market. When such a request occurs, the Contracting Officer is required to make an entirely new “fair and reasonable” determination of that item’s new requested price. Prices are to be adjusted downward or upward, as appropriate, according to “last receipt” price, as defined under the EPA terms of this solicitation. If the new requested price cannot be found “fair and reasonable” by the Contracting Officer, the last approved price will remain effective for purposes of the ordering catalog and the Contractor shall continue support of that item(s) for Agency customers the following week and beyond until a new “fair and reasonable” price is approved. The Contracting Officer’s failure to approve a Contractor’s request for a weekly adjustment of a price will NOT result in the automatic removal of the corresponding item from the following week’s ordering catalog. In a circumstance where an item’s price is “held over” from a prior week, having not been adjusted due to the Contracting Officer’s rejection of a subsequent weekly price adjustment request (i.e., newly proposed price cannot be determined “fair and reasonable”), it is expected that the terms of the EPA provision continue to be strictly adhered to. It is unacceptable, and a breach of said terms, if a Contractor uses a “held over” price to overcharge the Government at a point when that price exceeds the item’s true price as paid by the Contractor in its business, which reflects commercial market conditions for that item. Therefore, in the “held over” scenario as described above as well as all scenarios encountered during contract performance, price decreases are expected when and where applicable. Please note that the Contracting Officer has wide discretion in managing the above-described processes and resolving any resulting issues.

(d) Contractor-Requested Catalog Additions: Before an item is added to the catalog vendors are required to submit to the contracting officer a request of proposed catalog additions (See Attachment 3). The request shall include the stock number, Government item description, proposed unit price and a corresponding supplier invoice or quote, and proposed distribution price. The request is due by 9:00 AM HST on the Monday prior to inclusion of the Wednesday catalog updates. Please note that meeting this deadline does not guarantee that the item’s price will be approved as “fair and reasonable”, nor does it mean that the Contracting Officer will have been able to complete his/her review of the request prior to the time necessary to incorporate it into the following week’s ordering catalog. The contracting officer will review the catalog addition request and upon determining the price fair and reasonable will contact the contractor to indicate acceptance. The contractor shall then include the item on Wednesday’s catalog update. Should the proposed price fail to be determined fair and reasonable, the contracting officer will conduct negotiations with the vendor. If after negotiations the proposed pricing still cannot be determined fair and reasonable the item will not be added to the catalog.

(e) Pricing Requirements: The Contractor’s catalog prices, as awarded, constitute the initial catalog prices. These prices are in effect during the first ordering week (from Sunday at 12:00 AM (Eastern Time (ET), standard or daylight as applicable) through 11:59 PM on the Saturday of the following week. The prices shall remain in effect for all subsequent ordering weeks, except as otherwise adjusted in accordance with the EPA provision.

VII. ECONOMIC PRICE ADJUSTMENT (“EPA”) – ACTUAL MATERIAL COSTS

FOR SUBSISTENCE FRESH FRUITS & VEGETABLES (“FF&V” or “Produce”)

A. Warranties. For any items covered by this EPA language, the Contractor warrants that:

1. Contract Unit Price and the components of the Contract Unit Price, i.e., Delivered Price and Distribution Price, shall not include allowances for any portion of the contingency covered by this language; and

2. Price adjustments requested during the performance of the contract shall be computed in accordance with the provisions of this language.

B. Definitions. As used throughout this language the term:

1. “Contract Unit Price” means the total price per unit of a particular item charged to the Government for a product delivered to customers under this contract. The Contract Unit Price consists of two separate and distinct components: 1) Delivered Price, less Rebates/Discounts, and 2) Distribution Price. The unit price sum of these two components shall be rounded up or down to the nearest cent, to determine the Contract Unit Price.

