ESBD_428054_1749829132561_HHS0015751 Solicitation RFP.pdf

PCS 550 HHS RFP RFP. No. HHS0015751 Page 1 of 56 Version 2.30 Revision Date 04/28/2025

Cecile E. Young, Executive Commissioner

Request for Proposals (RFP)

For

Produce Solicitation for HSCS State Facilities

RFP No. HHS0015751

Date of Release: June 13, 2025

See Section 3.1 for Schedule of Events

NIGP Codes

390-28 Fruits, Fresh

390-29 Fruits, Fresh, Organic and Non-GMO (Genetically Modified Organism)

390-68 Salad Mix, Fresh

390-84 Vegetables, Fresh

390-85 Vegetables, Fresh, Organic and Non-GMO (Genetically Modified Organism)

PCS 550 HHS RFP RFP. No. HHS0015751 Page 2 of 56

Revision Date 04/28/2025

Table of Contents Article I. Executive Summary, Definitions, and Authority

1.1 Introduction

1.2 Definitions

1.3 Authority

Article II. Scope of Work

2.1 Statement of Work

2.1.1 Service Requirements

2.1.2 QE Service Locations

2.1.3 Contractor Requirements

2.1.4 Customer Service

2.1.5 Transition Period

2.1.6 Ordering Requirements

2.1.7 Order Placement, Lead Time, Adjustments/Cancellations of Orders

2.1.8 Item Availability

2.1.9 Item Additions

2.1.10 Price Modifications

2.1.11 Repackaging & Splitting of Cases

2.1.12 Packaging, Packing, Labeling and Markings

2.1.13 Delivery Instructions

2.1.14 Delivery Guidelines at State Facilities

2.1.15 Inspection and Receiving

2.1.16 Authorized Returns

2.1.17 Rejection and Return Procedures

2.1.18 Fill Rates

2.1.19 Food Defense

2.1.20 Product Quality

2.1.21 Quality Program

2.1.22 Warehousing and Sanitation Program

2.1.23 Product Source Sanitary Requirements

2.1.24 Recall Procedures Requirements

PCS 550 HHS RFP RFP. No. HHS0015751 Page 3 of 56

Revision Date 04/28/2025

2.1.25 Required Reports

2.1.26 Online Ordering Requirements

2.1.27 Deliverables

2.1.28 Acceptance Criteria

2.1.28 Invoicing

2.2 Contract Award, Term, and Historical Compensation

2.2.1 Contract Award and Execution

2.2.2 Contract Term

2.2.3 Historical Compensation

2.3 Data Use Agreement and Security Privacy Inquiry

2.4 No Guarantee of Volume, Usage, or Compensation

2.5 Governmental Entities

Article III. Administrative Information

3.1 Schedule of Events

3.2 Ambiguity, Conflict, or Discrepancy

3.3 Inquiries

3.3.1 Sole Point of Contact

3.3.2 Prohibited Communication

3.3.3 Exception to Sole Point of Contact

3.3.4 Solicitation Questions

3.4 Pre-proposal Conference

3.4.1 Attendance

3.4.2 Conference Logistical Information

3.4.3 Questions at Pre-Proposal Conference

3.5 Solicitation Response Composition

3.5.1 General Information

3.5.2 Page Limit and Supporting Documentation

3.5.3 Discrepancies

3.5.4 Exceptions

3.5.5 Assumptions

3.5.6 Binding Offer

PCS 550 HHS RFP RFP. No. HHS0015751 Page 4 of 56

Revision Date 04/28/2025

3.6 Solicitation Response Submission and Delivery

3.6.1 Deadline

3.6.2 Submission Option

3.6.3 Submission Checklist

3.6.4 Labeling and Delivery for USB Submission and Other Materials

3.6.5 Modifications and Withdrawals

Article IV. Solicitation Response Evaluation and Award Process

4.1 Conformance with State Law

4.2 Best Value Determination

4.2.1 Selection Methodology

4.2.2 Minimum Qualifications

4.2.3 Initial Compliance Screening

4.2.4 Written Solicitation Response Evaluation

4.2.5 Written Response Evaluation Criteria

4.2.6 Advancement Criteria

4.2.7 Best and Final Offer (BAFO)

4.2.8 Final Written Response Score

4.2.9 Summary of Best Value Determination

4.3 Questions or Requests for Clarification

Article V. Narrative/Technical Proposal

5.1 Narrative Proposal

5.1.1 Executive Summary

5.1.2 Experience and Demonstrated Ability

5.1.3 Project Work Plan

Article VI. Required Respondent Information

6.1 Company Information

6.1.1 Company Narrative

6.1.2 Company Profile

6.2 Franchise Tax – Right to Transact Business in Texas

6.3 References

6.4 Major Subcontractor Information

PCS 550 HHS RFP RFP. No. HHS0015751 Page 5 of 56

Revision Date 04/28/2025

6.5 Affirmations and Certifications

6.6 Other Reports

6.6.1 Dun and Bradstreet Reports

6.6.2 Financial Statements and Financial Solvency

6.6.3 Alternate Report

6.7 Corporate Guarantee

6.8 HUB Subcontracting Plan

6.9 Secretary of State Certification

Article VII. Cost Proposal

7.1 Cost Proposal

Article VIII. General Terms and Conditions

8.1 General Conditions

8.1.1 Changes, Modifications, and Cancellation

8.1.2 Offer Period

8.1.3 Costs Incurred

8.1.4 Contract Responsibility

8.1.5 Public Information Act - Respondent Requirements Regarding Disclosure

8.1.6 Respondent Waiver – Intellectual Property

8.1.7 Standards of Conduct for Vendors

8.1.8 Disclosure of Interested Parties

8.2 Insurance

8.2.1 Required Coverage

8.2.2 Alternative Insurability

8.3 Protest

Article IX. List of Exhibits

PCS 550 HHS RFP RFP. No. HHS0015751 Page 6 of 56

Revision Date 04/28/2025

ARTICLE I. EXECUTIVE SUMMARY, DEFINITIONS, AND AUTHORITY

1.1 INTRODUCTION

The Texas Health and Human Services Commission (“HHSC”) seeks a commercial distributor to supply a full-line of United States Department of Agriculture (“USDA”) Grade Number 1 or better-quality fresh fruits and vegetables (“FF&V”) to State-operated facilities, State Hospitals (SH)’s, State Supported Living Centers (SSLC)’s and related canteens.

