ESBD_File_336483_5510000149_Commercial_Warehouse_and_Food_Distribution_Services.docx

Texas Department of Agriculture Purchasing and Contracting Office 1700 N. Congress Avenue Austin, Texas 78701

REQUEST FOR PROPOSAL (RFP)

#5510000149 Commercial Warehouse and Food Distribution Services NIGP Class-Items:

958-94 Warehouse Management Services 962-40 Food Distribution Services Issue Date: September 15, 2023 Response Deadline: October 13, 2023; 3:00PM

ATTENTION: It is the responsibility of interested parties to periodically check the Electronic State Business Daily (ESBD) website for updates to this solicitation prior to submitting a response. The Respondent’s failure to periodically check the ESBD will in no way release the selected Contractor from “addenda or additional information” resulting in additional cost to meet the requirements of this solicitation.

Texas Department of AgricultureRFP 5510000133

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PCO 900 RFP Template Version 3 Release 07/10/2023 Release 05/31/2022 Table of Contents

PCO 900 RFP Template Page 2 of 2 Version 3 Release 07/10/2023

SECTION I – INTRODUCTION AND STATEMENT OF WORK

INTRODUCTION

Texas Department of Agriculture (TDA), the Food and Nutrition Department (FND) is seeking experienced warehouse and/or distribution contractors to store and/or deliver United States Department of Agriculture (USDA) Food to Contracted Entities (CE) in Texas which includes school districts and similar entities. FND contracts with and provides nutritional assistance on behalf of the USDA to CEs primarily serving children throughout the state. Respondent will be required to provide TDA with the deliverables as specified in this RFP and as agreed upon under any contract(s) resulting from this solicitation.

RESPONDENTS ARE CAUTIONED TO READ THE INFORMATION CONTAINED IN THIS RFP CAREFULLY AND TO SUBMIT A COMPLETE RESPONSE TO ALL REQUIREMENTS AND QUESTIONS AS DIRECTED.

Background Established by the Texas Legislature in 1907, TDA was created to gather statistics on crops and livestock and to educate farmers on advanced farming methods and practices. Over time, the Department’s responsibilities expanded significantly, including the absorption of the Office of Rural Affairs and the State Office of Rural Health in 2011. Today, TDA performs a wide variety of regulatory, nutrition, economic development, and marketing activities, such as:

· Regulating the growth and transport of agricultural commodities;

· Administering federal and state nutrition assistance programs for children and adults;

· Regulating agriculture-related activities in the marketplace to protect consumers, such as the sale of agricultural commodities and the use of pesticides;

· Providing financial assistance to young farmers, rural healthcare facilities, and community infrastructure projects to promote economic development in rural Texas; and

· Promoting Texas agricultural products locally, nationally, and internationally.

The National School Lunch Program (NSLP) is a federally funded assisted meal program administered by TDA providing lunches to Texas children in schools and Residential Childcare Institutions (RCCI). All schools participating in NSLP are eligible to receive USDA-donated foods. TDA provides storage and distribution services of USDA Foods for participating schools and RCCIs through contract warehousing companies. Contractor(s) will be responsible for receiving food deliveries, storing deliveries in a food-grade warehouse, and/or delivering the food to the end users. TDA’s FND is responsible for contract management, but payment for the storage services and food deliveries will be made by the CEs.

Program Historical Expenditures Information contained within the table shows the total expenditures for the last two (2) years by CE Regions.

Food Distribution Program (FDP) Regions by County - RFP SY 2025

Region Totals (See Attachment 3) (Cases Shipped)

SY 21-22

(Cases Shipped)

SY22-23

Average

Regions Delivery Fee and USDA Foods Value

Legal Authority This RFP is issued pursuant to TDA's authority in Chapter 12 of the Texas Agriculture Code and pursuant to Texas Government Code, Title 10, Subtitle D, Chapter 2156, Subchapter C, Sections 2156.121 – 2156.127. Competitive sealed proposals will be received until the deadline set forth below in this RFP.

Definitions The following words and terms shall have the following meanings unless the context clearly indicates otherwise. These definitions shall apply to this RFP, including the terms and conditions attached to the RFP, and any contract entered into by the parties as a result of this RFP.

1) Amendment means the final written agreement signed and dated by TDA and Respondent(s) selected for an award as a result of this RFP subsequent to the effective date of the Contract, which amends, changes, extends, modifies or revises the Contract.

2) CMBL means the Centralized Master Bidders List, which is a public website comprised of businesses interested in contracting with the state. It can be used by Respondents to identify potential respondents and historically underutilized businesses.

3) Contract means the final written agreement signed and dated by TDA and the respondent(s) selected for an award as a result of this RFP, and includes the RFP and all attachments, the proposal(s) of any respondent(s) selected for an award, any appendices, final offers, amendments to the solicitation, schedules, or special provisions incorporated into the contract. This term also includes a purchase order.

4) Contractor means an entity or individual selected for an award as a result of this RFP and that enters into a Contract to complete the scope of work described in this RFP and the Contract.