2. “Delivered Price”

(i) “Delivered Price” means the commercial manufacturer, grower, or private label holder price per unit charged to the Contractor, inclusive of standard freight to the Contractor’s facility/facilities, for the purchase of a representative quantity of the item as compared to orders under this contract. Delivered Price is the manufacturer, grower, or private label holder price that is input into the Contractor’s purchasing system as the starting basis for its pricing to customers prior to applying or deducting any additional costs or expenses, such as distribution, overhead, profit, rebates/discounts, or other costs/expenses stemming from separate financial arrangements. Delivered Price shall be substantiated with an actual invoice paid by the Contractor. In limited circumstances, quotations may be used to substantiate a Delivered Price, but only with specific approval of the Contacting Officer. The Delivered Price shall not include costs to be included in the Distribution Price.

(A) Redistributor Exception: On a case-by-case basis, for a specific item or stock keeping unit (“SKU”), a contiguous United States (CONUS) redistributor’s most recent commercial price per unit, inclusive of standard freight to the Contractor’s facility/facilities to the Contractor of a representative quantity of product as compared to orders under the contract may be used to establish Delivered Price. A redistributor’s commercial price may only be used to establish Delivered Price when the redistributor’s price for the quantity ordered is equal to or lower than a manufacturer’s, grower’s, or private label holder’s current market price for a representative quantity of product inclusive of rebates/discounts. The Contracting Officer must specifically approve the use this exception. When seeking approval for the use of this exception, at a minimum, the Contractor must supply invoices from the redistributor. Quotes from the redistributor are unacceptable. Additional supporting documentation (e.g., published price list, manufacturer letter, or similar proof of price comparison) may be required. The determination of whether the supporting documentation offered is sufficient to establish a manufacturer’s, grower’s, or private label holder’s current market price, as well as the decision to permit the use of this exception, rests solely with the Contracting Officer.

3. “Distribution Price(s)” means the firm-fixed price portion of the Contract Unit Price, offered as a dollar amount per unit of issue, rounded up or down to the nearest cent. The Distribution Price component includes all costs associated with the Contractor’s performance that are not included in the Delivered Price, including, but not limited to: human resources, insurance, special packaging, overhead, profit, transportation from the Contractor’s facility or other place of performance to the end customers, split-case fees, ancillary in-house processing fees, subcontractor costs, etc.

4. “Grower” means the business concern that raises produce for marketing.

5. “Manufacturer” means the business concern that, with its own facilities, performs primary activities of processing or transforming agricultural products into the end item being acquired.

6. “Ordering Catalog” means the electronic listing of items and Contract unit prices available for ordering under this contract.

7. “Ordering Week” means from Sunday at 12:00 AM (Eastern Time (ET), standard or daylight as applicable) through 11:59 PM on the Saturday of the following week.

8. “Private Label Holder” means:

(i) A manufacturer or grower with whom the Contractor holds an ownership and/or financial interest, or ownership and/or financial interest in a specific item(s) produced by a manufacturer or grower;

(ii) An entity holding an intellectual property interest, whether by ownership or license, in the label under which product is being sold in the commercial marketplace; or

(iii) An entity holding exclusive marketing and/or sales authority of a product, or one holding property rights in a proprietary product formula.

9. “Rebates/Discounts” means all rebates, discounts, product allowances, food show discounts, early payment discounts (other than qualifying early payment discounts as may be defined elsewhere in this contract), and any other rebates, discounts, economic incentives, or similar financial arrangements available at the manufacturer, grower, private label holder, or redistributor level that ultimately reduces the Contractor’s price paid for a product supplied under the contract. In accordance with this language as well as other provisions of this contract, and subject to any applicable exceptions, all rebates/discounts shall be passed on to the Government via a reduced catalog price for the item to which the rebates/discounts pertain (i.e. “off invoice”). Any rebates/discounts that cannot be applied as an up-front price reduction must be submitted to the Contracting Officer via check payable to the U.S. Treasury, with an attached itemized listing of all customer purchases by line item, including contract number, call number, purchase order number and contract line item number (“CLIN”).

