DHS IFB Infant Formula Rebate-B-47390.docx

The following information will become the contract between the awarded vendor and the Illinois Department of Human Services. Instructions and requirements to submit a bid response are found in the attachment titled “Invitation for Bid Vendor Instructions and Requirements”.

Illinois Department of Human Services Contract WIC Infant Formula Rebate BidBuy Bid 25-444DHS-FAMCO-B-47390

The Parties to this contract are the State of Illinois acting through the undersigned Agency (collectively the State) and the Vendor. This contract, consisting of the signature page and numbered sections listed below and any attachments referenced in this contract, constitute the entire contract between the Parties concerning the subject matter of the contract, and in signing the contract, the Vendor affirms that the Certifications and Financial Disclosures and Conflicts of Interest attached hereto are true and accurate as of the date of the Vendor’s execution of the contract. This contract supersedes all prior proposals, contracts and understandings between the Parties concerning the subject matter of the contract. This contract can be signed in multiple counterparts upon agreement of the Parties.

1. SCOPE OF WORK

1.1. OVERVIEW AND PURPOSE:

The Illinois Department of Human Services (DHS) is seeking an infant formula vendor to supply and provide a rebate on all its infant formula that the State chooses to issue for the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) except for any:

· exempt infant formulas,

· WIC-eligible nutritionals,

· authorized supplemental food issued to participants who receive Food Package III,

· any contract brand infant formula that does not meet the requirements in 7 CFR 246(e)(12), requiring medical documentation before issuing, except as allowed under any applicable USDA waivers.

The DHS WIC Program must utilize cost containment methods when providing food benefits to the eligible participants of Illinois. One method that is proven to be effective and is mandated under the federal regulations is an infant formula rebate program to reduce the overall cost to the program to feed eligible infants on the program. As of Federal Fiscal Year 2024, the DHS WIC Program receives approximately 30% of its funding for food from this project. Rebate dollars can only be used to purchase WIC foods and are not part of the Nutrition Services and Administration (NSA) funds used for administration and service delivery. Approximately 52,000 clients each month can be served using funds received from the Infant Formula Rebate program that allows Illinois to serve all eligible categories and priorities.

Products submitted in this Invitation for Bid (IFB) shall comply with all applicable regulations relevant to infant formulas (21 CFR) pursuant to the provisions of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 321(z)) and meet the requirements for an infant formula under section 412 of the Federal Food, Drug and Cosmetic Act, as amended (21 U.S.C. 350a) and the regulations at 21 CFR parts 106 and 107. The WIC Program will issue infant formula in accordance with §246.10(e)(1) through (e)(3) and (e)(9), of the WIC Program regulations. In addition, the State agency will, if necessary, provide the full nutritional benefit (FNB), use the methodology outlined in §246.10(e)(9) in the WIC Program regulations when issuing infant formula.

This procurement is completely different from normal procurements, because DHS will be requesting the highest percentage discount of the manufacturer's net wholesale truckload cost of infant formula. The winning vendor will calculate that discount as a rebate amount owed to the State. On a monthly basis, DHS will provide an invoice to the manufacturer that will include the amount of product redeemed and the amount of the rebate by product type to achieve a total rebate for the month for all sizes and types of infant formula. DHS intends to contract with one (1) successful bidder to provide the complete set of products and services listed in this IFB. Therefore, if the bidder does not produce a soy-based infant formula, the bidder is required to subcontract with another manufacturer to supply a soy-based infant formula under this contract per 7 CFR 246.16a(c)(2)(i). If a subcontractor is used to supply soy-based infant formula, the bidder is required to pay the State a rebate on the soy-based infant formula supplied by the subcontractor that is issued by the State. This IFB will not entertain joint bids. DHS will not be a part of any multi-state alliance for this IFB. DHS reserves the right to issue a non-contract brand infant formula to those with medical documentation covered by 7 CFR 246.10(d)(1), except as allowed under any applicable USDA waivers, or documented religious dietary needs such as Kosher and Halal as outlined per 7 CFR 246.10(d)(2)(i) if the successful bidder does not make a qualifying product. DHS reserves the right, at its sole discretion, to immediately obtain and implement waivers issued by USDA to support WIC outreach, innovation, and/or modernization upon notifying the Vendor.

