Questions and Answers-B-47390~2.docx

1. Question: IFB, Opening section, pg 1 – Please confirm that a manufacturer does not need to include the individual documents, Standard Terms and Conditions and Standard Illinois Certifications, in their bid proposal.

Answer: Correct, Standard Terms and Standard Illinois Certifications are not required.

2. Question: IFB, Section A.1, pg 1 – Please provide a checklist of all required documents for bid submission or confirm what would be required in addition to the list below.

a. Vendor Disclosure or IPG Active Registered Vendor Disclosure

b. Offer to the State of Illinois

c. Contract

d. Attachment D – Bid Sheet Template

e. Current nationally published price list Answer: Vendor Disclosure or IPG Active Registered Vendor Disclosure, Contract, Offer and Attachment D are required to be submitted with bid.

3. Question: IFB, Section A.1, pg 2

a. For electronic submissions, this section mentions file size may impact uploading. Can the State provide what the file size limitations are for uploading?

b. Instructions indicate to fill in the Items Tab for the pricing. There are several fields within the Item section that would not be relevant for this bid. Should those sections be left blank or populated with N/A?

c. What fields within the Item section are required for completion?

d. Since there is a bid sheet template document, instead of completing the item # sections, can the bid sheet just be uploaded in one of the item sections and check the box “See Quote Attachment(s)”?

e. What fields are required for completion on the General tab within the electronic bid submission process?

Answer: a) File Size limitation is unknown

b) You can enter or select the “No Charge” box in the items tab since award will be made on lowest monthly net wholesale truckload cost per unit of infant formula, or the highest monthly rebate calculated on Attachment D.

c) See answer above in b).

d) See answer above in b).

e) Items on the General Tab that need to be completed is Vendor Name providing quote and bid submission date/time.

4. Question: IFB, Section A.2, page 3

a. Please provide the address and room location for the bid opening.

b. Federal Regulation, 7 CFR §246.16a, "Infant formula and authorized foods cost containment," section (c)(ii) requires that the State Agency "Publicly open and read all bids aloud on the day the bids are due." Please advise how the State will comply with Federal Regulations and "publicly open" electronic bid submissions.

c. Please identify everyone who has access to bids once they have been submitted on-line, prior to the official bid submission deadline.

d. Please explain the steps taken to restrict access to bids to those persons identified in response to the question above.

e. May a bidder submit an alternate hard copy of their bid in case they have trouble submitting a bid online?

f. Please confirm that manufacturer name, product name, unit size, reconstituted ounces per unit, lowest wholesale full truckload price per unit, rebate bid per unit, net price per unit, percent rebate, total cost, and total monthly price will be read aloud for each respective bidder during the public opening.

g. Please provide a call-in number where bidders can call in to listen to the public bid opening.

i. If only allowing attendance via call-in, please provide this option with video so attendees can witness the public opening.

ii. Please provide a contact number in the event there is any issue with audio/video during the call.

Answer: a) Public viewing of the bids can be viewed via Webex by clicking the following link.

https://illinois.webex.com/illinois/j.php?MTID=m6bb32ebea80f16395921b3c57ed401f1

b) See link above.

c) BidBuy is a secure online E-Procurement system. No one has access to any bids submitted until the bid opening date/time and the “Open Bid” button is pressed.

d) Please see answer above.

e) Hard copies are not accepted.

f) During the Bid Opening, all submitted Attachment D’s will be shared during the Webex so all attending can see.

g) Please see Webex link above. If any issues arise, please contact John Baumgartner at john.baumgartner@illinois.gov.

5. Question: IFB, Section A.5, pg 3 - Please confirm that bidders may communicate with the WIC state agency staff regarding any issues that do not pertain to the IFB ie: direct shipment communication, updates for exempt formula, et al.

Answer: Please only communicate with the Information Contact listed above.

6. Question: IFB, Section A.6, pg 3

a. Please confirm if any amendments issued will be required to be signed and/or included as part of an offeror’s proposal.

b. We appreciate the State’s willingness to respond to the bidders’ written questions and inquiries. Timing between answers and bid submission is important and necessary to allow bidders enough time to prepare a bid proposal that is responsive and reflective of the responses provided by the State.

i. Because of the amount of analysis and approvals required for a contract of this size, please confirm the State will allow 10 business days between the day responses to questions are published and the bid due/opening date.

ii. If answers are not provided 10 business days prior to the scheduled bid due date, please revise the bid due date to be 10 business days after answers are posted.

Answer: a) This section pertains to questions and answers and bid amendments posting all answers in BidBuy. This will not require a signature.

b) Extending the Bid Opening will be an option if Answers are not posted with adequate time to provide an accurate quote.