10. “Redistributor” means an entity independent of the contractor that operates in the existing commercial marketplace and from which the contractor purchases product for purposes of consolidating quantities and/or obtaining lower delivered prices. Examples may include: brokers, dealers, distributors, and buying groups.

11. “Standard Freight” means the published list price or prevailing market rate for transportation of items ordered under this contract from the manufacturer, grower, private label holder, or redistributor (when the Redistributor Exception applies) to the Contractor’s facility/facilities. Standard Freight must be documented in an invoice; however, quotes may be an acceptable form of substantiation in limited circumstances and if authorized by the Contracting Officer. Standard freight may include certain ancillary costs associated with transportation which are consistent with commercial practice in the produce industry, including, but are not limited to, pallets, temperature recording devices, Tectrol, etc.

(i) In the event that the Contractor picks up its own product directly from a manufacturer, grower, private label holder, or redistributor (when the Redistributor Exception applies) on an F.O.B Origin basis, or arranges for delivery transportation from a third party source other than the manufacturer, grower, private label holder, or redistributor (when the Redistributor Exception applies), the standard freight cost shall be based on market tariffs/conditions and consistent with prevailing market rates. At no time shall that cost exceed the manufacturer’s, grower’s, private label holder’s, or redistributor’s, or such entity’s carrier’s freight price normally payable by the Contractor for inbound shipments of such products and quantities to the Contractor’s facility(ies).

C. Price adjustments.

1. General.

(i) All Contract Unit Prices shall be fixed and remain unchanged until changed pursuant to this language or other applicable provision of the contract. Only the Delivered Price component of the Contract Unit Price is subject to adjustment under this section. After the first ordering week, if the Contractor’s Delivered Price changes for any or all Contract Unit Prices, the Contract Unit Price shall be changed in the next week’s ordering catalog upon the Contracting Officer’s approval of the Contractor’s request, which must be submitted in accordance with paragraph (iii) below, by the same dollar amount of the change in the Delivered Price, subject to the limitations in paragraphs C.2 and D, below. Any price changes approved by the Contracting Officer shall become effective at the beginning of the next ordering week. All ordering catalog unit prices computed in accordance with this section and in effect when an order is placed shall remain in effect for that order through delivery. DLA Troop Support will be charged the Contract Unit Price in effect at the time the order is placed, regardless of any changes in the Contract Unit Price occurring before delivery or in any subsequent ordering week.

(ii) Delivered Prices included in the catalog shall equal the Contractor’s last receipt price for the item as reflected in an invoice (or quote in limited circumstances) for a representative quantity compared to typical Government purchases. For the purpose of the contract catalog, the “last receipt price” means the price of the product charged on the most recent invoice at the time the price change is requested. For example, if by Wednesday (i.e. the day price change requests are due to the Contracting Officer) the Contractor had recently received two invoices for the product in question, one on Monday and one on Tuesday, then the most recent invoice is the one from Tuesday (assuming it contains a representative quantity as described above). It is important to note that a Delivered Price must in almost all cases be justified using an invoice as described in this paragraph. Use of a quote is only permitted in extremely limited circumstances, such as when an item has not been purchased before by the Contractor or the price of the item is stale due to seasonality and other similar issues. Outside of those limited circumstances, which will be reviewed and approved by the Contracting Officer on a case-by-case basis, a Delivered Price will not be substantiated by using the price of an item that is the latest to arrive at the Contractor’s facility but does not yet have an invoice to support it. Ultimately, the invoice (or quote in limited circumstances) justifying the Delivered Price request is subject to review by the Contracting Officer at the time the request is made.

