Attch_3_SOW_Kauai_FFV.docx

STATEMENT OF WORK (SOW)

I. INTRODUCTION

A. DLA TROOP SUPPORT INDO-PACIFIC intends to enter into an Indefinite Delivery, Indefinite Quantity (IDIQ) contract with a commercial firm to supply a full-line of USDA No.1 or better Fresh Fruit and Vegetable (FF&V) products to both Non-DoD USDA (“Schools”) customers and Department of Defense (“DoD”) customers on the Island of Kauai, in the State of Hawaii. Specific quality requirements per item are included in the Schedule of Items Attachment 1. Failure to propose the specified quality requirement per item as identified in Schedule of Items may render an offeror’s proposal technically unacceptable. If the item’s description in Attachment 1 Schedule of Items 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 INDO-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. The aforementioned Kauai zone is comprised of (2) Groups in the area described above. Group 1 consists of Non-DoD USDA School customers and Group 2 consists of DoD Troop customers. See Attachment 2 – Customer List for details. The Agency intends to award one contract. Offerors must submit a proposal for both Groups. The offeror must support all of the customers in all the Groups for which they make an offer. Offerors are required to propose on all items in the Schedule of Items for all the Groups. Failure to do so may result in its proposal being deemed technically unacceptable and therefore excluded from further consideration for award. Because the Contracting Officer is not obligated to initiate negotiations, each offeror shall submit its most competitive proposal for both Groups. Said proposal shall be responsive to all of the Solicitation’s requirements and free from any deficiencies.

C. This solicitation is being issued as 100% small business set-aside under full and open competition procedures. NAICS is 311991 and size standard is 500 employees. A waiver of the Non-Manufacturer rule has not been requested for this acquisition because it is an acquisition for multiple items. 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. The contracting officer must be immediately notified if it appears as though this requirement will not be met.

D. This solicitation utilizes the Lowest Price Technically Acceptable (LPTA) Source Selection Process. It contains one (1) 24-month base and two (2) 18-month tier periods. The length of the contract is sixty (60) months (5 years) including all base and tiers. 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 IDIQ that is fixed in price subject to the applicable Economic Price Adjustment (“EPA”) provision. For additional information regarding the EPA, refer to Section VII of the scope. An IDIQ will provide for an indefinite delivery, 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. For Schools (Group 1): All Fresh Fruit and Vegetable products delivered under this Group shall be sourced domestically, no exceptions. Non-DoD USDA School Customers are allowed to utilize the resulting IDIQ only when they use Federal funding.

II. EFFECTIVE PERIOD OF CONTRACT / TIERS

A. The resultant IDIQ may be for a total of 5 years (one [24 month] base period plus two [18 month] tier period) commencing on the effective date of the IDIQ contract. The base period will include a start-up period, see paragraph IV. CONTRACT START-UP PERIOD

Performance Period: Total 5 years without option periods Tier 1 - 03/02/2023 - 03/01/2025 (24 month period) Tier 2 - 03/02/2025 - 09/01/2026 (18 month period) Tier 3 - 09/02/2026 - 03/01/2028 (18 month period)

B. For evaluation purposes only, the base term of the resultant IDIQ (24 Months), and the term of any tier (18 Months), if exercised under the IDIQ, will not exceed 36 months for the tier periods. The total length of the IDIQ will not exceed sixty (60) months.

C. Exercising of a tier is not automatic and depends upon such conditions as acceptable vendor performance in meeting contract specifications and verifying an ongoing demand for this requirement.

D. There are two (18 month) tier periods in this solicitation. Acceptance of these tiers is mandatory. Distribution Prices (see Economic Price Adjustment (EPA) Clause), must be submitted for each tier period, as well as for the base period. The Distribution Prices offered on each tier period will be calculated with the Delivered Price (see Economic Price Adjustment (EPA) Clause), proposed for each evaluated item. The Distribution Price for each tier period may be offered as a dollar value, increase or decrease, from the base period. Changes expressed as a percentage will not be accepted.

E. Failure to propose an increase or decrease of distribution prices in the tier periods will be considered, and evaluated as, no change per tier period.

III. ESTIMATED DOLLAR VALUE / GUARANTEED MINIMUM/MAXIMUM

A. The following chart includes the 24-month estimated dollar value for Base Period, and the overall 5-year period, along with the $40,000 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 24-month and 5-year estimated dollar values, respectively.