HHSC is seeking to award one (1) or more Contracts necessary to serve all Qualified Entity (QE) service locations throughout the State contained in Section 2.1.2, (QE Service Locations) with produce distributors that can provide the required quality FF&V’s as available in Exhibit J, Produce Master List – Order Guide.

HHSC Procurement and Contracting Services (PCS) will administer the procurement process for this Solicitation, which includes RFP publication, handling of communications from vendors, as well as managing the receipt of Solicitation Responses for review and evaluation.

To be considered for award, a Respondent must execute Exhibit A, HHS Solicitation Affirmations Version 2.6 and provide all other required information and documentation as set forth in this Solicitation.

Information regarding HHSC and its programs is available online and can currently be accessed at https://hhs.texas.gov/.

1.2 DEFINITIONS

Refer to Exhibit B, Health and Human Services (HHS) Uniform Terms and Conditions (UTC) – Vendor, Version 3.4 for additional definitions.

As used in this Solicitation, unless a different definition is specified or the context clearly indicates otherwise, the following terms and conditions have the meanings assigned below:

“Addendum” means a written clarification or revision to this Solicitation issued by HHSC PCS and posted to the ESBD.

“Advancement Criteria” means the published criteria for Respondent to advance to the next phase of evaluation if multiple evaluation methods are utilized.

“AMS” refers to Agriculture Marketing Service, division of USDA.

“Award Consideration (AC) Documents” means documents Respondent must submit as part of the Solicitation Response to be considered for negotiations or award.

“Business Day(s)” means the official working days of the week to include Monday through Friday, except for legal holidays observed by the State of Texas.

“Business Hours” means from 8:00 a.m. to 5:00 p.m. local time, Monday through Friday excluding Saturday, Sunday, and State-approved holidays (i.e., federal, state, or agency-designated holidays).

“Calendar Days(s)” means all the days of the year, including, weekdays, weekends, and holidays.

“Competitive Range” has the same meaning as the definition under Title 1 of the Texas Administrative Code Part 15, Chapter 391, Subchapter A, §391.107(3).

https://hhs.texas.gov/ https://texas-sos.appianportalsgov.com/rules-and-meetings?$locale=en_US&interface=VIEW_TAC_SUMMARY&queryAsDate=04%2F23%2F2025&recordId=208793 https://texas-sos.appianportalsgov.com/rules-and-meetings?$locale=en_US&interface=VIEW_TAC_SUMMARY&queryAsDate=04%2F23%2F2025&recordId=208793

PCS 550 HHS RFP RFP. No. HHS0015751 Page 7 of 56

Revision Date 04/28/2025

“Contract Unit Price” means the all-inclusive price per unit of a particular item charged to the state for a product delivered to QEs under this contract.

“Contract Term” means the period of time beginning with the commencement date or Effective Date of a Contract and ending when the Contract expires in accordance with its terms, or when it has been terminated.

“Discount” means a reduction of cost, price or percentage of the cost of a good or a service.

“Effective Date” has the same meaning as the definition in Exhibit B, Health and Human Services (HHS) Uniform Terms and Conditions – Vendor, Version 3.4.

“EPA” refers to the Environmental Protection Agency.

“ESBD” means the Electronic State Business Daily, the electronic marketplace where State of Texas bid opportunities over $25,000 are posted. The ESBD may currently be accessed at https://www.txsmartbuy.gov/esbd.

“Final Written Response Score” refers to the final scoring of the written response as documented in the Solicitation.

“FDA” means Food and Drug Administration.

“FOS NFS” Health and Human Services, Health and Specialty Care, Facility Operation Support Nutrition and Food Service. This consists of the Director, Contract Manager and Quality Assurance Specialists.

“GAP” means USDA Good Agricultural Practices. GAP are USDA voluntary guidelines for the fruit and vegetable industry to verify an operation’s efforts to minimize the risk of contamination of fresh fruits, vegetables and nuts by microbial pathogens. The USDA GAP program verifies the Contractor has taken proactive measures to reduce the risk of contamination by adhering to generally recognized industry best practices. The responsibility for product safety and the continued observance of best practices rests with the Contractor producing and handling the fresh product.

“GMP” means Good Manufacturing Practices.

“HHSC” means the Health and Human Services Commission.

“HHSC PCS” means Procurement and Contracting Services (PCS), a division of HHSC.

“HSCS” means Health and Specialty Care System, a division of TX HHS, which directs the State Hospitals and State Supported Living Centers.

“HUB” has the same meaning as the definition in Exhibit B, Health and Human Services (HHS) Uniform Terms and Conditions – Vendor, Version 3.4.

“HUB Subcontracting Plan” or “HSP” means written documentation regarding the use of subcontractors, which is required to be submitted with all responses to state agency contracts with an expected value of $100,000 or more where the state agency has determined subcontracting opportunities are probable. The HSP subsequently becomes a provision of the awarded Contract and shall be monitored for compliance by the state agency during the term of the Contract.