5) Contract Manager means a person designated by TDA or Contractor that is responsible for invoicing and payment under the Contract, and for monitoring the overall progress of the scope of work required by the Contract. Either party may designate the same individual to be both the Contract Manager and the Project Manager.

6) Distribution Contractor means an entity or individual selected for an award for distribution services, as a result of this RFP and that enters into a Contract to complete the scope of work described in this RFP and the Contract.

7) Effective Date means the date TDA's Deputy Commissioner or duly authorized designee signs and dates a Contract resulting from this RFP.

8) ESBD or Electronic State Business Daily, means the public website for posting state contracting opportunities managed by the Comptroller of Public Accounts (CPA).

9) Intellectual Property means worldwide legal rights or interests in intangible property evidenced by or embodied in: (1) any idea, design, concept, method, process, technique, apparatus, invention, discovery, or improvement that is capable of being patented; (2) any copyright or patent; (3) any work that is capable of being copyrighted, including moral rights or neighboring rights; (4) any trademark, service mark, certification mark, trade dress, trade name, or other indicia of source or origin; (5) any design, display, graphic design, letter or letter combination, logo, mark, number or number combination, phrase, word or word combination that indicates the origin, quality or source of goods or services and that is capable of being copyrighted; and (6) any rights, interests or property similar in kind or nature to the rights, interests or property created or resulting from this RFP. The intellectual property of a party includes all worldwide intangible legal rights or interests that the party may have acquired by assignment or license with the right to grant sublicenses.

10) Project means the purpose, result or work to be accomplished as a result of the Contract.

11) Project Manager means the person assigned by TDA or Contractor that is responsible for managing the day-to-day work of the Contract.

12) Proposal means a response submitted to TDA as a result of this RFP.

13) Respondent means an entity or individual that submits a proposal.

14) Scope of Work or Statement of Work (SOW) means the deliverables, services and work set out and defined in the Contract and described in Section I, Para. 5 of this RFP.

15) TDA means the Texas Department of Agriculture. TDA may also be referred to as the "Department."

16) USDA Foods means foods procured by USDA and donated to states and recipient agencies for distribution through USDA food assistance programs.

17) Warehouse Contractor means an entity or individual selected for an award for warehouse storage services, as a result of this RFP and that enters into a Contract to complete the scope of work described in this RFP and the Contract.

Scope of Work/Specifications TDA is seeking qualified Respondent(s) to provide warehouse storage and distribution services to transport, receive, store, and deliver food shipments purchased by the USDA Food to CEs across the State of Texas. Respondents can provide either warehouse storage or distribution services and/or both. TDA intends to award multiple contracts through this RFP.

Respondent(s) must be able to accept and process orders from USDA’s food ordering system, the Web Based Supply Chain Management system (WBSCM), and be responsible for all logistic functions including, but not limited to, receiving truckload commodities from vendors in dry, refrigerated and frozen forms, receiving orders for multiple types of stored commodities from recipients for scheduled delivery dates, loading of trucks including pallets, and delivery of multiple types of commodities to recipients in full and less-than-full truckload quantities, with a potential for dry, cooler, and freezer in a single truck. The storage facility proposed must be capable of storing both dry and temperature controlled products for the various nutrition programs. Contractor must be able to track dates product is received into the contractor’s warehouse and best if used by dates on all external containers and report those to USDA electronically. Respondent should have the ability to add additional routes on an as requested basis, including vendor pick up with multi-stop direct deliveries bypassing the warehouse.

Goals and Objectives The goal of this RFP is to contract with contractors who provide the following services:

1. Warehouse storage services; and

2. Distribution services.

Deliverables Warehouse storage services

1. Receiving food shipments

a. Inbound shipment loads – Contractor(s) will receive inbound shipments directly from USDA, commercial processors, and carriers of fresh produce. A shipment of the product may be a full or partial truckload.

i. USDA Foods – Inbound shipments of USDA Foods contain one food item per load (approximately 700-2000 cases).

ii. Processed foods – Inbound shipments of processed foods are delivered by food manufacturers and contain one or more food items per load. Shipments are not derived from USDA and are not bound by general standards and procedures when receiving shipments of USDA Foods as shown in the FNS Instruction number 709-5 Rev. 3 located at the following link: https://fns-prod.azureedge.us/sites/default/files/resource-files/fns-709-5-rev-3.pdf.

iii. USDA Foods fresh produce – Inbound shipments of fresh produce will contain one product. Contractor(s) must monitor USDA Foods fresh produce closely to ensure quality is not compromised. Contractor(s) must inspect the produce upon receipt from the USDA vendor and before delivering to a CE to ensure it has not been damaged or spoiled during the delivery and storage process. Contractor(s) must review CE delivery orders to ensure the USDA Foods fresh produce is requested for receiving on their next scheduled delivery for optimal quality. Shipments derived from USDA are bound by policies within the FNS Instruction number 709-5 Rev 3.

b. USDA Foods fresh produce deliveries – Fresh fruit and/or vegetable shipments directly delivered to a warehouse by a USDA vendor, except for apples, cannot be unloaded without an inspection conducted by a USDA representative. USDA representatives will fail any shipment that does not meet USDA specifications as defined in FNS Instruction number 709-5 Rev 3, Section IX, Inspecting the Shipment, part G, Out-of-condition USDA Foods and required notification. The warehouse must immediately notify TDA of failed inspections.