(iii) Updates to the Delivered Price: All notices and requests for new item Delivered Prices and price changes shall be submitted bi-weekly, no later than 9:00 a.m. Hawaii Standard Time on Tuesday to be effective in the following week’s ordering catalog. Invoices submitted to support price change requests shall also identify all rebates/discounts that will be subtracted from the requested delivered prices when calculating the revised contract unit prices that would go on the catalog. The Contractor shall notify the Contracting Officer of its notice/request in the form of an electronic data interchange (“EDI”) 832 transaction set when using STORES or an update to FFAVORS web. The change notice shall include the Contractor’s adjustment in the Delivered Price component of the applicable Contract Unit Price. Upon the Contracting Officer’s acceptance of such EDI 832/FFAVORS Web price changes in accordance with paragraph (v) below, the price change transaction sets will post in the next week’s ordering catalog and each Contract Unit Price shall be changed by the same dollar amount of the change in the Delivered Price in the next week’s ordering catalog.

(iv) All price changes, and catalog contract prices, are subject to review by the Government. The Contracting Officer may, at any time, require the submission of supporting data to substantiate any requested price change or the requested continuation of the pre-existing price for any item, including prices applicable to prior ordering weeks. Upon notice from the Contracting Officer that supporting data is required, the Contractor shall promptly furnish to the Government, all supporting data, including, but not limited to, invoices, quotes, price lists, documentation regarding rebates/discounts, and any other substantiating information from the Contractor and any and all of its suppliers in the supply chain, including the manufacturer, grower, private label holder, or redistributor.

(v) Price change requests that the Contracting Officer questions or finds to be inconsistent with the requirements of this provision shall not be posted until the Contracting Officer specifically authorizes the posting. If the Contracting Officer does not notify the Contractor by 9:00 a.m. Hawaii Standard Time each Thursday that a price or a price change request is being questioned or has been found to be erroneous, the price change(s) will post to the ordering catalog effective the beginning of the following ordering week. The posting of updated prices in the ordering catalog, calculated in accordance with this section, constitutes a modification to this contract. No further contract modification is required to effect this change. Any changes that post to the ordering catalog do not constitute a waiver of any of the rights delineated elsewhere in the Solicitation, any resulting contract(s), or otherwise by law or regulation.

(vi) Should the Contracting Officer determine that, or question whether, a price change request contained an erroneous Contract Unit Price or price change, or cannot otherwise determine the changed price(s) to be “fair and reasonable,” such as when the changed price(s) is(are) higher than delivered prices for items of comparable quality which are reasonably available to the Government or Contractor from other sources, the Contracting Officer will so advise the Contractor, prior to 9:00 a.m. Hawaii Standard Time on Thursday. If the Contracting Officer cannot determine a price fair and reasonable, and the Contracting Officer and the Contractor cannot negotiate a fair and reasonable price, the Contracting Officer may reject any price change and direct, in writing, that the item in question be retained on the catalog at the most recent previously approved price consistent with current market conditions. In the alternative, the Contracting Officer may authorize the removal of an item.

(vii) In the event of a price change not posting or an ordering catalog Contract Unit Price not computed in accordance with this section, resulting in an incorrectly increased or decreased Contract Unit Price, upon discovery of such occurrence the Contractor shall immediately notify the Contracting Officer in writing and promptly thereafter correct its ordering catalog. In the event of an erroneous price increase in the ordering catalog, the Contractor shall submit a refund, including interest if applicable, for any amounts paid to the Contractor resulting from the erroneous price. In the event of an erroneous price decrease in the ordering catalog, the Contractor may submit a request for an equitable adjustment in the amount of the undercharge for consideration by the Contracting Officer. The request may be entertained if the Contractor can demonstrate to the satisfaction of the Contracting Officer that the error did not result from the fault or negligence of the Contractor.

The Contractor will not be entitled to reimbursement if the undercharge was the fault or negligence of the Contractor.

2. Limitations. All adjustments under this section shall be limited to the effect on Contract Unit Prices of actual increases or decreases in the Delivered Prices for material. There shall be no upward adjustment for—

(i) Supplies for which the Delivered Price is not affected by such changes;

(ii) Changes in the quantities of materials; and

(iii) Increases in Contract Unit Prices that the Contracting Officer determines are computed incorrectly (i.e. not adhering to the Contract Unit Price definition in this provision) and/or increases in Contract Unit Prices that the Contracting Officer determines are not fair and reasonable.