“List Price” means the price of a product that is displayed on the vendors catalog or website.

https://www.txsmartbuy.gov/esbd

PCS 550 HHS RFP RFP. No. HHS0015751 Page 8 of 56

Revision Date 04/28/2025

“Order Guide” means the electronic/online listing of items and Contract Unit Prices available for ordering under this contract.

“OSHA” means Occupational Safety and Health Administration.

“PACA” Perishable Agricultural Commodities Act.

“QAS” means Quality Assurance Specialist.

“QE” Qualifying Entities, the SH and SSLCs and canteens, etc. which are served by this contract, and are governed by HHS HSCS.

“Respondent” means the individual or entity responding to this Solicitation.

“Software-as-a-Service” or “SaaS” means the service model described by the National Institute of Standards and Technology (NIST) in Special Publication No. 800-145 (https://csrc.nist.gov/pubs/sp/800/145/final) to be the capability provided to the consumer to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through a thin client interface such as a web browser (e.g., web-based e-mail). The consumer does not manage or control the underlying cloud infrastructure including network, servicers, operating systems, storage or even individual application capabilities, with possible exception of limited User-specific application configuration settings.

“Solicitation” means this RFP including all exhibits, attachments, forms, and Addenda, if any.

“Solicitation Consideration (SC) Documents” means documents that must be submitted by Respondent with the Solicitation Response in order to be considered for evaluation and cannot be resubmitted or have errors remedied after the submission due date and time in the Schedule of Events has passed.

“State” means the State of Texas and its instrumentalities, including HHSC, and any other state agency, its officers, employees, or authorized agents.

“Total Score” means the Final Written Response Score plus any additional points for secondary evaluation activities, as outlined by this Solicitation.

“VPTS” means Vendor Performance Tracking System, as defined under Section 2262.055 of the Texas Government Code and Title 34 of the Texas Administrative Code Part 1, Chapter 20, Subchapter B, Division 2, § 20.115 and Subchapter F, Division 2, § 20.509.

1.3 AUTHORITY

HHSC is soliciting the Services listed herein pursuant Tex. Gov’t Code § 2155.144(b), (b-1) (2).

https://statutes.capitol.texas.gov/Docs/GV/htm/GV.2262.htm#2262.055 https://texas-sos.appianportalsgov.com/rules-and-meetings?$locale=en_US&interface=VIEW_TAC_SUMMARY&queryAsDate=04%2F23%2F2025&recordId=201945 https://texas-sos.appianportalsgov.com/rules-and-meetings?$locale=en_US&interface=VIEW_TAC_SUMMARY&queryAsDate=04%2F23%2F2025&recordId=215907

PCS 550 HHS RFP RFP. No. HHS0015751 Page 9 of 56

Revision Date 04/28/2025

ARTICLE II. SCOPE OF WORK

2.1 STATEMENT OF WORK

2.1.1 Service Requirements

Contractor will be required to source, purchase, store, and deliver a variety of FF&V items to QEs on an ongoing basis, while at the same time maintaining acceptable fill rates, levels of customer service, and product quality.

Contractor will:

a. Provide quality FF&V USDA Grade Number 1 or greater as specified in USDA Grades and Standards.

b. Maintain acceptable fill rates and provide a wide range of FF&V items in sufficient quantities to fill all Contract requirements and maintain the overall 98% fill rate for each Qualifying Entity (QE).

c. Provide at least one full-time Customer Service representative to maintain continuous contact with all the ordering QEs, as well as at least one back-up representative, both with at a minimum three (3) years of experience with the training and expertise in the distribution of produce necessary to maintain the desired product quality and fill rates at each of the QEs.

2.1.2 QE Service Locations

All QE service locations are located in the geographical State of Texas. The locations include canteens, coffee shops and other entities and are located on campuses within HHSC’s Health and Specialty Care System which include State Hospitals, SSLCs for individuals with intellectual and developmental disabilities as well as State psychiatric hospitals and a residential unit for adolescents. Other State-operated facilities may be added during the Contract Term with the approval from FOS NFS and in agreement with the Contractor. Service locations can be selected utilizing Exhibit I, QE Service Location and Selection Form.

2.1.3 Contractor Requirements

Contractor must:

a. Provide either a website link or a product catalog that includes the contractor’s List Prices per QE, including initial prices and each time pricing is updated for the FF&V items listed in Exhibit J, Produce Master List - Order Guide.

b. Maintain a physical location that serves as a commercial warehouse or distribution center of FF&Vs. It is neither sufficient nor acceptable for a Contractor 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.).

https://www.ams.usda.gov/grades-standards https://www.ams.usda.gov/grades-standards

PCS 550 HHS RFP RFP. No. HHS0015751 Page 10 of 56

Revision Date 04/28/2025

c. Provide all logistics and transportation resources needed to move product from source to QE including refrigerated trucks and equipment as needed to maintain quality and freshness of FF&Vs.

d. Meet the technical requirement of being a functioning commercial FF&V distributor with a current, valid Perishable Agricultural Commodities Act (“PACA”) license.

e. Possess a food manufactures license and/or a food wholesalers license pursuant Title 25 Texas Administrative Code §229.182 and comply with Current Good Manufacturing Practices (CGMP) pursuant Title 25 Texas Administrative Code §229.183.

f. Provide all labor, tools, equipment, materials, and supplies, as necessary, to supply FF&V to QEs including the supervision of its employees and subcontractor employees.

g. Maintain delivery schedules as agreed upon at initial kickoff meeting with Contractor.

h. Maintain fill rates set forth in Section (2.1.18 Fill Rates) at each QE.

i. Provide an active telephone service answered during Business Hours by a Customer

Service representative set forth in Section 2.1.1 (Service Requirements (c)).