7. Question: IFB, Section C.2, pg 7

a. Is a separate statement required to declare product is manufactured in the United States or is a signature on the Vendor Disclosure form sufficient?

i. If a separate statement is required, please indicate if this is just a separate attachment to be uploaded or if it can be put in the comments section on the General tab.

ii. Because this is an infant formula rebate contract and federal law requires that it be awarded to the vendor offering the lowest net cost to the State, please confirm that, in accordance with governing Federal law, this bid will be awarded based solely on the lowest net cost to the State as defined in the Federal WIC regulations and that no preferences will be applicable.

Answer: a) The Domestic Preference can be made on the IFB Offer document. Award will be based solely on lowest monthly net wholesale truckload cost per unit of infant formula, or the highest monthly rebate calculated on Attachment D.

8. Question: IFB, Section C.4, pg 8 - Because this is a rebate contract and no payments will be made by the State, please confirm the payment of this fee will not be required. If not confirmed, please explain how the fee should be paid.

Answer: This is Not-Applicable.

9. Question: IFB, Section C.8, pg 9

a. When does the State anticipate publishing an award?

b. Please confirm all bidders will be notified of the award via email.

Answer: a) The State will publish an award once all bids have been reviewed and the responsive bidder with the lowest monthly net wholesale truckload cost per unit of infant formula, or the highest monthly rebate calculated on Attachment D has been identified.

b) Award will be made via BidBuy. All vendors associated with the NIGP codes listed should receive a BidBuy notification once an award is made.

10. Question: IFB, Section C.10, pg 10 - In the event of a protest, please confirm that all bidders will be made aware via email.

Answer: Please contact the protest review office contact in section C.10 to inquire if any protests were filed.

11. Question: Contract, Section 1.1, pg 2

a. The citation referenced in the fourth bullet is incorrect. Please correct the citation to 7CFR 246.10(e)(12).

b. Please confirm a manufacturer is not billed for rebates for infant formula issued to children.

Answer:

a. Citation and hyperlink have been updated

b. The manufacturer is not normally billed for rebates for infant formula issued to children, except in cases where 7 CFR 246.10(e)(3)(i) (aka Food Package III - Participants with qualifying conditions) applies which “. . .is reserved for issuance to women, infants, and children who have a documented qualifying condition that requires the use of a WIC formula (infant formula, exempt infant formula, or WIC-eligible nutritional) because the use of conventional foods is precluded, restricted, or inadequate to address their special nutritional needs. Medical documentation must meet the requirements described in paragraph (d) of this section.”

12. Question: Contract, Section 1.2.1, pg 4 – The number of total averaged infants is referenced as 44,133. If you add up the exclusively breastfed, the infants fed contract brand and the infants issued exempt provided in this section, it only totals 39,838. What would the remaining infants be classified as?

Answer: The 44,133 is the average number of infants served by the Illinois WIC Program as reported in the final 798 report filed with USDA for FFY 2024. The average of 4,750 that were exclusively breastfed is from the same source. The 798 report, by definition, indicates “. . . the actual number of individuals by category . . . who received at least one WIC food instrument or food during the (reporting) month . . .”

The 32,038 figure is an average drawn from a small sample of the detailed files sent along with the rebate invoice and was used to illustrate both the clients issued contract formula, and then was used as a denominator to calculate the percent of clients issued exempt formula.

Therefore, these are different sets of numbers used for distinct purposes and cannot be used to break down the total average infants. To explain further, the average number of infants served by the Illinois WIC Program varied as much as 6.7% over the 12 months in the FFY 2024 798 report, and the small sample of the average monthly number of participants issued contract brand infant formula varied by 1.4%. The combination of the variance of these 2 numbers listed in the contract (8.4%) more or less explains the variance of the 2 figures given in the question (10.8%).

13. Question: Contract, Section 1.2.4.1 & 1.2.4.4, pgs. 6 & 7 – Both of these sections reference program contacts referenced in section 5.1.8. There is no section 5.1.8 within this document. This Section is also referenced in Section 1.3.5.1.

Answer: Section 5.1.8. was the section with the contact and invoicing information in the previous (current) contract. This has been updated to section 4.1.6.

14. Question: Contract, Section 1.2.4.2, pg 6 - On what basis would the State deny an infant formula that was “new and improved”? Since manufacturers are not making product solely for the State, to allow the State to have “sole right to make final determination of what constitutes an acceptable replacement” is not practical. Manufacturing a product formulated for and distributed only in the State could dramatically affect a manufacturer’s ability to execute the requirements of this contract. Please remove this section. If not removed, please provide the reasons that the State feels this provision is in the best interest of the Department, the State, WIC infant participants and the contractor.

Answer: The words “new and improved” are not in proposed contract in Section 1.2.4.2. Only the word “new” is.