1.2. SUPPLIES AND/OR SERVICES REQUIRED:

1.2.1. Plan of Action

1.2.1.1. The awarded Vendor must notify all currently authorized and potential applicant WIC Vendors they were successful in winning the bid, and the State has a new infant formula contract for State Fiscal Year 2026 (SFY 2026) which runs from July 1, 2025 to June 30, 2026. This is particularly important as about 50% of all infants born in the United States are or will have been on the WIC program sometime in their life. The contact made to the retail and wholesale organizations must be made within thirty (30) days prior to the start of the contract. In conjunction with the retail trade, the Vendor must prepare a notification to all health care or primary care providers that their company has acquired the State of Illinois Infant Formula Contract for WIC. This communication (electronic or otherwise) should happen prior to January 1, 2026. All notifications sent to Illinois health care providers regarding the State WIC Program should include a carbon copy to the State WIC Program Director. Any written communication from the Vendor to local WIC agencies, authorized and potential WIC retail Vendors, and Illinois health care providers or primary care providers regarding WIC Program policy or guidance will require prior written approval by the WIC Program. The current number of DHS WIC clinic locations is 178 throughout the State. The current WIC retail food vendor population is approximately 1550 throughout the state and all of those can be notified by DHS via their e-mail and contact information as provided in their application and contract with the State WIC Program. The average monthly participation for Federal Fiscal Year 2024 (FFY 2024, which was from October 1, 2023, to September 30, 2024) was 168,807, including approximately 44,133 infants, of which on average 4,750 were exclusively breastfed. The average monthly number of participants issued contract brand infant formula was 32,038 and the average monthly number of participants issued exempt infant formula was 3,050 or about 9.5%.

Data:

1.2.1.2. The Vendor will not charge the Food Centers’ agent (Catholic Charities) more than other organizations of the same size and ordering capacity or like entities.

1.2.2. Bid Offer and Calculation of Discount

1.2.2.1. On Attachment D - 2026 Bid Sheet Template-Single Solicitation, the bid shall include a rebate amount for a single milk-based infant formula for concentrate liquid, powdered, and ready-to-feed physical forms. The milk-based infant formula must meet the requirements under 7 CFR 246.10(e)(1)(iii) and 7 CFR 246.10(e)(2)(iii) and be suitable for routine issuance to the majority of generally healthy, full-term infants. All vendors must specify the rebates offered for the contract brand infant formula(s) by unit. After the contract is awarded, DHS must calculate the percentage discount for all other contract brand infant formulas (i.e., all other infant formulas produced by the Vendor, including new infant formula, other than exempt infant formulas) approved for issuance by DHS.

1.2.2.1.1. Ready-to-feed WIC formulas may be authorized when the competent professional authority determines and documents that certain conditions be met as referenced in 7 CFR 246.10(e)(1)(iv) and 7 CFR 246.10(b)(1)(ii).

1.2.2.2. The percentage discount will be calculated by dividing the individual rebate for the primary contract brand infant formula by the vendor's lowest national wholesale truckload price per unit, as of the date of the bid opening, for a full truckload of the primary contract brand infant formula. The percentage discounts must be used to determine the rebate for all other contract brand infant formulas approved for issuance by DHS. The rebate paid on all contract infant formulas (excluding the primary contract brand infant formula), yields the same percentage discount as the corresponding physical form of the contract infant formula by which bids were solicited. That is, the discount established at the beginning of the contract (by form) is used to calculate the rebate for the initiation of the contract. The rebate to be paid on all infant formula added to the contract after the start date (new and existing) will be calculated using the wholesale truckload price of the formula the time the formula is approved for issuance by DHS.

1.2.2.2.1. Example

1.2.2.2.1.1. Milk-based liquid concentrate:

Rebate

Wholesale Truckload Unit Price

% Discount or Premium

1.2.2.2.1.2. All other milk-based liquid concentrate non-exempt products will receive 95.00% discount or premium from the whole unit price.

1.2.2.2.2. To assist Vendor in determination of the percentage discount calculation, DHS provides the Vendor with data of monthly redemptions by unit (see Attachments E-1 and E-2). This calculation does not necessarily reflect actual issuance that will occur under the new contract. The State cannot guarantee the quantity, size and type or forms of infant formula that will be redeemed in the new contract.

1.2.3. Price Changes

The Vendor must notify DHS in advance of any increase or decrease in the wholesale truckload price of infant formula at least 30 days in advance. Such notification shall include both the date and amount of the increase or decrease. The rebate paid by the Vendor for any item that has increased or decreased in price shall then automatically increase or decrease on a cent-forcent basis beginning thirty (30) days following the day and month in which the vendor's wholesale truckload price increases or decreases. DHS requires the manufacturer to adjust rebates for price changes after the bid opening.

1.2.4. Product Changes

1.2.4.1. The Vendor must notify the State WIC Program Contact identified in section 5.1.8 and designees in writing by email of any product changes, at least 90 days in advance of the effective date of the product change. In addition, the Vendor must submit their revised price sheet with the product change to the State WIC Program Contact identified in section 5.1.8 and designees.

1.2.4.2. The WIC Program reserves the right to approve or reject for issuance any 'new' infant formula introduced by the Vendor or any substitution for a similar existing product after the signing of this Contract. If the Vendor desires to substitute the new infant formula product for any of the contract brand infant formula products, the Vendor must pay a rebate that yields the same percentage discount on wholesale truckload cost as the same physical form of the iron-fortified milk-based infant formula when used as a substitute. Refer to Section 1.2.2 for additional information regarding price terms.

1.2.4.3. If the Vendor replaces the contract brand infant formula with a 'new' formulation of the contract brand infant formula, the manufacturer must either make the original contract brand infant formulas available for the remainder of the contract period (at the same rebate), or provide a rebate on the newly formulated product that yields the same net cost per unit (net wholesale cost per reconstituted ounce of formula if change in unit size). If the contract brand infant formula described in the contract is no longer available, the State may terminate the contract without further liability and solicit new bids.