D. Upward ceiling on economic price adjustment. The aggregate of Delivered Price increases for each item under this section during the entire contract period shall not exceed 90% for Department of Defense (DoD) Troop and 90% for United States Department of Agriculture (USDA) School, of the initial contract Delivered Price, except as provided below:

1. If at any time the Contractor has reason to believe that within the near future a price adjustment under the provisions of this language will be required that will exceed the Delivered Price ceiling for any item, the Contractor shall promptly notify the Contracting Officer in writing of the expected increase. In the event that the latest actual market price for an item does result in a Delivered Price that exceeds the allowable ceiling price under the contract, the Contractor shall immediately notify the Contracting Officer in writing or via its EDI 832/FFAVORS Web price change request no later than the time specified in paragraph C.1.(iii), above. With either such notification, the Contractor shall include a revised ceiling that the Contractor believes is sufficient to permit completion of remaining contract performance, along with appropriate explanation and documentation as required by the Contracting Officer.

2. The price change shall be posted for the following week’s ordering catalog. If an actual increase in the Delivered Price would raise the price for an item above its current ceiling, and the Contracting Officer and Contractor cannot negotiate a fair and reasonable price below the ceiling or if the Contracting Officer does not issue a contract modification to raise the ceiling, the Contracting Officer may reject the price change and direct that the item be retained on the contract at the last approved price. If the Contracting Officer decides to retain the item, the contractor shall continue to perform with the item at the last approved price. In the alternative, the Contracting Officer may authorize the removal of an item. The decision regarding whether to modify the contract, retain the item, or remove the item rests solely with the Contracting Officer.

E. Downward limitation on economic price adjustments. There is no downward limitation on the aggregated percentage of decreases that may be made under this section.

F. Price Audit. The Contracting Officer may require the Contractor to submit invoices and other documentation from all subcontractors at all periods and/or all suppliers or persons in the Delivered Price supply chain, up to and including the grower, manufacturer, and/or redistributor, for the purpose of confirming Delivered Prices charged to the Government, as well as to substantiate all rebate/discounts applicable to orders under the contract. In performing the price audit, the Government shall have the right to examine books, records, documents and other data, to include commercial sales data, that the Contracting Officer deems necessary to verify Contractor adherence to the provisions of this section and any other terms and conditions of the contract. Such price audits may occur up to twice a year (except as provided for below) until the end of 3 years after the date of final payment under this contract or the time periods specified in Subpart 4.7 of the Federal Acquisition Regulation (“FAR”), whichever is earlier. In addition to price audits, the Government may conduct additional examinations of records, as required by the Contracting Officer to ensure contract compliance.

G. Final invoice. The Contractor shall include a statement on the final invoice for each order that the amounts invoiced hereunder have applied all decreases required or authorized by this section.

H. Disputes. Any dispute arising under this section shall be determined in accordance with the “Disputes” clause of the contract.

VIII. REBATES/DISCOUNTS AND PRICE-RELATED PROVISIONS (COMPONENT PRICE MODEL FOR PRODUCE)

A. Terms used in this provision shall have the same definition as those included in Economic Price Adjustment (EPA) language, included herein.

B. Rebates/Discounts

1. All NAPA discounts, food show discounts, early payment discounts (except Qualifying Early Payment discounts discussed herein), and other discounts, rebates, allowances, economic incentives, financial arrangements, or other benefits, which reduce the Contractor’s price paid for products supplied under this contract or which are otherwise attributable to products sold under this contract, shall be passed to the Government via a reduced catalog price. Any Rebates/Discounts that cannot be applied as an up-front price reduction must be submitted via check payable to the U.S. Treasury, with an attached itemized listing of all customer purchases by line item, including contract number, call number, purchase order number and contract line-item number (“CLIN”). Instructions for identifying discounts, rebates, allowances or other economic incentives or benefits that shall be provided to the Government or retained by the contractor are set forth in the submission requirements in the Business Proposal/Pricing and in the Reports section of the Statement of Work.