To the question of “new”, as with all new foods, manufacturers must submit the item to the Illinois WIC Program for review and approval to be added to the Authorized Product List (APL). This is a routine review and USDA allows states to evaluate all products for inclusion in each state’s APL.

To the question of “or any substitution for a similar existing product”, the State agrees and will remove this phrase in Section 1.2.4.2.

15. Question: Contract, Section 1.2.4.3, pg 7 – Please revise the language in this section to “….or provide a rebate on the newly formulated product that yields the “same percent discount”.

Answer: Similar to the response to Question 14, and referring to the wording in Section 1.2.4.2., “The WIC Program reserves the right to approve or reject for issuance any 'new' infant formula introduced by the Vendor . . .” Further, the words “net cost per unit” reflect the words in Attachment D, which the USDA requires the bidder to submit. To help reduce confusion, the State will change “net cost per unit” to “net price per unit” in Section 1.2.4.3. to match the exact words in Attachment D, even though “cost” and “price” are often used interchangeably.

16. Question: Contract, Section 1.2.5, pg 7 - To prevent an unnecessary burden on the State a manufacturer may only conduct periodic detailed reviews of data files for overbilling. Would the State be willing to consider extending the 90-calendar day notification period to correct overbilling, subject to the availability of food funds?

Answer: The State will keep the 90 days. Note that the contract states “within 90 calendar days of payment of the invoice” so this may be more than 90 days, given the timing of the notification. This occurred in the current contract and using the same “within 90 calendar days of payment of the invoice” contract stipulation, the vendor was able to notify the State and get four monthly invoices corrected covering 122 total calendar days.

17. Question: Contract, Section 1.3.3, pg 13

a. The purpose of a liquidated damages clause is not to exact a penalty, but to provide a reasonable estimate of the anticipated actual harm which will occur from a breach of contract when such damages are not easily calculated. Here, if a Contractor fails to supply any Contract infant formula or fails to pay a rebate invoice, the damages are easily calculable, and therefore a liquidated damages clause is unnecessary. Further, the State has set forth a plan for dealing with such unavailability in the Risk Management section. Therefore, please remove this provision.

b. If not removed, please confirm that this provision would only apply if every brand and form of Contract infant formula were unavailable.

c. Does the State intend to invoke both the penalties of rebate invoicing billing credits and providing a rebate for non-contract brand infant formula as referenced in Section 1.3.4.2 or are they mutually exclusive?

Answer:

a. Section 1.3.3. reflects the USDA requirement in 7 CFR 246.16a(n) to provide remedies in the event of a recall. Section 1.3.4.2. under Risk Management offers another remedy but for a different situation. Therefore Section 1.3.3. will remain.

b. Section 1.3.3. is but one option to address a specific situation, i.e., “widespread unavailability”. Section 1.3.4.2. again addresses another possible situation, i.e., “shortages or outages, or” disruptions. The State and USDA reserve the right to exercise their options in the manner they deem best for their participants.

c. Again, the two sections have different remedies to address different situations. The State and USDA reserve the right to exercise their options in the manner they deem best for their participants.

18. Question: Contract, Section 1.3.4.1, pg 14 – Given the State plans to issue all contract brand infant formulas under one subcategory, is it the State’s intent in any shortage situation to first advise clients to purchase another contract brand or the primary contract brand? With participants having choice at shelf of all contract brand formulas, why would it be necessary for the Vendor to provide a rebate on competitively manufactured product (as outlined in 1.3.4.2) unless all contract brands were in a shortage/outage situation?

Answer: Question 1: yes, the State intends in any shortage situation to first advise clients to purchase another contract brand or the primary contract brand. Question 2: the State reserves its right to the options outlined in 1.3.4.2., however, it would do so “in the event of a formula recall in accordance with any applicable USDA waivers” as stated in Section 1.3.4.2.1.

19. Question: Contract, Section 1.3.4.1, pg 14 – While the goal of increasing participant choice at retail is reasonable, how will the State implement this while also abiding by the federal regulatory requirement to issue the primary contract brand as the first choice of issuance?

Answer: Per 7 CFR 246.2 “Contract brand infant formula means all infant formulas (except exempt infant formulas) produced by the manufacturer awarded the infant formula cost containment contract.” This definition is referenced in 7 CFR 246.10(e)(1)(iii) Infant formula requirement, and includes to the definition of Contract brand infant formula (see previous cite). These two combined should be evidence that the State will ensure that the primary contracted formula will be provided as the formula of first choice.

20. Question: Contract, Section 1.3.4.2, pg 15 – Please revise the language in this section to “…providing a rebate on the alternative product that yields the same percent discount even if it is a different physical form of the same contract brand infant formula”.