1.2.4.4. If the Vendor desires to change the label or packaging (including color or shape), UPC, container size, reconstitution amount or reformulation of the contract brand infant formulas during the Contract period these anticipated changes must be reported to the State WIC Program Contact identified in section 5.1.8 and designees no later than 90 days in advance of changes and/or when reported to customers, wholesalers or hospitals.

1.2.4.5. Accepted modifications due to price changes and product changes specified in Sections 1.2.3 Price Changes and 1.2.4 Product Changes, will not be documented as a contract amendment or modification as specified in Standard Business Terms and Conditions, Section 4.21 Modifications and Survival.

1.2.5. Billing Errors

1.2.5.1. The Vendor may be entitled to recoupment of funds paid due to a billing error, after demonstration of these billing errors has been accepted by DHS. The Vendor may only recoup funds due to a billing error and must notify DHS within 90 calendar days of payment of the invoice. Any review of WIC redemption data by the Vendor shall be for purposes of recoupment in resolving billing error discrepancies. One example of an error is if DHS issued quantities of infant formula more than the monthly maximums allowed by federal law.

1.2.5.1.1. DHS will make every effort to validate all overbilling errors.

1.2.5.1.2. DHS will promptly disburse any funds owed to the appropriate party upon the resolution of a billing dispute.

1.2.5.1.3. DHS and the Vendor will meet as often as necessary to review the progress and performance of the contract, including any concerns with billing procedures.

1.2.5.1.4. DHS does not allow WIC clients to return formula received for any reason.

1.2.6. Disputes

1.2.6.1. All disputes must be submitted in writing within 120 calendar days of the invoice being issued and settled within 180 calendar days of the invoice receipt date or by closeout of the current fiscal year in which the dispute occurred, whichever date is the latest date.

1.2.7. Food and Drug Administration (FDA) Certification

1.2.7.1. The Vendor must certify it is registered with the Secretary of Health and Human Services under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) certify with the State health department that their infant formulas comply with the Federal Food, Drug, and Cosmetic Act and regulations issued pursuant to the Act.

☐Yes ☐No

NOTE: Vendor must be able to provide verification of this certification upon request.

1.2.8. National Price

1.2.8.1. Vendors must submit their most current nationally published wholesale truckload price list that is most current on the day of the bid opening, for each type and form of infant formula in the Vendor's product line for the products required to bid.

1.2.9. WIC Logo

1.2.9.1. The WIC Acronym and the WIC Logo are registered service marks of the United States Department of Agriculture (USDA) for USDA's WIC, Registration Nos. 1,630,468 and 1,641,644, respectively, hereinafter referred to collectively as the "service marks." The USDA has provided States and Indian Tribal Organizations (ITO's) specific direction regarding the use of the service marks by manufacturers of Infant Formula. They are as follows:

1.2.9.1.1. Manufacturer acknowledges that the WIC Acronym and the WIC Logo are service marks owned by the USDA, and that all rights therein and goodwill pertaining there to belong exclusively to the USDA per WIC Policy Memorandum #2009-1.

1.2.9.1.2. Manufacturer shall not use these service marks in any manner on its goods or their containers or packaging or on tags or labels affixed thereto. Manufacturer also shall not use the WIC Logo in advertising or other promotional materials (collectively: "advertising") per WIC Policy Memorandum #2009-1.

1.2.9.1.3. Manufacturer shall not use the WIC Acronym in advertising in any manner that is likely to cause confusion, mistake, or deception as to the affiliation, connection, or association of Manufacturer with the WIC Program, or as to the sponsorship or approval of the Manufacturer's goods, services, advertising, or commercial activities, including nutritional message(s), by the WIC Program, USDA, or DHS per WIC Policy Memorandum #2009-1.

1.2.9.1.4. Manufacturer shall include the following statement with any use of the WIC Acronym in advertising: "WIC is a registered service mark of the U.S. Department of Agriculture for USDA's Special Supplemental Nutrition Program for Women, Infants and Children” per WIC Policy Memorandum #2009-1.

1.2.9.1.5. Manufacturers may only have access to the following vendor information: vendor name, address, and authorization status. This information may be requested to update the manufacturer's mailing lists.

1.2.10. Rebate Billing Procedures

1.2.10.1. DHS will create a rebate invoice totaling the infant formula redeemed for the previous month by formula type / product name, UPC, the number of units transacted, rebate amount per unit, and the extended rebate amount. The awarded vendor will be required to submit payment no later than thirty (30) days upon receipt of the rebate invoice. If the payment is not received by DHS within the thirty (30) calendar days upon receipt of the rebate, the State may request an additional 1% per month of the original rebate amount. All invoices sent by DHS will contain the address and correct contact person to send the rebate check to at DHS (see Attachment G – Infant Formula Rebate Invoice Sheets 2023-2025).