2. The contractor shall employ prevailing commercial methods in the pursuit of discounts, rebates, allowances or other economic incentives or benefits for the Government throughout the period of performance of this contract.

3. The contractor may retain Qualifying Early Payment discounts that meet the following conditions:

(i) The Early Payment discount is an incentive to encourage payment earlier than the normal payment due date;

(ii) The Early Payment discount is consistent with commercial practice;

(iii) The Early Payment discount is routinely given by the manufacturer, grower, private label holder, or redistributor to their customers, other than the Contractor, at the same discount rate and under the same conditions as provided to the Contractor;

(iv) The Early Payment Discount is not established, requested, or negotiated for the purpose of avoiding giving DLA Troop Support a lower cost or application of a rebate/discount resulting in a higher invoice price;

(v) The Early Payment discount is no more than 2 percent of the manufacturer’s, grower’s, private label holder’s, or redistributor’s invoice and the early payment is required within 10 days to obtain the discount; and

(vi) The contractor actually made the required payment within the time period required to receive the discount.

4. The Government may require the contractor to submit invoices and other documentation from all subcontractors (as defined in FAR Part 44.101) and/or any entity in the delivered price supply chain to substantiate or identify any Rebates/Discounts. If the Contracting Officer determines, after reviewing an invoice or other documentation, that a Rebate/Discount should have been, but was not, passed on to the Government, the Government shall be entitled to a refund in the amount of the overcharges, inclusive of interest. If the Contractor believes it erroneously credited a rebate/discount to the Government, Contractor may submit a request for an equitable adjustment for the amount of the undercharge. The request may be entertained if the Contractor can demonstrate to the satisfaction of the Contracting Officer that the error did not result from the fault or negligence of the Contractor. The Contractor will not be entitled to reimbursement if the undercharge was the fault or negligence of the Contractor.

5. The Contracting Officer, and/or authorized representative(s), shall have the right to examine and audit the Contractor's records relevant to pricing under the contract, including records related to the existence and proper accounting of rebates, discounts, etc. The Government may also review/audit the Contractor’s electronic purchasing system to confirm that the Delivered Price of a product sold to the Government is accurate.

6. Failure on the part of the Contracting Officer to identify non-compliance with this provision or to challenge the Contractor’s erroneous interpretation of this provision shall not constitute waiver or a defense against the Government’s entitlement to any of Rebates/Discounts or any other remedies afforded by this section, the contract, or other applicable laws and regulations.

IX. DOMESTIC NON-AVAILABILITY DETERMINATION – FRESH FRUITS AND VEGETABLES

A. A Class Domestic Non-Availability Determination (“DNAD”) for Federal Supply Class 8915, Fresh Fruits and Vegetables (FF&V), dated 16 May 2008 was approved and is in effect for the DLA Troop Support/DLA Produce Long-Term Contracts. This DNAD establishes a limited Berry Amendment waiver to the requirements of DFARS 252.225-7012, Preference for Certain Domestic Commodities, which is applicable to this Solicitation. As a result of the DNAD, non-domestic FF&V may be supplied under this contract when domestic FF&V of satisfactory quality and sufficient quantity cannot be procured as and when needed at U.S. market prices. This determination will remain in effect until these circumstances have changed and the DNAD is formally rescinded.

B. The instant DNAD as applied affects resulting contracts supporting Department of Defense customers (i.e., Troops) only.

C. Notwithstanding this DNAD, the USDA requires that fresh produce supplied via its Federal Entitlement for the USDA School Lunch Program must be from a domestic source. Therefore, the aforementioned DNAD does not impact or negate the Government’s requirement for domestic produce in its contracts supporting Non-Department of Defense customers (i.e., Schools).

X. ADDITION OF NEW CUSTOMERS

A. Adding Customers within the Contract’s Geographic Distribution Region/Zone:

1. After contract award, there may be instances when new customers request support of their fresh produce requirements. Additional DoD and/or Non-DoD federal government customers that request DLA Troop Support produce support may be added to the contract without any new acquisition or competition process, if the customer(s) is/are within the geographic distribution region/zone covered by this contract.