c. Out of condition USDA Foods delivery – Contractor(s) must inspect shipments of USDA Foods before unloading. If upon inspection, Contractor(s) observe that a portion of the USDA Foods is in an out-of-condition state (this includes but is not limited to, no longer fit for human consumption because of contamination, damage, or infestation) they must immediately inform TDA and provide pictures of the out-of-condition product. Contractor(s) may request reimbursement of costs associated with unloading out-of-condition USDA Food shipments. Neither Contractor(s) not USDA vendor/carrier can assess or levy lumper fees for cargo that shifts during transit.

d. Shipment Protection

i. Seals – Contractor(s) must record the serial numbers of truck door seals and their condition. Consignees shall record inbound, and if applicable, outbound seal numbers. Contractor(s) must run a preliminary check of the trailer and product (temperature readings, visible check on pallet and product appearance) but refuse unloading of the shipment and immediately report the results to TDA if seals are either broken, missing, or do not match the number on supporting documentation such as the Bill of Lading (BOL). TDA will then report to USDA for further guidance and/or approval for rejection. Only USDA has the authority to reject USDA Foods shipments. (Note: for split shipments, the driver is issued multiple seals and has an appropriate seal for each stop). This does not apply to Processed End product shipments. Processed end products are defined as raw agriculture commodities undergone any changes to its natural state, I.e., washing, cleaning, milling, cutting, chopping, heating, pasteurizing, blanching, cooking, canning, freezing, drying, and dehydrating.

ii. Cabin temperature – The consignee must maintain documentation of the temperature of a freezer or refrigerated truck or trailer upon arrival. Cabin temperature must always be taken and provided to TDA when request for refusal is considered and submitted.

iii. Condition of pallets and product – Prior to unloading, Contractor(s) must run a preliminary check on the condition of pallets and product to determine if either appears to create an unsafe and/or unsanitary environment to unload. Trailers in suspect condition must be reported to TDA for further guidance.

e. Pickup appointments – Contractor(s) must have a process in place for CEs to submit a CE delivery order or CE pickup order and establish a timeframe the order is to be submitted by the CE prior to the delivery date. Contractor(s) must inform TDA of the process to be used and the timeframe established within the response to this RFP. Contractor(s) must immediately inform TDA whenever process or timeframe changes.

i. Notification of changes to pick-up appointments – Contractor(s) must provide advance written communication to the CE in the event the pickup appointment will not be honored for the scheduled pickup date and time. Within the communication, Contractor(s) must request a new date and time to which the CE must agree to. If a CE fails to provide advance notice to Contractor(s) that no one will be available to receive a regularly scheduled pickup, or that the CE will refuse any part or all the items on the delivery order, (and the Distribution Contractor(s) attempts to make the delivery) the Distribution Contractor(s) may charge the CE the appropriate contracted rate for the delivery not accepted by the CE. TDA must be notified of these changes and these must be tracked separately from normal invoice charges submitted to TDA quarterly.

f. Exchange in possession of USDA Foods items - Pickup areas – when CEs pick up USDA Foods, Contractor(s) must bring the foods across the receiving platform on exchangeable and returnable pallets. Contractor(s) are responsible for loading the food into the CEs truck.

g. Pickup fees - Contractor(s) must invoice CEs for the pick-up of USDA Foods, according to the number of cases or units, at rates not exceeding contracted rates. The pick-up fees will also include the per case handling cost proposed in Exhibit C Rate Price Proposal Schedule.

i. Non-service sites - In some cases, there may be a CE that has a site (non-service site) that is outside their assigned Contractor’s service region. In this case, TDA may approve the non-service site to pick up USDA Foods from Contractor(s) that do not typically service the non-service site.

ii. Termination of a contract

1. In the event of termination, or at the end of a Contract, TDA will require CEs to take possession of inventory that has been allocated to them before a date specified by TDA.

2. If a CE requests to transfer their allocated inventory to the new Contractor’s designated warehouse, the expiring Warehouse Contractor(s) and CE negotiate the pick-up fees.

3. The expiring Warehouse Contractor(s) may not charge a pickup fee for transferring available inventory (not yet allocated to CEs) to the new Warehouse Contractor(s).

h. Forced deliveries (items stored in the cooler)- Dairy, fresh produce, and other sensitive shelf-life items stored in the cooler must be distributed no later than 60 days from the date of receipt. Distribution Contractor(s), in coordination with Warehouse Contractor(s), must attempt to deliver allocated cooler items to the CE upon the next available delivery date. Warehouse Contractor(s) are responsible for adding cooler items to delivery orders left off by the CE. CEs that refuse any cooler items upon delivery will still be charged for the delivery fee.