1.2.10.2. The awarded vendor cannot withhold rebate payments under any circumstances.

1.2.10.3. All disputes made by the Vendor must be settled by a revised invoice or a revised written notification. In both instances the written notification must be dated.

1.2.11. Monthly Reporting

1.2.11.1. In addition to providing the rebate billing, DHS will provide documentation monthly of the actual count of the number of units sold to participants to support the infant formula rebate invoices. DHS will only provide to the Vendor records directly related to the monthly rebate. The detailed file of monthly redemptions from either the DHS WIC data system or the DHS WIC EBT processor will be sent directly to the awarded Vendor with the following data fields (at minimum):

Report Begin Date Report End Date Local Agency Code Local Agency Name Clinic Code Clinic Name Account Type Account Type Description Selected Rebate Indicator Vendor Name Transaction Date/Time Transaction Type Category Code Category Description Sub-Category Code Sub-Category Description UPC/PLU UPC/PLU Description UOM (Unit of Measure) Rebate Indicator (if any) WIC Family ID Card holder Type Card holder Type Description Benefit Issuance No Benefit Begin Date Benefit End Date Redeemed Quantity Applied Benefit Units Requested Amount Settled Amount Transaction Date Transaction Time

1.2.12. Confidentiality

1.2.12.1. Confidential vendor information is any information about a vendor (whether it is obtained from the vendor or another source) that individually identifies the vendor, except for vendor's name, address, telephone number, web site, e-mail address, store type, and authorization status per 7 CFR 246.26(e) and WIC Policy Memorandum #2021-6. Except as otherwise permitted by this section, DHS shall restrict the use or disclosure of confidential vendor information to:

1.2.12.1.1. Persons directly connected with the administration or enforcement of the WIC program or Supplemental Nutrition Assistance Program (SNAP) who DHS determines have a need to know the information for purposes of this program. These persons may include personnel from its local agencies and other WIC state and local agencies and persons investigating or prosecuting WIC or SNAP violations under Federal, State, or local law.

1.2.12.1.2. Persons directly connected with the administration or enforcement of any Federal or State law or local law or ordinance. Prior to releasing the information to one of these parties (other than a Federal agency), DHS shall enter into a written agreement with the requesting party specifying that such information may not be used or re-disclosed except for purposes directly connected to the administration or enforcement of a Federal or State law;

1.2.12.1.3. A vendor that is subject to an adverse action, including a claim, to the extent that the confidential information concerns the vendor subject to the adverse action is related to the adverse action.

1.2.12.1.4. At the discretion of DHS, all authorized vendors and vendor applicants regarding vendor sanctions which have been imposed, identifying only the vendors name, address, length of the disqualification or amount of the civil money penalty, and a summary of the reason(s) for such sanction provided in the notice of adverse action. Such information may be disclosed only following the exhaustion of all administrative and judicial review, in which DHS has prevailed, regarding the sanction imposed on the subject vendor, or the time period for requesting such review has expired.

1.2.12.2. Confidentiality of applicant and participant information:

1.2.12.2.1 WIC Purposes:

1.2.12.2.1.1. Confidential applicant and participant information are any information about an applicant or participant, whether it is obtained from the applicant or participant, another source, or generated as a result of WIC application, certification, or participation, that individually identifies an applicant or participant and/or family member(s). Applicant or participant information is confidential per 7 CFR 246.26(d)(1)(i-ii), regardless of the original source and exclusive of previously applicable confidentiality provided in accordance with other Federal, State, or local law.

1.2.12.2.1.2. Except as otherwise permitted by this section, DHS restricts the use and disclosure of confidential applicant and participant information to persons directly connected with the administration or enforcement of the WIC program whom DHS determines has a need to know the information for WIC program purposes. These persons may include, but are not limited to, personnel from its local agencies and other WIC State or local agencies; persons under contract with DHS to perform research regarding the WIC program; and persons investigating or prosecuting WIC program violations under Federal, State, or local law.

Nothing in Section 1.2.9 is intended to preclude DHS from fully complying with any State or Federal law.

For procurements conducted in BidBuy, the State may include in this contract the BidBuy Purchase Order as it contains the agreed Supplies and/or Services.

1.3. MILESTONES AND DELIVERABLES:

1.3.1. DHS will procure the best competitive bid available for the lowest monthly net wholesale truckload cost per unit of infant formula, or the highest monthly rebate (subject to 7 CFR 246.16a(c)(5)). The infant formula manufacturer will provide a bid for all physical forms of infant formula they produce (except for exempt infant formula) that meet the specifications of this Invitation for Bid (IFB). All manufacturers should be able to provide milk-based, soy-based, and both must be available in a powder form, ready-to-feed, and a liquid concentrate.