2. The decision as to whether a potentially new customer is within the contract region or zone and, thus, will be added to the contract without further competition and at the existing contract prices, shall be the sole decision of the DLA Troop Support Contracting Officer.

3. Pursuant to the above, the Contracting Officer will instruct the contractor to include the customer(s) at the effective contract prices applicable to that distribution zone/region.

B. Adding Customers outside the Contract’s Geographic Distribution Region/Zone:

1. This provision applies to the following customers:

(a) A new DoD or Non-DoD federal customer that is deemed by the Contracting Officer to be outside the contract’s geographic distribution region/zone.

(b) An existing DoD or non-DoD federal customer that is deemed by the Contracting Officer to be outside the contract’s geographic distribution region/zone but has been previously supported on a separate contract covering a geographic distribution region/zone.

2. The customers described in paragraph B.1., above, and their produce requirements, may be added to any contract resulting from this solicitation as follows:

(a) In the judgment of the Contracting Officer, the customer(s) at issue is/are located in an area that is considered adjacent or proximal to the geographic distribution region/zone of the resulting contract. In a circumstance where the customer is located in an area that is adjacent or proximal to multiple existing produce contracts, the decision of which contract is most satisfactory to the Government for purposes of adding the customer(s) will be the sole decision of the Contracting Officer, taking into consideration numerous factors, including but not limited to those contained in this provision. Further, to that end, it is the Contracting Officer’s sole decision as to which existing contractors available in the aforementioned region/zone(s) will be solicited for the support of the customer(s).

(i) The Contracting Officer will request complete price proposals to support the subject new customer(s), to include distribution and delivered prices. Prior to any customer being added to the resulting contract, the Contracting Officer shall determine all proposed prices to be fair and reasonable. To this end, negotiations may be required, in which the same processes and procedures contained within the instant solicitation may be employed.

(b) In the judgment of the Contracting Officer, the customer(s) at issue is/are not located in an area adjacent or proximal to the geographic distribution region/zone of the resulting contract, and/or the anticipated customer requirement is insubstantial, the customer(s) will not be added.

C. Under no circumstance may the resulting contract’s maximum dollar value be exceeded with the addition of any customer(s) and its respective produce requirements

XI. CUSTOMER SERVICE

A. Troop, USDA, and other customers conduct periodic food menu boards and similar meetings that the Contractor may be required to attend. At these meetings, the customers typically review their internal business practices and may request that the Contractor show new products, demonstrate produce preparation, and/or provide nutritional information.

B. The Contractor shall provide at least one full-time Customer Service representative to maintain continuous contact with all of the ordering customers, as well as at least one back-up representative.

C. As an industry expert, the Contractor shall assume the responsibility of introducing new FF&V items to the customers, as well as to show cost-effective alternatives to their current choices, if the customer so desires. (For procedures to add items, see New Items paragraph under the Section VI. Electronic Ordering Catalogs.) However, the decision as to which items are ultimately included in the Ordering Catalog are at the discretion of the customer(s) and the Contracting Officer.

XII. ORDERING SYSTEMS

A. Fresh Fruits and Vegetable Order Receipt System (“FFAVORS”): USDA customers (School customer) will utilize the FFAVORS Web catalog as applicable. The Contractor, upon award, will be provided a User ID and password to Log in and receive orders through FFAVORS Web, a web-based ordering system. The Contractor is responsible for establishing and maintaining the FFAVORS WEB catalog in accordance with the FFAVORS Web Manual (Attachment 5).

1. Accessed via the Internet. FFAVORS WEB is the Government’s ordering system for USDA Customers. It is capable of accepting orders from the schools.

2. Customers will be able to order all of their requirements through FFAVORS WEB.

The system will transmit orders to the Contractor and DLA-Troop Support.