2. Warehousing

a. Facility requirements

i. Capacity – The Contractor must have sufficient storage space to always handle all inbound shipments including abnormal peak loads, at no additional cost to TDA or CEs. The number of cases expected to be on hand at any given time varies depending on the flow of inbound and outbound shipments.

ii. Inspection - At their sole discretion, TDA, USDA, their agents, or representatives, will inspect Contractor's facilities and/or subcontractor's facilities. Inspections may be scheduled or unannounced. Contractor(s) must cooperate with all inspections, including an annual inventory review. Inspections are to help ensure that Contractor(s) are complying with all terms and conditions of this RFP and USDA requirements are met, including but not limited to sanitation, security, and temperature. Contractor(s) must comply with State, Federal and local health requirements.

b. Insurance coverage for USDA Foods (see Exhibit L, Insurance Requirements)

i. Within thirty (30) days of notification of the contract award, Contractor(s) will submit to TDA, proof of insurance. The insurance must be of an amount no less than the applicable amount listed in Table 1 below, which sets the insurance amount by contracted region according to the volume of product stored in the regional warehouse from the prior year.

Table 1 – Value of USDA Foods to Insure

ii. The insurance must be renewed annually, thirty (30) calendar days prior to the Contract renewal effective date. TDA will determine the required insurance amount at renewal based on a region’s average volume during the contract year. TDA will calculate each region’s average volume.

iii. The insurance coverage is to protect the value of the USDA Foods stored at the Contractor’s facility per 7 CFR 250.12(f)(5).

c. Facility location

i. Warehouse relocation - Changes to a Contractor’s address or warehouse location must be submitted by email to the designated TDA Contract Manager no later than 60 days in advance of implementation. Contractor(s) submitting changes less than 60 days may be imposed a destination fee by TDA, USDA, or USDA vendor.

ii. Sub-contract warehouse – Contractor(s) must obtain written approval from TDA before storing USDA Foods at any facility other than the Contractor's warehouse. The approval process to subcontract the storage of USDA Foods may include a site visit by TDA. Contractor(s) is responsible for any USDA Foods loss by subcontractors and for pursuing recovery of funds or product from the subcontractor. If the subcontracted facility is the destination for inbound USDA Foods, changes to the address or location of a subcontractor must be submitted to TDA 60 days in advance of implementing the change. Contractor(s) submitting changes less than 60 days may be imposed a destination fee by TDA, USDA, or USDA vendor.

iii. Contractor(s) is required to ensure that subcontractors adhere to the RFP terms and conditions, including FNS Instruction number 709-5 Rev 3. Contractor(s) must also ensure subcontractors cooperate with USDA and TDA's inspectors, reviewers and auditors, or their authorized agents and representatives.

iv. Contractor(s) is held responsible for all losses under the Contract.

d. Temporary facilities - Should a temporary facility be needed before receiving written approval from TDA, Contractor(s) must immediately acquire verbal approval from the designated TDA Contract Manager, and provide the name and location of the facility, term of temporary use, and assure TDA the facility is adequate to handle foods as set forth by the approved Contract with Contractor(s). The verbal approval will be followed by an email from the designated TDA Contract Manager confirming the temporary approval basis. Any and all losses, thefts, or damage of USDA Foods occurring at a temporary facility is the responsibility of Contractor(s).

e. Storage fees - Storage fees encourage the movement and distribution of USDA Foods in a timely manner to prevent products going out-of-condition. Storage fees may begin to accrue only after the USDA Foods shipment has been received and the CE has been allocated quantities from the shipment. Contractor(s) shall indicate the storage fees and timeframes for free and private storage on Exhibit C, Rate Price Proposal Schedule.

i. Free storage – Contractor(s) must establish a defined timeframe for free storage for CEs no less than 30 days from the date of allocation of the USDA Foods shipment.

ii. Private storage – Contractor(s) may charge CEs a storage rate not to exceed the contracted private storage rates (per case, per month), by storage type. Storage rates cannot be applied until 30 days from date Contractor(s) have received shipment of the item to be charged. Contractor(s) may charge CEs an elevated fee the longer items are stored.

iii. Surplus Inventory - To fulfill USDA truckload order requirements, TDA may order additional volume of USDA Foods beyond CE demand. CEs can acquire surplus inventory upon request, to which, it is then allocated. Contractors cannot charge TDA private storage fees while it is considered surplus inventory.

iv. TDA requires Contractor(s) to provide TDA with an annual summary of delivery and private storage fees paid to them by schools, no later than July 30th of each contract year.

v. Contractor(s) must have a system for generating invoices for private storage and delivery fees. TDA requires Contractor(s) to submit quarterly reports (July-September, October-December, January-March, April-June) of fees invoiced to CEs. The report should indicate what invoices have been paid by CEs. In the RFP response, Respondents must identify what system will be used to generate invoices.

f. Sanitation

i. Pest control – Contractor(s) must conduct pest and rodent control, at least monthly, and retain records to verify compliance. Employees must be trained to detect signs of infestation by insects and rodents, to correct such problems, and to prevent infestation problems from spreading.

ii. Chemical storage – Contractor(s) must ensure that USDA Foods are stored away from chemicals or other potentially harmful products and otherwise ensure that USDA products and/or packaging are protected from contamination and from absorbing odors through the packaging.