2.1.4 Customer Service

Contractor shall ensure::

a. FOS NFS may conduct periodic food menu boards and similar meetings that the Contractor may be required to attend. At these meetings, the QEs typically review their internal business practices and may request that the Contractor show new products, demonstrate produce preparation, and/or provide nutritional information. Contractor shall visit QEs as directed by the QE or FOS NFS when it is determined that there is a need for a visit to the QEs site.

b. Using its expertise in the industry, Contractor shall assume the responsibility of introducing new FF&V items to the QEs, as well as to show cost-effective alternatives to their current choices, if the OE so desires. However, the decision as to which items are ultimately included in the Ordering Catalog are at the discretion of the QEs, RAC and

FOS NFS.

2.1.5 Transition Period

The delivery start date will be determined at initial kickoff meeting with Contractor which will be scheduled no later than ten (10) Business Days after Contract Execution. Contractor shall provide a delivery and set-up plan and a fully functional distribution account in place for all QEs covered under the Contract(s) ten (10) Business Days after the initial kickoff meeting and ten

(10) Business Days prior to the delivery starting date or as agreed upon.

Contractor should provide 90 percent of items in lines 1 through 93 from Exhibit J, Produce Master List - Order Guide and these items should be available for service or delivery. Lines 94

– 111 of the Order Guide are items which may or may not be available from every Contractor.

Contractors shall meet QE preferred delivery days. Start-up delivery days will be agreed upon at kickoff meeting and can be changed during the course of the Contract by mutual agreement https://www.ams.usda.gov/rules-regulations/paca/licensing https://texas-sos.appianportalsgov.com/rules-and-meetings?$locale=en_US&interface=VIEW_TAC_SUMMARY&queryAsDate=05%2F19%2F2025&recordId=158917 https://texas-sos.appianportalsgov.com/rules-and-meetings?$locale=en_US&interface=VIEW_TAC_SUMMARY&queryAsDate=05%2F19%2F2025&recordId=158917 https://texas-sos.appianportalsgov.com/rules-and-meetings?$locale=en_US&interface=VIEW_TAC_SUMMARY&queryAsDate=05%2F19%2F2025&recordId=113798

PCS 550 HHS RFP RFP. No. HHS0015751 Page 11 of 56

Revision Date 04/28/2025 between the Contractor and each of the QEs. If delivery dates cannot be agreed upon within ten

(10) business days, FOS NFS needs to be notified to resolve and schedule delivery dates.

Prior to commencement of the first order, FOS NFS, QEs, and the Contractor will collaborate to identify items not found in the solicited Order Guide and propose substitutions that will potentially be added to the Order Guide. In an effort to maintain updated Order Guides with items that were not required previously due to seasonality and other contingent circumstances, items may be added to the Order Guide per Section 2.1.9 (Item Additions).

2.1.6 Ordering Requirements

Contractor will be required to maintain an online Order Guide, available to the QEs that list all items, in addition but not limited to:

a. Product Category

b. Product description

c. Packaging characteristics

d. Vendor Item Code

e. Unit of Measure

f. Unit price.

Contractors servicing a single QE may have the option to provide a written printable Order Guide with a clear ordering process on approval of FOS NFS and the QE.

2.1.7 Order Placement, Lead Time, Adjustments/Cancellations of Orders Contractor must ensure:

Orders which are submitted by a QE utilizing the Contractor’s ordering system, may be cancelled by a QE up to 24 hours before scheduled delivery via written notification to the Contractor. Within less than 24 hours from delivery, an order may be cancelled by mutual agreement between the QE and the Contractor.

In the event of a major or catastrophic event, the specific situation regarding a cancelled delivery, within less than 24 hours, will be dealt with in an equitable manner by FOS NFS, who has the ultimate authority and discretion to resolve said issues.

Adjustments to the order shall be allowed to be made three (3) days prior to the designated delivery date. Adjustments may be made in accordance with the Contractors ordering system criteria in addition to notifying Contractor via written notification of the adjustment.

2.1.8 Item Availability

Contractor must provide FF&Vs to the selected QEs pursuant to Exhibit J, Produce Master List – Order Guide. Contractors shall notify the QE within 72 hours of required delivery date/time of the non-availability of any particular ordered item, whether in whole or in part. The QE may choose to replace the non-available item with another item from the Contractors catalog

PCS 550 HHS RFP RFP. No. HHS0015751 Page 12 of 56

Revision Date 04/28/2025 by placing a new, separate order for the item, as applicable. Assuming the proper procedure is followed, this circumstance (i.e., replacement of a not in stock “NIS” item with a separate order for another catalog item) will not negatively impact a Contractor's fill rate.

Due to the unique seasonal nature and multitude of factors affecting the availability of fresh produce, the State reserves the right to procure from local vendors to insure consistent quality produce availability for the QEs. If a contracted product becomes unavailable, Contractor may provide a product of similar description and quality.

Should four (4) deliveries pass with the original product being unavailable, the substitution, on approval from the QE and FOS NFS may be added as the permanent contracted item. If a suitable substitution cannot be agreed upon by the QE, the item will be deleted.

2.1.9 Item Additions

Contractor shall send an email to QE and FOS NFS mailboxes requesting all item approvals, including but not limited to:

a. New additions

b. Changes to an existing item, such as pack size, pricing, etc.

c. Changes to Order Guide for maintenance or adding/deleting items.