Upon selection, the primary contract brand infant formula will be the formula of first choice for issuance (by physical form) to infants with all other infant formulas issued as an alternative or under any applicable waivers to the primary contract brand infant formula. At the determination of the primary contract brand infant formula, all milk-based formula bids will be calculated to determine the lowest monthly net cost to the program, or the highest monthly rebate. Upon the exclusion of the exempt infant formulas, all base contract formulas will receive the same percentage of discount as the primary contract brand infant formulas as defined in 7 CFR 246.16a(c)(4). The State WIC Program does not provide non-contract brand infant formula under any circumstances other than for clients with medical documentation covered by 7 CFR 246.10(d)(1), except as allowed under any applicable USDA waivers, or those with documented religious dietary needs such as Kosher and Halal as outlined per 7 CFR 246.10(d)(2)(i) if the successful bidder does not make a qualifying product.

1.3.1.1 DHS may choose to require medical documentation before issuing any contract brand infant formula as outlined in 7 CFR 246.16a(c)(9) and 7 CFR 246.10(d)(1)-(2).

1.3.2 Only companies that can produce and distribute infant formula products in sufficient quantity to serve the entire potential WIC infant population in Illinois can bid on this contract. In Illinois it should be recognized that the current split between "milk-based" infant formula and "soy-based" products is 98% milk versus 2% soy of the primary contract brand infant formula.

1.3.3. Rebate Invoice Billing Credits

1.3.3.1. The parties acknowledge that widespread unavailability of contract brand infant formula exceeding 7 calendar days and affecting 5% or more of WIC participating infants will interfere with the timely and proper completion of the contract, to the loss and damage of DHS, and that it would be impracticable and extremely difficult to fix the actual loss sustained by DHS due to any such delay. Therefore, the Vendor and DHS agree that in the case of any such unavailability in respect of which DHS does not elect to exercise its rights under Standard Business Terms and Conditions, Section 4.10., Indemnification and Liability, DHS may assess a Rebate Invoice Billing Credit to the Vendor as specified in this section.

1.3.3.2. If widespread unavailability of contract brand infant formula exceeding 7 calendar days and affecting 5% or more of WIC participating infants occurs (for example, formula manufacturer inventory shortage prevents distribution centers and thus WIC authorized vendors from procuring infant formula), then DHS must be entitled to collect a Rebate Invoice Billing Credit for each day Vendor fails to remedy the unavailability equal to the daily projected lost rebate amount.

1.3.3.3. The parties acknowledge that non-payment of infant formula rebate monthly will interfere with the timely and proper completion of the Contract, to the loss and damage of DHS, and that it would be impracticable and extremely difficult to fix the actual loss sustained by DHS due to any such delay. Therefore, Vendor and DHS agree that in the case of any such nonpayment of infant formula rebate in respect of which DHS does not elect to exercise its rights under Standard Business Terms and Conditions, Section 4.10., Indemnification and Liability, DHS may assess a credit to the Vendor as specified in this section.

1.3.3.4. If unavailability of the infant formula or non-payment of infant formula rebate occurs, then DHS must be entitled to a Rebate Invoice Billing Credit equal to the daily projected lost rebate amount for each day the Vendor fails to remedy either the unavailability of infant formula or non-payment of infant formula rebate. The amount of the daily projected lost rebate amount per day charge will be invoiced to the Vendor, and the Vendor must remit payment in accordance with the requirements of this Section 1.3.4. Rebate Invoice Billing Credits.

1.3.3.5. Vendor must indicate they will comply as specified with this subsection or will comply but with modifications. If modifications are proposed, Vendor must describe the modification in enough detail for the State to evaluate it.

1.3.4. Risk Management

1.3.4.1. The State WIC program provides a limited number of milk-based and soy-based formulas for WIC infants who are not fully breastfed. To reduce risk to the WIC Program, offer maximum flexibility to WIC clients, and reduce frustrations with not being able to purchase a specific infant formula due to product availability at the vendor, it is the intent of the State WIC Program to assign all Category 21 contract brand infant formulas under one subcategory to expand choice at the retail level.

1.3.4.2. The State WIC Program reserves the right to allow client redemption of alternative formulas if there are contract brand infant formula shortages or outages, or availability/access issues for Authorized WIC Vendor due to disrupted distribution channels or vendor shortages regardless of the cause. In the event of a shortage/outage, the first option the State would pursue is to authorize redemption of the same contract brand infant formula in a different physical form (liquid concentrate, powder, ready-to-feed) for the duration of the shortage/outage. If no forms of the contract brand infant formula are readily accessible, alternative formula choices for WIC clients may include a different size of the same formula that may exceed the maximum monthly allowance, or a different brand of formula, including a nutritionally comparable formula from another manufacturer (non-contract brand infant formula, non-exempt infant formula) without medical documentation with the exception of participants receiving Food Package III as defined in section. If implementation of any of the alternatives noted in this paragraph are required due to contract brand infant formula shortages or outages, the Vendor will be responsible for providing a rebate on the alternative product that yields the same net cost per unit (net wholesale cost per reconstituted ounce of formula if change in unit size), even if it is a different physical form of the same contract brand infant formula. If contract brand infant formulas are not readily available due to a manufacturer shortage/outage, DHS may terminate the Contract without further liability and solicit new bids and may hold the Vendor responsible for any excess costs occasioned thereby.