iii. Cleaning – Contractor(s) must maintain and keep clean all warehouse facilities, trucks, and other spaces used for storing or transporting USDA Foods.

g. Storage temperature requirements - TDA requires Contractor(s) to maintain logs and record temperatures in each storage area for USDA Foods at a minimum every other day. If closed on Saturday and Sunday, Contractor(s) must record temperatures on Friday and Monday.

i. Frozen items must be stored at 0°F or below.

ii. Chilled items must be stored in refrigerated space at a temperature between 35°F and 45°F.

iii. Dry storage for canned items and other USDA Foods must be stored at a temperature between 50°F and 70°F. The dry storage area must be well ventilated with forced air.

h. Dry, special care - To prevent infestation and deterioration in quality, Contractor(s) must give special care to some packaged, bagged, or canned dry storage USDA Foods. Contractor(s) must store grain products (e.g. flour, non-fat dry milk, pasta, rice) in chilled storage. Chilled storage rates will apply. Dry items stored in the cooler must not be returned to dry storage at any time and must be delivered with chilled items to CEs (or stacked on same pallet as chilled items for CE pickup).

i. Contractor(s) must refrigerate these products at 35-45°F or less, with relative humidity not greater than 60 percent (%).

ii. Other dry storage USDA Foods requiring special care must be carefully stacked and stored to prevent crushing or deterioration.

3. Inventory management

a. Stock rotation – Contractor(s) must typically rotate stock on a First In, First Out (FIFO) basis by date of receipt, but dates found on the package (expiration, best-if-used-by, or use-by) must be considered in the overall management of inventory rotation. In this case, First In, First Expiring (FIFE) must be applied when succeeding shipments have dates that may impact FIFO. TDA may require Contractor(s) to bypass FIFO if a CEs decision to delay timely receipt of their USDA Foods allocations, including processed end products, causes another CE to receive product older than the product that was allocated to them.

b. Comingling prohibited – Contractor(s) must store USDA Foods, including processed end products in lot numbers, separate from the Contractor’s commercial foods.

c. Short shelf-life items - For short shelf-life items, which includes but is not limited to, cooler items, Contractor(s) shall be responsible for adding to the CE Delivery Order if the CE did not request according to delivery requirements. Contractor(s) must notify the CE before the delivery date by phone or email that the order was modified to include the fresh produce.

d. Inventory damages – Contractor(s) must report to the designated TDA Contract Manager, within 24 hours, on TDA’s Form H1638 "Report of Loss of USDA Foods" (Attachment 6), any damage to USDA Foods, including damage occurring in the warehouse or during transporting and delivery of the USDA Foods to the CEs. The USDA Sales Order Number must be reported within the JotForm submission and include pictures and any supporting documentation such as condemnation report from a qualified health inspector when completing the JotForm.

Form H1638-Report of Loss of USDA Foods The Report of Loss of USDA Foods (Form H1638) is an electronic form used to report a loss of USDA Foods in the National School Lunch Program (NSLP) and other USDA Foods programs, as applicable. The H1638 Jot Form must be completed within 24 hours of identifying the USDA foods loss.

Link for H1638 JOT FORM https://form.jotform.com/92187665293166

e. Inventory controls – Contractor(s) are required to establish the following inventory control points:

i. Warehouse Pick List

ii. Bill of Lading (in three parts)

1. Warehouse Copy: Contains the items from the Warehouse Pick List and is kept on file at the warehouse.

2. Carrier Copy: Driver and CE signature and Driver returns copy to Warehouse.

3. CE Copy: Driver and CE signature and CE retains a copy.

Note: Electronic bills of lading must capture signatures, with the date and time of signature, from the driver and CE and the CE must be provided with a copy.

f. Physical inventory counts

i. Mid-year count

1. TDA requires Contractor(s) to conduct a mid-year physical inventory count no later than December 31st. No later than November 15, Contractor(s) must submit to TDA the dates the physical count is to be conducted.

2. No later than two (2) business days from the last day of the physical count, Contractor(s) will submit results of the mid-year count to TDA via email to CommodityOperations@TexasAgriculture.gov. The results must consist of Contractor’s system perpetual inventory balance and physical count per USDA material item based on case unit measurement.

3. No later than five (5) business days from the last day of the physical count, Contractor(s) will be required to make all positive and negative inventory adjustments to their inventory management system to match the physical count results.

4. No later than two (2) business days from the last day of the system adjustments, Contractor(s) are required to submit a report to TDA that includes the following data elements:

a. System adjustments of inventory per USDA material item (showing gains and losses).

b. Adjustments made to State inventory and CE allocated inventory accounts that equate to the system inventory adjustments.

c. No later than thirty (30) calendar days after the last day of the physical inventory count, TDA will provide Contractor(s) with a reconciliation letter, including the financial results of the Mid-Year Physical Inventory count.

5. TDA will, at its sole discretion, determine the reasonableness of gains and losses and may require Contractor(s) to submit a written plan to address and correct identified inventory control deficiencies.