Neither a Contractor nor QEs are permitted to add new items to the Order Guide without initiating a new item request and approval to FOS NFS.

Contractor will have a maximum of twenty (20) days to source and fulfill order of an approved FF&V item that is not a part of the Order Guide.

The final step prior to the item being “live” on the Order Guide and available to QEs is for FOS NFS to negotiate and determine the item's price. Once this is complete, the item should remain constant within the Contractor's inventory, subject to limited, seasonal and other availability issues.

All request must include:

a. Product category

b. Item description including:

1. Quality grade of the item.

2. Packaging characteristics

3. Item code

4. Unit of Measure

5. Proposed unit price

c. If Contractor has never purchased item before, Contractor must provide proposed unit price with a corresponding supplier invoice or quote including discounts/rebates. (quotes permitted in very limited circumstances as approved by RAC or FOS NFS; e.g., PCS 550 HHS RFP RFP. No. HHS0015751 Page 13 of 56

Revision Date 04/28/2025

d. Requests are due by 5 p.m. Central Time (CT) on either the first or third Tuesday of each month. Determinations will be issued by 12 p.m. Central Time the following Tuesday, with any changes taking effect at 6 a.m. Central Time on Wednesday.

e. FOS NFS will review the Ordering Guide addition request and after determining the price will contact the Contractor to indicate acceptance. The Contractor shall then include the item on the next scheduled Order Guide update after the request is approved.

f. Should the proposed price fail to be determined, FOS NFS will conduct negotiations with the Contractor. If, after negotiations, the proposed price cannot be determined the item will not be added to the Order Guide.

2.1.10 Price Modifications

All invoice pricing will be based upon the Contract Unit Price at the time of order by the QEs.

For example, for any item ordered on a Friday to be delivered the following ordering period, pricing will be based upon the Order Guide price in effect the day of order (Friday in this example), regardless of whether the Contract Unit Price for that item subsequently changes as part of the next ordering period's Order Guide updates.

Contractor may request price modifications to the Contract Unit Price 30 days after Contract Execution by submitting a written request to FOS NFS.

a. Contractor is permitted to submit an adjustment request once a month for any items found on the Order Guide when consistent with actual price changes of said items encountered by the Contractor as reflected in the commercial market.

b. Acknowledging the fluctuation in produce pricing, proposed pricing in the solicitation response will be considered effective throughout the first 30 days from the Contract Effective Date. The first price adjustment request may be submitted on the first Tuesday of the month. The first price change adjustment if approved will commence on the second Wednesday of the month.

c. Contractor must submit product information with the current price and the suggested price being sought including discounts and rebates if available.

d. Prices are to be adjusted downward or upward, as appropriate, according to the last agreed upon price.

e. If a price change request and notification should fall on a designated Monday holiday, the information will be relayed the following day, on Tuesday by 12 noon Central Time.

f. Requests may be submitted electronically the first Tuesday of each month by 5 p.m.

Central Time. Prices are reviewed and confirmation of change will be sent electronically to each vendor with a request by 5 p.m. Central Time on the second Monday of each month.

g. If confirmed, pricing will take effect on the second Wednesday, beginning at 6 a.m.

Central Time for all orders submitted after this time until the next price modification request.

PCS 550 HHS RFP RFP. No. HHS0015751 Page 14 of 56

Revision Date 04/28/2025

h. If the new requested price cannot be agreed upon, the last approved price will remain effective and supported until a new price is submitted and approved.

i. In a circumstance where an item's price is “held over” from a prior month period, having not been adjusted due to FOS NFS rejection of a subsequent monthly price adjustment, current pricing must be adhered to until determination of availability of the item.

j. Contractor shall not use a “held over” price to overcharge the State 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.

k. At any time, a price change request of 10% more than the current price for an item, Contractor shall submit documentation as described below must accompany the request:

l. FOS NFS, 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.

m. Upon notice from the State that supporting data is required, the Contractor shall promptly furnish to FOS NFS, 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.

n. Price change requests that FOS NFS questions or finds to be inconsistent with the requirements of this provision shall not be posted until authorized by FOS NFS.

o. If the FOS NFS does not notify the Contractor that a price or a price change request is being questioned or has been found to be erroneous by 5 p.m. Central Time on the second Monday after the price change submission, the price change(s) will post to the Order Guide on the immediate Wednesday, of the second week.

p. Should the FOS NFS 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 acceptable, such as when the changed price(s) is(are) higher than delivered prices for items of comparable quality, which are reasonably available to the State or Contractor from other sources, FOS NFS will notify the Contractor if the price change has been approved or denied, no later than the second Monday after price change submission.

q. If the FOS NFS cannot determine a price to be fair and reasonable, the Contractor and FOS NFS may reject the price change request. In such cases, the FOS NFS may provide written notice that the item will remain on the Order Guide at the most recently approved price, provided it aligns with current market conditions. Alternatively, the FOS NFS may authorize the removal of the item from the Order Guide.

r. In the event of a price change not posting or a Contractors catalog and Ordering Guide 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 FOS NFS in writing and promptly thereafter correct its Order Guide.

PCS 550 HHS RFP RFP. No. HHS0015751 Page 15 of 56

Revision Date 04/28/2025

s. In the event of an erroneous price increase in the Order Guide, the Contractor shall submit a refund, including interest if applicable, for any amounts paid to the Contractor resulting from the erroneous price.

t. In the event of an erroneous price decrease in the Order Guide, the Contractor may submit a request for an equitable adjustment in the amount of the undercharge for consideration by FOS NFS. The request may be entertained if the Contractor can demonstrate to the satisfaction of FOS NFS 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.

u. FOS NFS may conduct price verification analysis at a time agreed upon by Contractor and

FOS NFS.

v. FOS NFS reserves the right to conduct additional price audits as necessary as FOS NFS discretion to verify price accuracy and potentially recoup any overcharges. In such instances, the Contractor will be required to submit invoices and any other supporting price documentation that FOS NFS requests.