1.3.4.2.1 The State WIC Program will implement remedies in the event of a formula recall in accordance with any applicable USDA waivers and that the remedies will remain in effect for the duration of the waivers at the discretion of the State agency.

1.3.4.2.2. The Vendor providing the contract brand infant formula will provide the State with an action plan within five (5) business days of the announcement of the supply disruption that includes supply data to meet infant formula demand and limit disruption to Program participants in the affected jurisdiction(s).

1.3.4.2.3. When allowing infant formula to be issued in all unit sizes that may exceed the maximum monthly allowance, the State and contracted infant formula manufacturer must prioritize unit sizes that most closely provide the maximum monthly allowance per 7 CFR 246.16a(n)(1).

1.3.4.3. The Vendor must assist the State with providing contract brand infant formula to WIC participants on an emergency basis if normal distribution channels are disrupted by such events as acts of God, acts of terrorism or war, epidemics, communication line failures, power failures, earthquakes, contamination of water supplies or other disasters or events.

1.3.5. Recall Requirements and Procedures

1.3.5.1. Vendor must immediately communicate with the State regarding issues of infant formula production, distribution, quality control issues, recalls, or rebates. The Vendor must notify the State WIC Program Contact identified in section 5.1.8 and designees via email and phone call or message within one (1) business day of any recall or safety notices relating to all infant formulas provided under the Rebate Contract. In addition, a hard copy of this notice must be received as specified in Standard Business Terms and Conditions, Section 4.20 Notices.

1.3.5.2. The Vendor is responsible for picking up and replacing or issuing credit or all products that are subject to recall at no additional charge to the State.

1.3.6. Contract Transition

1.3.6.1. The previous/current contract is awarded through January 31, 2026. The State WIC Program routinely issues formula in 3 month increments and expects the current Vendor's products to be issued until January 31, 2026, and the State would therefore expect redemptions until April 30, 2026.

1.3.6.2. Two separate invoices will be created in the event the Awarded Vendor is not the previous/current Vendor.

1.3.6.2.1. The State WIC Program will submit for rebate for the previous Vendor's products redeemed through April 30, 2026. The last invoice will be due May 2026.

1.3.6.2.2. The State WIC Program will begin to issue the Awarded Vendor's products beginning February 1, 2026.

1.3.6.2.2.1. The State will submit for rebate for the Awarded Vendor's products with the first invoice due March 2026.

1.3.6.3. The above dates are dependent upon the execution of this contract with the State and are subject to change if the implementation of this contract is delayed. To anticipate the possible delay of execution of this contract, DHS reserves the right to extend the current contract and delay this contract start date. If a delay occurs, the current contract shall only be extended a period not to exceed 120 days from the current contract's actual ending date of January 31, 2026.

1.4. VENDOR/STAFF SPECIFICATIONS:

1.4.1. The winning Vendor must identify all staff that will be actively participating with the State infant formula rebate program for WIC. Identify the organizational chart as it pertains to this project. The Vendor must include in this chart all business addresses and contact phone numbers, including cell, voice, and fax numbers.

1.5. TRANSPORTATION AND DELIVERY: N/A

1.6. SUBCONTRACTING:

Subcontractors are allowed.

1.6.1. Will subcontractors be utilized? |_| Yes |_| No

A subcontractor is a person or entity that enters into a contractual agreement with a total value of $100,000 or more with a person or entity who has a contract subject to the Illinois Procurement Code pursuant to which the person or entity provides some or all of the goods, services, real property, remuneration, or other monetary forms of consideration that are the subject of the primary State contract, including subleases from a lessee of a State contract.

All contracts with subcontractors where the annual value of the subcontract is greater than $50,000 must include Illinois Standard Certifications completed by the subcontractor.

1.6.2. Please identify below subcontracts with an annual value of $100,000 or more that will be utilized in the performance of the contract, the names and addresses of the subcontractors, and a description of the work to be performed by each.

· Subcontractor Name: Click here to enter text Amount to Be Paid: Click here to enter text Address: Click here to enter text Description of Work: Click here to enter text

· Subcontractor Name: Click here to enter text Amount to Be Paid: Click here to enter text Address: Click here to enter text Description of Work: Click here to enter text If additional space is necessary to provide subcontractor information, please attach an additional page.

1.6.3. If the annual value of any subcontracts is more than $100,000, then the Vendor must provide to the State the Financial Disclosures and Conflicts of Interest for that subcontractor.

1.6.4. If at any time during the term of the Contract, Vendor adds or changes any subcontractors, Vendor is required to promptly notify, in writing, the State Purchasing Officer or the Chief Procurement Officer of the names and addresses and the expected amount of money that each new or replaced subcontractor will receive pursuant to this Contract. Any subcontracts entered prior to award of this Contract are done at the sole risk of the Vendor and subcontractor(s).

1.7. WHERE SERVICES ARE TO BE PERFORMED: Unless otherwise disclosed in this section all services shall be performed in the United States. If the Vendor performs the services purchased hereunder in another country in violation of this provision, such action may be deemed by the State as a breach of the contract by Vendor.