3. In the event that the FFAVORS WEB system is not operational, the Contractor must provide alternate ways for the customer to order (e.g., by fax, by phone, pick up orders). Be aware that even in this situation, however, it is mandatory that the Contractor subsequently place the same order through FFAVORS when it becomes operational again in order to effect obligation/receipt/payment.

XIII. ORDER PLACEMENT, LEAD TIME, and ADJUSTMENTS/CANCELLATION OF

ORDERS

A. The minimum order requirement for any resultant contract is $100.00. This requirement shall be based on the aggregate total of orders for a specific delivery date to all customers located within a particular military base or delivery location.

B. School customers shall place their orders to accommodate at a minimum a 4-day lead time. For example, an order placed on Monday, September 1st would have a required delivery date of Friday, September 5th. See Attachment 4 Delivery Schedule.

C. All invoice pricing will be based upon the Contract Unit Price at time of order by the customer(s). Therefore, for any item ordered on a Friday to be delivered the following week, pricing will be based upon the catalog price in effect the day of order (Friday in this example), regardless of whether the unit price for that item subsequently changes as part of the next week’s catalog updates.

D. Once submitted through the applicable electronic ordering system (i.e. STORES or FFAVORS), an order may be cancelled by a customer up to 24 hours before scheduled delivery via written notification to the Contractor and the Contracting Officer. Within less than 24 hours from delivery, an order may be cancelled by mutual agreement between the customer and the Contractor. In the event of an act of God, such as extreme weather, the specific situation regarding a cancelled delivery will be dealt with in an equitable manner by the Contracting Officer, who has the ultimate authority and discretion to resolve said issues.

F. Adjustments – For procedures discussing adjustments to order, refer to Attachment 5 (FFAVORS manuals).

XV. REPACKAGING & SPLITTING OF CASES

A. For some items, DLA customers, particularly School, may require smaller pack sizes than are commonly available in the commercial marketplace. Such items are included in the instant Schedule of Items and may be added at a later date during contract performance. It is incumbent on the Contractor to determine how it will supply these items in accordance with the required pack sizes. In so doing, the Contractor may decide to split cases and repackage product at its own facility.

B. Splitting cases and repackaging product, as described in the preceding paragraph, do not constitute processing, and, therefore, do not meet the conditions of a private label holder, as defined in Section VII. Accordingly, the Contractor is prohibited from including any costs associated with its own in-house splitting of cases and repackaging product in the Contractor’s Delivered Price. Instead, the costs associated with in-house splitting cases and repackaging product must be included in the Contractor’s Distribution Price.

XVI. PACKAGING, PACKING, LABELING, AND MARKINGS

A. All labeling, packaging and packing shall be in accordance with good commercial practice. Shipping containers shall comply with the National Motor Freight Classification and Uniform Freight Classification Code.

B. To ensure that the carrier and the receiving activity properly handle and store items, standard commercial precautionary markings such as “KEEP REFRIGERATED” shall be used on all cases when appropriate.

C. Protection during inclement weather is required. All products that are susceptible and sensitive to temperature must be protected by any means to prevent damage.

XVII. DELIVERY INSTRUCTIONS

A. Contractors shall ensure all products are delivered in sanitary trucks that are of a commercially acceptable standard. All delivery trucks must be equipped with a lift gate to expedite the offloading of products. Trucks shall maintain proper temperatures in accordance with standard commercial practices. Deliveries shall be FOB Destination to all delivery points. Delivery will be completed when the Contractor has unloaded the order(s) from the vehicle and placed them on the dock, and customer receiving personnel has accepted the delivery ticket, in accordance with Section XVIII below. All items will be delivered to customer locations free of damage and with all packaging and packing intact. The Contractor shall remove all excess pallets used for delivery from the delivery point. See Attachment 4 Delivery Schedule.

B. Customers’ delivery schedules (days and times), routes, and stop-off sequences will be coordinated and verified with the customers on a post-award basis by the Contractor immediately following award and on an annual basis as required.