2.1.11 Repackaging & Splitting of Cases

For some items, QEs may require smaller pack sizes than are commonly available in the commercial marketplace. Such items may be added at a later date during an FOS NFS Order Guide update with approval of RAC. It is incumbent on the Contractor to determine how it will supply these items in accordance with the required pack sizes. In so doing, the Contractor may decide to split cases and repackage product at its own facility.

Splitting cases and repackaging product, as described in the preceding paragraph, do not constitute processing. Accordingly, the Contractor may not include any costs associated with its own in-house splitting of cases and repackaging product in the Contractor Price. An agreed upon split packaging item will be added as a line item on the contract, available to all QEs of the contractor’s service and not subject to further charges.

2.1.12 Packaging, Packing, Labeling and Markings

All labeling, packaging, and packing shall be in accordance with good commercial practices.

Shipping containers shall comply with the National Motor Freight Classification and Uniform Freight Classification Code. At a minimum, product must be labeled on outer carton with the following information:

a. Description of contents including a bill of lading (BoL) or shipment manifest.

b. Agency purchase order or order number.

c. Quantity per carton.

d. Full pallets must be labeled and it is the preference to be shrink wrapped. Shrink wrap is not required as long as the produce is in good condition as stated in Section 2.1.13 (Delivery Instructions).

e. Storing and handling instructions such as “Keep Refrigerated”.

PCS 550 HHS RFP RFP. No. HHS0015751 Page 16 of 56

Revision Date 04/28/2025

2.1.13 Delivery Instructions

Contractors shall ensure all products are delivered in sanitary trucks that are of a commercially acceptable standard and drivers are in compliance with Texas Department of Transportation and Texas Department of Public Safety regulations. Delivery instructions include but are not limited to:

a. All delivery trucks must be equipped with a lift gate to expedite the offloading of products.

b. Trucks shall maintain proper temperatures in accordance with standard commercial practices.

c. Delivery will be completed when the Contractor has unloaded the order(s) from the vehicle and placed them on the dock, and QE receiving personnel has accepted the delivery ticket.

d. All items will be delivered to QE locations free of damage and with all packaging and packing intact.

e. Contractor shall remove all excess pallets used for delivery and ensure to clean up and dispose waste from the delivery point. together to ensure with clean up and proper disposal of any site work waste.

f. Contractor must follow QEs delivery schedules (days and times), routes, and stop-off sequences will be coordinated and verified with the QE. In general, each QE receives one delivery per week. However, these schedules may be revised as necessary on a case-by-case basis at the approval of the QE at no additional cost to the state.

g. In some cases, it is required that Contractor contact the QE point of contact specified on the order or Purchase Order to set up a delivery appointment or to get instruction and approval to access HHSC campuses for delivery.

h. Deliveries are to be made between 7:00 a.m. and 4:00 p.m. Central Time on date specified, or as agreed with receiving QE staff.

i. All orders are to be delivered on the specified delivery date, except for state holidays, as outlined below. When a scheduled delivery day falls on one of these days, delivery should occur on the next business day, unless otherwise agreed to by the QE.

1. New Year's Day, Labor Day, Martin Luther King Jr's Birthday, Presidents' Day, Veterans Day, Memorial Day, Thanksgiving Day and the day following, Christmas Day, and Independence Day.

j. All deliveries shall arrive ON TIME as requested by HHSC. It is the Contractors responsibility to contact the QE point of contact specified if unforeseen circumstances arise that may cause a delivery to be late.

k. Contractor shall protect all products that are susceptible and sensitive to temperature must be protected by any means to prevent damage/temperature abuse.

l. Products for individual customers/dining facilities must be segregated. If the QE has more than one delivery point. All products shall be palletized and segregated by drop-off

PCS 550 HHS RFP RFP. No. HHS0015751 Page 17 of 56

Revision Date 04/28/2025 point and loaded into the delivery vehicle in reverse drop sequence. The intent is to provide expeditious off-loading capability and delivery to the QEs.

m. Fresh Fruits and Vegetables (FFV) in most cases cannot be double stacked due to nature of product. Material will be palletized to maximize use of pallet based on quantity ordered. Palletized FFV should be standard 60” high to include pallet and will not exceed 80” height including pallet based on type of item.

n. For all other items, palletization shall be in accordance with good commercial practices.

Pallet height should not exceed 60”, including the pallet. Items must be mechanical shrink-wrapped.

o. Cases may be mixed on the pallet but are to be skillfully built to protect the product and case integrity as to allow the receiver to out check/in check all items on that pallet.

p. Contractor shall ensure that the personnel loading and delivering the product provide professional, prompt, and efficient service to the QE. Failure to adhere to these standards will be reported to the QE Representative by the affected QE(s) whereby appropriate corrective action will be coordinated with the Contractor.

q. The Contractor’s drivers are responsible for unloading all products from trucks expeditiously and are required to deliver product to the QEs designated docks or storage areas. Unsecured products shall never be left unattended unless previously planned for and/or approved by mutual agreement of the facility and Contractor.