B. NOTE: The guaranteed minimum, which is shown in the “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 regardless of what period said obligation is met within performance period.

Customer: Non-DoD Schools & Troops/Ships Customers in Kauai, Hawaii

24 month Estimate (Tier 1): $1,600,000.00

Guaranteed Minimum: $40,000.00

Maximum Ceiling Amount: $4,000,000.00 for the entire 5-year period.

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

IV. CONTRACT START-UP PERIOD

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 15 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 FFAVORS), sourcing new items, finalize delivery schedule per customer location, etc. An additional 15 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). The timeline for the “start-up” period, as described above, is included in the first 24-month base period.

V. ELECTRONIC ORDERING CATALOGS

An offeror that receives an award will be required to maintain electronic catalogs that list all items available to the customers covered under this solicitation. These catalogs will be either STORES (for Troop catalog) or FFAVORS (for Schools catalog). Each item in the catalog shall contain the corresponding national or local stock number (as appropriate), Government item description, packaging characteristics, unit of issue, and unit price. STORES and FFAVORS manuals are available electronically.

A. Catalog Maintenance

1. New Items

(a) Prior to commencement of the first order, DLA TROOP SUPPORT INDO-PACIFIC, the customer and the contractor will collaborate to identify items not found in the Schedule of Items which are to be added to the ordering catalog. This effort is limited in its scope but necessary to update the catalog with items that were not required previously due to seasonality and other contingent circumstances unknown to the Contracting Officer at the time of solicitation. Neither the contractor nor customer is permitted to add a new item to the catalog without initiating a new item request to the Contracting Officer, which requires a separate fair and reasonable price analysis per item.

(b) After ordering commencement, if a customer desires to order a 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 INDO-PACIFIC (if required) and add the item to the ordering catalog via an 832 catalog transaction in STORES or FFAVORS. 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 “Request for New Item” form is mandatory.

(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 / Additions

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

(i) 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 100% for Non-DoD Schools & Troops Customers of the initial contract Delivered Price,

(b) 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 Economic Price Adjustment (EPA) provision. In accordance with said provision, a Contractor is permitted to submit a bi-weekly 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. EPA requests shall be submitted bi-weekly, no later than 9:00 AM Hawaii Standard Time (HST) on Tuesday to be effective in the following week’s ordering catalog. The Contractor shall notify the Contracting Officer by email and update in the form of an electronic data interchange (“EDI”) 832 transaction when using STORES or an update in FFAVORS. 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 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 bi-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.

(c) Catalog Additions: Before an item is added to the catalog, contractors are required to submit to the contracting officer a request of proposed catalog additions. The request shall include the stock number, Government item description, proposed unit price and a corresponding supplier invoice or quote. 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 contractor. If after negotiations the proposed pricing still cannot be determined fair and reasonable the item will not be added to the catalog.

(d) Pricing Requirements: The final negotiated contract fixed unit price for each item delivered to all customers shall be in effect for a minimum of all orders issued during the first two ordering weeks (from Sunday at 12:01 AM Hawaii Standard Time (HST) through the following Saturday until 11:59 PM) of the second week following (i.e., the 14th day)). The prices shall remain in effect for all subsequent ordering weeks except as otherwise adjusted IAW clause Economic Price Adjustment –Actual Material Costs for Subsistence Delivered Price Business Model (Nov 2011).

VI. ECONOMIC PRICE ADJUSTMENT (“EPA”) – ACTUAL MATERIAL COSTS FOR SUBSISTENCE 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” mean 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 Period” means from Sunday at 12:00 AM (Eastern Time (ET), standard or daylight as applicable) through 11:59 PM on the second Saturday following.(i.e., the 14th day).

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 period, if the Contractor’s Delivered Price changes for any or all Contract Unit Prices, the Contract Unit Price shall be changed in the next period’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 period. 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 period.

(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. HST on Tuesday to be effective in the following ordering period’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 ordering period’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 ordering period’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 periods. 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 AM HST 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 period. 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. HST 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 100% for Department of Defense (DoD) Troops and 100% for United States Department of Agriculture (USDA) School & Tribal Reservation customers, 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 period’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 tiers 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.

VII. 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.

VIII. 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. Group 1: 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).

C. Group 2: The instant DNAD as applied affects resulting contracts supporting Department of Defense customers (i.e., Troops). For Group 2 (Troops) allows both domestic and non-domestic items, when domestic is not available.