6. Cycle inventory counts - In addition to mid and annual inventory counts, Contractor(s) shall conduct a first quarter (July – September) and a third quarter (January – March) cycle inventory count. Cycle counts are not considered a full inventory count, but rather a count of select or high-value items in Contractor’s inventory. Contractor(s) shall determine the items to count, retain cycle count information and provide to TDA on October 15th and April 15th. Losses reported must be submitted on the H1638 JotForm. For gains, Contractor(s) must show the system adjustment record made.

ii. Annual inventory review - Each year, TDA or TDA's agents, along with the designee(s) of Contractor(s), will physically conduct an inventory of all USDA Foods, including foods stored at subcontracting facilities. This review usually takes place annually in May or June before June 30th. During the period designated by TDA for the Annual Inventory Review, Contractor(s) must not conduct any outbound shipments of USDA Foods or process any pending CE delivery orders. As feasible as possible, Contractor(s) should avoid scheduling inbound shipments of USDA Foods. However, inbound shipments must be accepted if the USDA vendor cannot accept a delivery appointment outside the designated period and/or the shipment arrives from a USDA vendor without an appointment.

1. At the request of TDA, Contractor(s) shall provide equipment to allow TDA and/or TDA's agents to simultaneously count USDA Food stored in a freezer, chilled, and dry storage areas. Contractor(s) shall provide equipment (lifts) with safety cages and safety belts to hold at least three people if required. Contractor(s) will furnish freezer outerwear (freezer coats as may be necessary).

2. During the annual inventory review, TDA and/or TDA's agents will compare the physical count to a current inventory generated from Contractor’s inventory system. The dollar amount of gains (overages) and losses (shortages) of USDA Food products are calculated using USDA's current list of food prices.

g. Annual physical inventory: final count - On the day of and when the Annual Physical Inventory Review is complete, TDA (or TDA's agents) and Contractor(s) must agree to the number of cases, packages, or containers of each USDA product counted, including the number at subcontracting facilities, and each must sign the inventory count sheets to affirm agreement with the results. If a discrepancy is determined and no agreement is met, Contractor(s) and TDA must conduct a recount of the product(s) in question. If a continuation of a non-resolution occurs, TDA will make the final determination and approval.

h. Annual physical inventory reconciliation - No later than thirty (30) calendar days after the physical inventory count, TDA will provide Contractor(s) with a reconciliation letter, including the results of the Annual Physical Inventory count. No later than thirty (30) calendar days after receipt of TDA’s reconciliation letter, Contractor(s) will provide its response to TDA’s findings.

i. Annual physical inventory: losses

i. Shortages of available inventory – Contractor(s) must pay TDA for the value of the unallocated inventory of USDA Foods lost (shortages).

ii. Shortages of allocated inventory – Allocated USDA Foods remains as overall TDA inventory but the CE is responsible for utilization throughout the school year. Contractor(s) must reconcile losses by negotiating with the CEs directly. At the CEs option, Contractor(s) must either replace the lost product with a product of equal value and equal (or greater) quality or pay the CE the value in cash. When allocated inventory is transferred from one CE to another, the inventory maintains its original allocation date. The CE that accepts the transferred inventory must take possession of inventory on the next scheduled delivery.

iii. Shortages processed inventory – Contractor(s) must pay the CE a cash payment that compensates the CE for the value of processed foods lost. TDA, at its sole discretion, will provide Contractor(s) with the processed food loss value.

j. Physical inventory gains (overages) - TDA reserves the sole right to make the determination, and not subject to Contractor(s) dispute or discussion, to allow Contractor(s) to offset shortages with gains, thus reducing the total loss recorded from the Annual and Mid-Year inventory counts TDA will determine reasonableness for the quantity of gains or losses identified during the inventory count and decide if offsetting is appropriate. TDA reserves the right to forgo offsetting gains with losses if deemed unreasonable. TDA retains the sole discretion to determine what may or may not constitute an unreasonable quantity of gain or loss, and will consider factors including, but not limited to:

· The annual volume handled by Contractor(s).

· Contractor’s previous history of performance, including any gains and losses from previous years.

· Industry standards regarding gains and losses.

· The gain and loss rates of other TDA contractors.

i. If TDA allows Contractor(s) to offset gains with losses, the following applies:

1. Contractor(s) and/or TDA must investigate any shortages identified during the physical count to determine the cause of the shortage(s). The results of the investigation must be supported by appropriate documentation. TDA, at its sole discretion, will review for approval, and acceptance of the investigation.

2. Any losses resulting from fraud, theft, or negligence, as determined by TDA, cannot be offset with a gain.

3. Unless required by TDA, USDA Foods included in the offset are not required to be of a like or similar kind.

4. Bonus and entitlement USDA Foods may be used for offsets.

5. Offsets are made based on value, not weight.

6. TDA must approve proposed offsets and may adjust proposed offsets if doing so is in the best interest of the program. (Note: Contractors choosing to offset shortages with gains must provide TDA with a list of proposed offsets within 30 days of completion of the physical inventory count.) TDA will approve or disapprove proposed offsets based on available information, the terms of this RFP, and the following factors:

a. The value of the proposed offsets.

b. The volume of USDA Foods involved in the proposed offsets.

c. The desirability of the USDA Foods identified as overages and whether the foods can be distributed efficiently and without waste.

d. Contractor's previous history of offsets; and

e. The results of an investigation by Contractor(s) and TDA as to the cause or causes for the discrepancies.