2.1.14 Delivery Guidelines at State Facilities

Contractor shall ensure delivery driver’s meet the following:

a. observe all posted speed limits. Speed limits are strictly enforced.

b. Observe all stop signs and other traffic controls.

c. Parking must be in area designated by Food Service or Warehouse staff.

d. Vehicles must be locked, and keys removed at all times when unattended.

e. Pedestrians have the right-of-way at all times. Drive with extreme caution and be prepared to cope with unexpected circumstances.

f. Firearms and alcoholic beverages are forbidden on campus.

g. Tools and equipment must be properly secured at all times.

h. No smoking.

i. Contact with residents is forbidden. Do not offer anything to residents.

j. If you require assistance with a resident/client, notify Food Service or Warehouse staff.

2.1.15 Inspection and Receiving

The QE designee authorized by the QE at each delivery point is responsible for inspecting and accepting products as they are delivered, including but not limited to:

PCS 550 HHS RFP RFP. No. HHS0015751 Page 18 of 56

Revision Date 04/28/2025

Contractor must ensure:

a. Items included in the BoL or shipment manifest be tallied and inspected prior to accepting delivery.

b. Shipment is reconciled with the requirements from Section 2.1.12 (Packaging, Packing, Labeling and Markings).

c. Product is inspected upon receipt as promptly as practicable. However, failure to promptly inspect or accept supplies will not relieve the Contractor from responsibility, nor impose liability on any of the QEs, for nonconforming supplies.

d. All overages, shortages, returns and/or spoils are noted on the delivery ticket by the receiving official and truck driver; such items may be returned or rejected from delivery.

e. QE designee will ensure product received is the same as specified in the Order Guide and purchase order.

f. Product that does not meet the specifications listed in the Order Guide; the QE will immediately contact the vendor to seek a resolution.

g. Product that are in good condition may be accepted, while any damaged portions of the shipment may be returned.

h. All adjustments to shipments be forwarded to the RAC for accurate billing and recordkeeping.

i. Upon inspection and confirmation of shipment a hand signed and or digital acceptance signature be provided to driver.

j. That both the receiving official's and the truck driver's signature, printed name, and title are legible.

k. Proof of Delivery document (PoD) and related information be attached to invoice and may be submitted for payment until once acceptance is verified.

2.1.16 Authorized Returns

The Contractor shall accept returns under the following conditions:

a. Products shipped in error.

b. Products damaged in shipment.

c. Products with concealed or latent damage.

d. Products that are recalled.

e. Products that do not meet shelf-life requirements.

f. Products that do not meet the minimum quality requirements as defined for the items listed in the Order Guide.

g. Products delivered in unsanitary delivery vehicles.

h. Products delivered that fail to meet the minimum/maximum specified temperature.

PCS 550 HHS RFP RFP. No. HHS0015751 Page 19 of 56

Revision Date 04/28/2025

i. Quantity excess as a result of an order error by the Contractor.

j. Products that are not from a sanitarily approved source.

k. Any other condition not specified above that is deemed by the QE to be valid reasons for return.

2.1.17 Rejection and Return Procedures

In the event an item is returned for any of the reasons specified in Section 2.1.16 (Authorized Returns) the proof of delivery and invoice shall be annotated as to the item(s) rejected/returned, including but not limited to:

a. Items shall then be deducted from the PoD/invoice.

b. Invoice total must be adjusted to reflect the correct dollar value of the shipment.

c. Replacements will be authorized based on the QEs needs.

d. On an as needed basis determined by QE need/request, a re-delivery of items that were previously rejected shall be made.

e. The re-delivered items will be delivered under a separate invoice utilizing the same call number, contract line-item number, and purchase order number for the discrepant line.

f. In the event a product is rejected after initial delivery is made, the Contractor will pick up the rejected product or make other disposition arrangements deemed acceptable by the

QE.

2.1.18 Fill Rates

Contractor shall calculate order fill rates on a per order basis and tracked for quarterly submission to FOS NFS to ensure accuracy in the Contractor's reported fill rates, FOS NFS will utilize its own internal data for comparison purposes. Contractor is required to maintain at a minimum a 98.0% fill-rate for their QEs combined.

The fill rate shall be calculated as follows and shall not include mis-picks, damaged cases or rejected items (No other method of calculating fill rate will be accepted): Cases Accepted / Cases Ordered * 100 = Fill Rate % (Cases Accepted: Product that the QE has received and receipted not including damaged cases, rejected items, or mis-picks)/(Cases Ordered: Product ordered by a QE) The Contractor will submit a monthly report per QE to FOS NFS with the following information:

a. Fill Rate.

b. List of all items that were Not in Stock, Returned, Damaged, and/or Mis-picked.

2.1.19 Food Defense

Contractor must ensure that products and/or packaging have not been tampered with or contaminated throughout the growing, storage, and delivery process. The Contractor must

PCS 550 HHS RFP RFP. No. HHS0015751 Page 20 of 56

Revision Date 04/28/2025 immediately inform the QE of any attempt or suspected attempt by any party or parties, known or unknown, to tamper with or contaminate subsistence supplies.

2.1.20 Product Quality

a. Pathogens: The Contractor will use prevailing commercial practice for testing of pathogens including, but not limited to, E. Coli, Listeria Monocytogenes, Salmonella, Shigella, and Coagulase Positive Staph Aureus.

b. Shelf-life: All products delivered shall be as fresh as possible and within the Growers/Packers' original shelf life (i.e., Best if Used- by-Date, Expiration Date, or other markings). Applicable products shall be identified with readable open code such as “Best-Used-by- Date”, “Sell-by-Date”, date of production, or similar marking indicating the end of the guaranteed freshness date. In addition, the Contractor must comply with the following shelf-life requirements for fresh-cut fresh fruits and vegetables, ready-to-eat salads, coleslaw, in addition but not limited to:

1. Individual bags/containers must be marked with a 14-day shelf life from the date of production.

2. All products must be received by the QE with at least 50% of recommended shelf life remaining. If the manufacturer-recommended shelf life is less than 14 days, the QE must be notified in advance and approve the shelf-life.