Vendor shall disclose the locations where the services required shall be performed and the known or anticipated value of the services to be performed at each location. If the Vendor received additional consideration in the evaluation based on work being performed in the United States, it shall be a breach of contract if the Offeror shifts any such work outside the United States.

· Location where services will be performed: Click here to enter text Value of services performed at this location: Click here to enter text

· Location where services will be performed: Click here to enter text Value of services performed at this location: Click here to enter text

2. PRICING

2.1. TYPE OF PRICING: The Illinois Office of the Comptroller requires the State to indicate whether the contract price is firm or estimated at the time it is submitted for obligation. The total price of this contract is estimated.

2.2. VENDOR’S PRICING: Vendor’s pricing is located in the Items Tab in the BidBuy Purchase Order. The State includes in this contract the BidBuy Purchase Order as it contains the agreed pricing.

2.3. FORMAT OF PRICING:

2.4. RENEWAL COMPENSATION: If the contract is renewed, the price shall be at the same rate as for the initial contract term, unless a different compensation or formula for determining the renewal compensation is stated in this section.

2.4.1. Vendor’s Price for Renewal: See Attachment D.

2.5. MAXIMUM AMOUNT: The total payments under the initial term of this contract shall not exceed $0.00 without a formal amendment. The maximum amount will be entered by the State prior to execution of the contract. This is a zero ($0.00) cost contract. Estimated value of rebates to be paid to the State is $42,000,000.00 for each year.

3. TERM AND TERMINATION

3.1. TERM:

3.1.1. TERM OF THIS CONTRACT: The contract will have an initial term commencing upon February 1, 2026, and ending January 31, 2029. In no event will the maximum total term of the contract, including the initial term, any renewal terms, and any extensions, exceed ten (10) years. Vendor shall not commence billable work in furtherance of the contract prior to final execution of the contract except when permitted pursuant to 30 ILCS 500/20-80.

3.1.2. RENEWAL: Subject to the maximum total term identified above, the State has the option to renew for the following term(s):

· The State reserves the right to renew for a total of four (4) years by using two (2) two-year renewals up to and including the entire renewal allowance.

· The Vendor is required to give the State eighteen (18) months’ notice if the Vendor does not agree to the second two-year renewal.

Any renewal of the resulting contract is subject to the same terms and conditions that apply to the initial term of the contract unless otherwise provided. The State may renew the contract for any or all of the option periods specified, may exercise any of the renewal options early, and may exercise more than one option at a time based on continuing need and favorable market conditions, when in the best interest of the State. The contract may neither renew automatically nor renew solely at the Vendor’s option.

3.2. TERMINATION FOR CAUSE: The State may terminate this contract, in whole or in part, immediately upon notice to the Vendor if: (a) the State determines that the actions or inactions of the Vendor, its agents, employees or subcontractors have caused, or reasonably could cause, jeopardy to health, safety, or property, or (b) the Vendor has notified the State that it is unable or unwilling to perform the contract.

If Vendor fails to perform to the State’s satisfaction any material requirement of this contract, is in violation of a material provision of this contract, or the State determines that the Vendor lacks the financial resources to perform the contract, the State shall provide written notice to the Vendor to cure the problem identified within the period of time specified in the State’s written notice. If not cured by that date the State may either: (a) immediately terminate the contract without additional written notice or (b) enforce the terms and conditions of the contract.

For termination due to any of the causes contained in this Section, the State retains its rights to seek any available legal or equitable remedies and damages.

3.3. TERMINATION FOR CONVENIENCE: The State may, for its convenience and with thirty (30) days prior written notice to Vendor, terminate this contract in whole or in part and without payment of any penalty or incurring any further obligation to the Vendor.

Upon submission of invoices and proof of claim, the Vendor shall be entitled to compensation for supplies and services provided in compliance with this contract up to and including the date of termination.

3.4. AVAILABILITY OF APPROPRIATION: This contract is contingent upon and subject to the availability of funds. The State, at its sole option, may terminate or suspend this contract, in whole or in part, without penalty or further payment being required, if (1) the Illinois General Assembly or the federal funding source fails to make an appropriation sufficient to pay such obligation, or if funds needed are insufficient for any reason (30 ILCS 500/20-60), (2) the Governor decreases the Agency’s funding by reserving some or all of the Agency’s appropriation(s) pursuant to power delegated to the Governor by the Illinois General Assembly, or (3) the Agency determines, in its sole discretion or as directed by the Office of the Governor, that a reduction is necessary or advisable based upon actual or projected budgetary considerations. Contractor will be notified in writing of the failure of appropriation or of a reduction or decrease.

4. STANDARD BUSINESS TERMS AND CONDITIONS

4.1. PAYMENT TERMS AND CONDITIONS:

4.1.1. LATE PAYMENT: Payments, including late payment charges, will be paid in accordance with the State Prompt Payment Act and rules when applicable. 30 ILCS 540; 74 III. Adm. Code 900. This shall be Vendor’s sole remedy for late payments by the State. Payment terms contained in Vendor’s invoices shall have no force or effect.