VIX. ADDITION OF NEW CUSTOMERS

A. Adding Customers within the Kauai distribution zone.

1. Additional federal government and Schools customers that request DLA TROOP SUPPORT INDO-PACIFIC Produce Support be added, without any new acquisition or competition process, if the customer(s) is clearly within the Kauai Distribution Zone covered by this contract, shall be the sole decision of the DLA TROOP SUPPORT INDO-PACIFIC Contracting Officer. The contract maximum may not be exceeded, even with the addition of a new customer(s).

X. CUSTOMER SERVICE

A. The Troop, USDA, and other customers conduct periodic food menu boards, and other types of meetings which the contractor may be required to attend. At these meetings, the customers not only review their internal business practices, but the contractor can utilize this forum to show new products, demonstrate produce preparation, and provide nutritional information.

B. The contractor shall provide at least one (1) full time Customer Service representative to maintain continuous contact with all of the ordering activities. The name of the representative and the phone number, mobile phone number, beeper number, email address, or any other method of communicating with the representative, shall be furnished to the customer after award.

C. The contractor shall assume the responsibility of introducing new food items to the customers, as well as to show cost effective alternatives to their choices. 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.

XI. VALUE ADDED SERVICES

Market Forecast: When supplies are anticipated to be in short supply, the contractor is required to provide the customer and the contracting officer with this information in advance. This may include regularly issued weekly produce market forecast bulletins which outlines for the following week’s information regarding supply availability, product quality, associated growing areas, price trends, weather conditions, and handling tips and any industry news.

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.

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.

B. Subsistence Total Order & Receipt Electronic System (STORES): DOD (TROOP) customers will order using the Subsistence Total Order and Receipt Electronic System (STORES) catalog. The contractor is responsible for establishing and maintaining the STORES catalog.

1. Accessed via the Internet, STORES is the Government’s translator/ordering system that is capable of accepting orders from any of the Services, i.e., Army, Air Force, Navy, or Marines, individual ordering systems and translating them into an Electronic Data Interchange (EDI) format. In addition, this information is passed to DLA TROOP SUPPORT INDO-PACIFIC for the purposes of contractor payment and customer billing.

2. Customers will be able to order all of their requirements through STORES. The System will transmit orders to the contractor and DLA TROOP SUPPORT INDO-PACIFIC.

3. The awardee shall be required to interface with STORES and must be able to support the following EDI transactions:

Note: A complete description of these transaction sets is included in the “EDI Implementation Guidelines” can be found in the attachment or at http://www.troopsupport.dla.mil, Select supply chains: Select Subsistence, Select Information: Select Stores & EDI Requests.

4. The contractor shall have access to the Internet and be able to send and receive electronic mail (email).

5. Unit prices must be formatted not more than two (2) places to the right of the decimal point in all ordering catalogs.

6. The contractor is required to utilize the Government’s item descriptions on all electronic ordering catalogs (832 transmissions) as well as on its invoices, delivery ticket to customer and 810 invoice transaction set.

7. The contractor will utilize the DLA TROOP SUPPORT INDO-PACIFIC invoice reconciliation process, or other such systems as may become available, to the maximum extent, towards the goal of correcting invoices early and facilitating the payment process.

8. In the event the STORES system or the contractor’s interface is not operational, the contactor must provide alternate ways for the customer to order (e.g., by fax, by phone, pick up orders, etc.)

9. Contractor shall use the Order Receipt Confirmation tool in STORES to confirm receipt of all transmitted orders.

B. Public Key Infrastructure (PKI)/ External Certificate Authorities (ECA) Certificates: The Department of Defense (DoD) Public Key Infrastructure (PKI) Certificate will be required for all DoD users. A DoD PKI certificate will be required for all contractors. The requirement for PKI certificates is implemented in accordance with DoD security policy promoting secure electronic transactions.

1. Obtaining a PKI certificate:

(a) Contractors who do not work on-site at a Department of Defense facility may purchase a DoD PKI certificate from one of three External Certificate Authorities (ECAs). The ECAs are companies that provide digital certificates to DoD’s industry partners who are using their own equipment or working in non – Governmental facilities. Certificate prices range from $99 - $115 per certificate per year, with volume discounts at some ECAs.

(b) Each contractor must fully comply with the DoD requirement to implement PKI in order for our information systems to remain…