3. Any deviation from these requirements must be approved prior to QE delivery, in writing, by QE.

2.1.21 Quality Program

Contractor shall maintain a quality program for the product acquisition, warehousing, and distribution to assure the following:

a. Standardized product quality.

b. Wholesome product by veterinary standards.

c. The usage of First-In, First-Out (“FIFO”) principles and/or First-Expired, First-Out

(“FEFO”).

d. Product shelf life managed and monitored (by date of pack/production of the item).

e. Items are free of damage.

f. Correct items and quantities are selected and delivered.

g. Customer satisfaction is monitored.

h. Product discrepancies and complaints are resolved, and corrective action is initiated.

i. Supplier or FDA initiated food recalls are promptly reported to QEs and FOS NFS.

j. Compliance with EPA and OSHA requirements.

k. Distressed or salvaged items or products shall not be used.

PCS 550 HHS RFP RFP. No. HHS0015751 Page 21 of 56

Revision Date 04/28/2025

l. A manufacturer, grower, private label holder or redistributor selection or certification program be used to ensure standardized product quality for each item supplied and/or listed in the stock catalogs, regardless of supplier.

m. The product quality shall be equal to that described in the Order Guide item specification and specified US Grade Standard.

n. Applicable food products delivered originate from a source listed in the USDA-AMS Good Agricultural Practices (“GAP”) Verification Directory or the USDA-AMS Good Manufacturing Practices (“GMP”) Verification Directory for fresh fruits and vegetables, as applicable. Bulk Fresh fruits and vegetables suppliers must be inspected and listed under the USDA-AMS GAP and/or the GMP Directory.

o. Hazard Analysis and Critical Control Point (“HAACP”) protocol, if applicable.

p. Commercial standards are used to maintain temperatures appropriate for individual items.

q. Contractor shall maintain a USDA GAP/GMP certificate AND be listed in the USDA-

AMS GAP or GMP Verification Directory for a full range of fresh fruits and vegetables throughout the Contract Term. The USDA GAP/GMP certificate must demonstrate a passing score, and specifically passing with respect to the following parts:

1. General, Wholesale Distribution

2. Preventive Food Defense

p. Failure to obtain and maintain a USDA GAP/GMP certificate will be considered a breach of contract. Further information, including inspection requirements, can be found at https://www.ams.usda.gov/services/auditing/gap-ghp

2.1.22 Warehousing and Sanitation Program

Contractor shall maintain a sanitation program and a stored product pest management program for food and other co-located non-food items that comply with industry standard programs such as CGMP in Manufacturing, Packing, or Holding Human Food, as well as all pertinent federal, state, and local laws and regulations.

Contractor shall maintain records of inspections performed by the Contractor, its subcontractor, or other recognized industry association hired by the Contractor. Contractor shall make records available to FOS NFS upon request.

2.1.23 Product Source Sanitary Requirements

Contractor shall ensure:

Applicable food products (food products include bulk fresh fruits and vegetables), including pre-cut and packaged fruits, vegetables and salads, mushrooms, sprouts, etc., delivered to QEs listed in this solicitation, as well as any QE added at a later date, shall originate from an establishment (this includes suppliers/subcontractors or direct farm deliveries) which has been inspected under the guidance of the United States Department of Agriculture (“USDA”).

https://www.ams.usda.gov/services/auditing/gap-ghp

PCS 550 HHS RFP RFP. No. HHS0015751 Page 22 of 56

Revision Date 04/28/2025

Guidance for fresh fruits and vegetables is the USDA-AMS Good Agricultural Practices (“GAP”) Verification Directory or the USDA-AMS Good Manufacturing Practices (“GMP”) Verification Directory for fresh fruits and vegetables, as applicable. Bulk Fresh fruits and vegetables suppliers must be inspected and listed under the USDA-AMS GAP and/or the GMP Directory.

Delivery conveyances: The supplies delivered under this Contract shall be transported in delivery conveyances maintained to prevent tampering with and /or adulteration or contamination of the supplies, and if applicable, equipped to maintain a prescribed temperature. The delivery conveyances shall be subject to inspection by the government at all reasonable times and places.

When the sanitary conditions of the delivery conveyance have led, or may lead to product contamination, adulteration, constitute a health hazard, or the delivery conveyance is not equipped to maintain prescribed temperatures, or the transport results in product `unfit for intended purpose', supplies tendered for acceptance may be rejected without further inspection.

2.1.24 Recall Procedures Requirements

In the event that a product recall is initiated by the USDA, the Contractor, or the Contractor's supplier or manufacturer, shall follow the procedures as outlined below:

a. Immediately notify the following personnel:

1. Qualifying Entities that have received the recalled product.

2. FOS NFS.

b. Provide the following information:

1. Reason for the recall.

2. Type of recall, i.e., Type I, II or III.

3. Description of product.

4. Amount of Product.

5. List of QEs that have received product.

6. Name and phone number of responsible person (Recall Coordinator).

c. Contractor shall provide a Final Status Report of Recall, when completed, to FOS NFS which includes unit of measure, quantity currently in stock, list of QEs that received product:

1. QEs name and location.

2. DHHS purchase order number.

3. Vendor invoice number.

4. Item stock number.

5. Quantity shipped.

6. Date shipped.

7. Value of affected product.

PCS 550 HHS RFP RFP. No. HHS0015751 Page 23 of 56

Revision Date 04/28/2025

8. Amount of credit due.

d. At the discretion of the affected QEs, Contractor shall either replace the…