4.1.2. MINORITY CONTRACTOR INITIATIVE: Any Vendor awarded a contract of $1,000 or more under Section 20-10, 20-15, 20-25 or 20-30 of the Illinois Procurement Code (30 ILCS 500) is required to pay a fee of $15. The Comptroller shall deduct the fee from the first check issued to the Vendor under the contract and deposit the fee in the Comptroller’s Administrative Fund. 15 ILCS 405/23.9.

4.1.3. EXPENSES: The State will not pay for supplies provided or services rendered, including related expenses, incurred prior to the execution of this contract by the Parties even if the effective date of the contract is prior to execution.

4.1.4. PREVAILING WAGE: As a condition of receiving payment Vendor must (i) be in compliance with the contract, (ii) pay its employees prevailing wages when required by law, (iii) pay its suppliers and subcontractors according to the terms of their respective contracts, and (iv) provide lien waivers to the State upon request. Examples of prevailing wage categories include public works, printing, janitorial, window washing, building and grounds services, site technician services, natural resource services, security guard and food services. The prevailing wages are revised by the Illinois Department of Labor (DOL) and are available on DOL’s official website, which shall be deemed proper notification of any rate changes under this subsection. Vendor is responsible for contacting DOL at 217-782-6206 or (https://labor.illinois.gov) to ensure understanding of prevailing wage requirements.

4.1.5. FEDERAL FUNDING: This contract may be partially or totally funded with Federal funds. If Federal funds are expected to be used, then the percentage of the good/service paid using Federal funds and the total Federal funds expected to be used will be provided to the awarded Vendor in the notice of intent to award.

4.1.6. INVOICING: By submitting an invoice, Vendor certifies that the supplies or services provided meet all requirements of this contract, and the amount billed and expenses incurred are as allowed in this contract. Invoices for supplies purchased, services performed, and expenses incurred through June 30 of any year must be submitted to the State no later than July 31 of that year; otherwise Vendor may have to seek payment through the Illinois Court of Claims. 30 ILCS 105/25. All invoices are subject to statutory offset. 30 ILCS 210.

4.1.6.1. Vendor shall not bill for any taxes unless accompanied by proof that the State is subject to the tax. If necessary, Vendor may request the applicable agency’s Illinois tax exemption number and Federal tax exemption information.

4.1.6.2. Vendor shall invoice at this completion of the contract unless invoicing is tied in this contract to milestones, deliverables, or other invoicing requirements agreed to in the contract.

Send invoices to:

For procurements conducted in BidBuy, the Agency may include in this contract the BidBuy Purchase Order as it contains the Bill To address.

4.2. ASSIGNMENT: This contract may not be assigned or transferred in whole or in part by Vendor without the prior written consent of the State.

4.3. SUBCONTRACTING: For purposes of this section, subcontractors are those with contracts with an annual value exceeding $100,000 and who are specifically hired to perform all, or part of the work covered by this contract. Vendor must receive prior written approval before use of any subcontractors in the performance of this contract. Vendor shall describe, in an attachment if not already provided, the names and addresses of all authorized subcontractors to be utilized by Vendor in the performance of this contract, together with a description of the work to be performed by the subcontractor and the anticipated amount of money that each subcontractor is expected to receive pursuant to this contract. If required, Vendor shall provide a copy of any subcontracts within fifteen (15) days after execution of this contract. All subcontracts must include the same certifications that Vendor must make as a condition of this contract. Vendor shall include in each subcontract the Standard Illinois Certification form available from the State. If at any time during the term of the Contract, Vendor adds or changes any subcontractors, then Vendor must promptly notify, by written amendment to the Contract, the State Purchasing Officer or the Chief Procurement Officer of the names and addresses, the expected amount of money that each new or replaced subcontractor will receive pursuant to the Contract, and the general type of work to be performed. 30 ILCS 500/20-120.

4.4. AUDIT/RETENTION OF RECORDS: Vendor and its subcontractors shall maintain books and records relating to the performance of this contract and any subcontract necessary to support amounts charged to the State pursuant this contract or subcontract. Books and records, including information stored in databases or other computer systems, shall be maintained by the Vendor for a period of three (3) years from the later of the date of final payment under the contract or completion of the contract, and by the subcontractor for a period of three (3) years from the later of final payment under the term or completion of the subcontract. If Federal funds are used to pay contract costs, the Vendor and its subcontractors must retain their respective records for five (5) years. Books and records required to be maintained under this section shall be available for review or audit by representatives of the procuring Agency, the Auditor General, the Executive Inspector General, the Chief Procurement Officer, State of Illinois internal auditors or other governmental entities with monitoring authority, upon reasonable notice and during normal business hours. Vendor and its subcontractors shall cooperate fully with any such audit and with any investigation conducted by any of these entities. Failure to maintain books and records required by this section shall establish a presumption in favor of the State for the recovery of any funds paid by the State under this contract or any subcontract for which adequate books and records are not available to support the purported disbursement.