In addition, TDA expects Contractor(s) to establish Control Procedures to minimize Physical Inventory Gains (Overages). TDA may require Contractor(s) to submit a written Corrective Action Plan to demonstrate the changes that will be implemented to fully correct all necessary procedures to reduce gains or losses.

4. Warehouse Contractor(s) inventory and invoice management system

a. TDA requires Warehouse Contractor(s) to utilize their own TDA approved inventory management software (maintained by Warehouse Contractor(s) and TDA) to track and report the receipt, expiration dates/best-if-used-by (BIUB) dates, storage, and distribution of USDA Foods. Invoicing is the responsibility of the Warehouse Contractor(s) and will be completed and maintained by Warehouse Contractor(s) using their invoicing system. The submission of Contractor(s) inventory reports will be used as the official record of inventory and delivery of USDA Foods.

b. Warehouse Contractor(s) inventory management system must have Microsoft Excel compatibility. The inventory management system must have the functionality to track the receipt, expiration dates/BIUB dates, storage, distribution of USDA Foods, inventory lot reports, warehouse on hand inventory reports, private storage reports, and invoicing functions.

c. Minimum data elements and milestones – Warehouse Contractor(s)’ inventory management system and/or other tracking processes must document the following data elements, which include but are not limited to:

i. Receipt of USDA Foods shipments

1. USDA sales order number and sales order item number (for foods originating from USDA vendors)

2. Processed end product shipment order number (derived from processor/manufacturer)

3. USDA Foods/processor end product material description and pack size

4. Date of physical receipt

5. Total quantity (in cases) accepted and received into inventory

6. Bin storage locations/lot number

7. Pack dates

8. If applicable: Use-by, BIUB, or expiration dates on casing and/or unit packaging

ii. Inventory tracking

1. Material code/description, pack size, quantity, and date of allocation of USDA Foods to CEs

2. Inventory adjustments, adjustment reasoning, and date of adjustment (at material and CE level)

3. Free and private storage

iii. Delivery orders

1. Generated delivery order number

2. Date of delivery

3. CE, material code/description, quantity shipped, quantity accepted by CE

iv. Invoicing

1. Associated generated delivery order number(s)

2. CE, material code/description, quantity, storage charge (if applicable)

d. The inventory management system must have a username and password login for all involved in the daily operations of USDA Foods.

e. Warehouse Contractor(s) must submit reports to TDA when requested.

5. Web Based Supply Management System (WBSCM)

a. TDA requires Warehouse Contractor(s) to use WBSCM (web-based software implemented and maintained by USDA) to check CE allocations and electronically report the receipt of USDA Foods. WBSCM determines CE allocations per material item per truckload sales order.

i. CE allocations - Each USDA Foods truckload sales order will comprise of CE requests, or requisitions, that indicate what the CE demanded and when they planned to have it delivered to the warehouse. WBSCM will be used as the resource for allocations that Contractor(s) must then apply to their inventory management system.

ii. State Allocations (Surplus) – A truckload sales order may have a quantity consisting of requisitions tied to the TDA, or state allocation. Surplus is available inventory, usually on a first come, first serve basis, that CEs can attain. Contractor(s) must develop a process to transfer state allocations to CE allocations when CEs claim surplus.

iii. Contractor(s) must enter goods receipt into WBSCM within 24 hours of physical receipt of shipment. If a shipment is received on a Friday and the warehouse is closed on Saturday and/or Sunday, then the shipment must be receipted by Monday or the next business day, whichever comes first.

b. WBSCM is a website portal that can be accessed through the Warehouse Contractor’s computer with internet connectivity. It is recommended to utilize a high-speed internet service for optimal performance.

c. WBSCM includes, but is not necessarily limited to, functionality to track the receipt, allocation of USDA Foods and generate reports.

d. WBSCM access is controlled by login IDs and passwords, which serve to authenticate the accuracy of data entered.

e. WBSCM helpdesk staff supports WBSCM but does not support hardware or software for Contractor(s) other than the WBSCM website.

f. TDA will provide initial WBSCM training virtually to Warehouse Contractor(s), at a time and place to be determined by TDA. Warehouse Contractor(s) are responsible for travel and accommodation costs necessary for WBSCM training. Contractor(s) assumes training responsibilities after the initial TDA training period for any new Contractor staff working with WBSCM.

g. In addition to maintaining accurate data in WBSCM, Contractor(s) must reconcile WBSCM allocation data with its internal inventory system to ensure both systems have accurate information.

Distribution services

1. Distribution Contractor(s) will provide distribution services and must obtain contact information to designated CEs in the form of an email and phone number. A fax number can also be included if the Distribution Contractor(s) use a fax machine in the normal course of business.

2. CEs may pick-up USDA Foods at the Contractor's Warehouse storage facility or request delivery by the Distribution Contractor(s). Warehouse Contractor(s) must provide delivery requests from the CEs to the Delivery Contractor(s) and are responsible for loading and unloading the food on the truck. Delivery Contractor(s) will be responsible for invoicing the CE for each case delivered.

3. Distribution Contractor(s) must coordinate deliveries with CEs and deliver those cases and/or units of USDA Foods as requested by a CE. Distribution Contractor(s) will coordinate with Warehouse Contractor(s) by, but not limited to the following criteria:

a. Distribution Contractor(s) must have logistics software approved by TDA.

b. Distribution Contractor(s) must provide Warehouse Contractor(s) with contact information, logistics information, and any pertinent information for the seamless execution of daily operations/deliveries. Both parties will agree to operate harmoniously.

c. Distribution Contractor(s) must obtain 3 copies of the BOL that include all the items ordered per delivery stop and/or any shortages/substitutions.

i. Distribution and Warehouse Copy: Contains the items from the Warehouse Pick List and is signed off by both the Warehouse and Distribution contractors as the handoff of inventory. The Warehouse Contractor will keep on file.

ii. Distribution Contractor Copy: Driver and CE sign. Driver returns copy to Distribution company to keep on file.

iii. CE Copy: Driver and CE sign and CE retains a copy.

d. Once Warehouse Contractor(s) have loaded all inventory into the delivery vehicle, Distribution Contractor(s) will be responsible for any unforeseen losses caused during transit. Distribution Contractor(s) will then need to report the loss within 24 hours of occurrence through the (Attachment 6) H1638 Form.

i. The driver must notate on CE’s BOL the loss that occurred upon delivery of order. Reconciliation of losses will require TDA assistance.

ii. Distribution Contractor(s) will not store any USDA Foods at their distribution facility. Their sole purpose is meant for transporting/distributing USDA Foods.

4. Delivery Schedule

a. No later than June 1 of each year, and before the distribution of USDA Foods, Distribution Contractor(s) must survey CEs and develop a delivery schedule agreement with each and provide TDA with a copy of the delivery schedule. The delivery schedule is effective throughout the year, including holidays and summer months, unless otherwise requested by the CE.

b. Distribution Contractor(s) must obtain from CEs a list of delivery sites, including the addresses and direction to the sites.

c. Delivery schedules must specify a day during the week, Monday through Friday and deliveries must occur between 6:30am and 2:30pm. Through an agreement between the CE, Warehouse Contractor(s), and Distribution Contractor(s), the delivery time can be before 6:30am and after 2:30pm. Furthermore, TDA allows key drops upon the agreement of the CE, Warehouse Contractor(s), and Distribution Contractor(s). however, Distribution Contractor(s) will have final responsibility for the delivery schedule. Distribution Contractor(s) will work with each CE’s work schedule and case count to optimize the deliveries across the region. Distribution Contractor(s) shall notify TDA of how they intend to setup their delivery schedule.

d. Changes to delivery schedule - Distribution Contractor(s) may negotiate with a CE any changes to the CE’s delivery schedule, and after obtaining the CE’s agreement, notify the CE and Warehouse Contractor(s) of the changes at least 30 days in advance of implementation. Upon mutual agreement, Distribution Contractor(s) may immediately implement changes to a CE’s delivery schedule. Distribution Contractor(s) must provide Warehouse Contractor(s) and TDA with a copy of the amended delivery schedule within five (5) calendar days of execution.

5. Fleet maintenance – Distribution Contractor(s) shall maintain a fleet of trucks and trailers to comply with deliverables described in this RFP. Distribution Contractor(s) proposal shall include the capabilities of their transportation fleet that includes the year, make, and model, the number of owned and or leased trucks and trailers, and maintenance agreements with third parties and/or in-house maintenance capabilities. See Exhibit C2, Structure Delivery and Storage Plan for template form.

6. Delivery appointments

a. Delivery - Distribution Contractor(s) must have a process in place for CEs to submit a CE delivery order and establish a timeframe the order is to be submitted by the CE prior to the delivery date. Distribution Contractor(s) must inform TDA of the process to be used and the timeframe established within the response to this RFP. Contractor(s) must immediately inform TDA whenever process or timeframes change.

b. Notification of changes to delivery appointments – Distribution Contractor(s) must provide advance written communication to the CE in the event a delivery appointment will not be honored for the scheduled delivery date and time. Within the communication, Contractor(s) must request a new date and time to which the CE must agree to. If a CE fails to provide advance notice to Distribution Contractor(s) that no one will be available to receive a regularly scheduled delivery, or that the CE will refuse any part or all the items on the delivery order, (and Distribution Contractor(s) attempts to make the delivery) Distribution Contractor(s) may charge the CE the appropriate contracted rate for the delivery not accepted by the CE. TDA must be notified of these charges and these must be tracked separate from normal invoice charges submitted to TDA quarterly.

7. Delivery vehicle, product, and driver conditions

a. Delivery vehicle conditions - Distribution Contractor(s) must transport dry, frozen, and chilled USDA Foods, using temperature- controlled, refrigerated delivery vehicles (frozen foods at 0-10°F and chilled foods at 35-45°F at the time of…