Answer: The State will change the existing language of “net cost per unit” to “net price per unit” because this refers to the USDA-mandated Attachment D, Column M (“Net Price Per Unit”). This Attachment D must be completed to submit a bid. “Net Price Per Unit” is the result of Column F (“Lowest Wholesale Full Truckload Price Per Unit”) minus Column G (“Rebate Bid Per Unit”). Column N (“Percent Rebate”) is then Column G divided by Column F.

21. Question: Contract, Section 1.3.5, pg 16 - Please confirm a hard copy notice would only be required in the event electronic notification was unavailable.

Answer: The State defers to the exact wording and requirements in Section 4.20., which is boilerplate and cannot be altered by the Illinois WIC Program without permission.

22. Question: Contract, Section 1.3.6, pg 16

a. If a new Contractor is awarded the contract, please describe in detail the State’s transition plan.

b. Please confirm that if a participant comes to a clinic in January to receive three months of infant formula benefits, they will receive January benefits for the current contract holder’s formula and February and March’s infant formula benefits for the new contract holder’s formula. If not confirmed, please provide the State’s plan for issuance during the months of January, February and March.

Answer:

a. The State believes the description in 1.3.6. explains it well. Adding more detailed narrative to help explain, the key is in Section 1.3.6.2., “Two separate invoices will be created in the event the Awarded Vendor is not the previous/current Vendor.” As the old Vendor’s formula issuance ends after January 31, 2026 (or later, as noted in Section 1.3.6.3.), and formula is redeemed by participants afterwards, and the new Vendor formula begins to be issued and redeemed at the start of the new contract, there will be dual invoices created, submitted and paid by the respective Vendors. So, for approximately a three-month window there will be two sets of invoices: the old Vendor ramping downward, and the new Vendor ramping upward.

b. The response to this is similar to the above response. Part A. To reiterate, and referencing the proposed contract, Section 1.3.6.1., “The State WIC Program routinely issues formula in 3 month increments and expects the current Vendor's products to be issued until January 31, 2026 (or the end of the contract, as stipulated in Section 1.3.6.3.), and the State would therefore expect redemptions until at least April 30, 2026.”

23. Question: Contract, Section 1.3.6.3, pg 17 – Please confirm the 120-day extension option to extend is available with mutual consent from the manufacturer.

Answer: Correct. The State would seek consent from the manufacturer for the limited-time 120-day extension.

24. Question: Contract, Section 1.4, pg 17 – Please confirm the information requested in this section is only required from the winning vendor and none of this information is required in any bid submission documents.

Answer: Correct. Not required with bid.

25. Question: Contract, Section 1.7, pg 18 - Please confirm the location request for where services will be performed is not applicable to a rebate contract and is not required to be completed.

Answer: Correct. This is not applicable.

26. Question: Contract, Section 2.3, pg 19 – Please confirm the Net Cost to be populated in this section should be the number entered on the bid sheet in the Net Cost per Unit column. If not confirmed, please provide additional information as to what should be entered here.

Answer: Correct. Section 2.3. is the same as Columns M and N in Attachment D. The table is duplicated here simply to reflect the USDA-required Attachment D Excel Bid Sheet in the proposed contract. The figures will be the same for both.

27. Question: Contract, Section 3.3, pg 21 - As the State can appreciate a manufacturer’s circumstances in this highly regulated environment can change over the course of a potential seven-year contract period, it is essential to allow a manufacturer, with reasonable notice to the State, the ability to exit the contract if circumstances dictate. Please allow a termination provision for the manufacturer with a requirement for 18-month notification period.

Answer: Section 3.3. is part of the boilerplate contract language in all State contracts. The Illinois WIC Program has no control over this basic clause with respect to allowing termination for convenience in favor of the State.

The proposed contract is the same as the current contract: an initial 3-year term, with the right to renew up to 4 years total, either all four (4) years, or two (2) two-year renewals. Only if the Vendor chooses not to agree to the second two-year renewal is the Vendor required to give eighteen (18) months’ notice.

The State desires to engage with a dependable and reliable infant formula contract Vendor for at least the initial 3-year initial term. This ensures stability not only for the State of Illinois WIC Program and USDA, but also for the vulnerable and at-risk participants and families we serve. If the bidder has concerns about the infant formula regulations and environment, bidders should adjust their bids accordingly to reflect this.

28. Question: Contract, Section 4.11, pg 25 - Please confirm the insurance requirements detailed here are not applicable to an infant formula rebate contract in which the contractor is paying the state.

a. a. If not confirmed, please detail why the State would require automotive liability insurance for an infant formula rebate contract.

Answer: a. Correct. As seen in other parts of Section 4, Standard Business Terms and Conditions, this is part of the boilerplate contract language in all State contracts. The Illinois WIC Program has no control over whether this basic clause is included in the contract.

29. Question: Contract, Section 5, pg 29 – Please identify which document is Agency Specific Terms and Conditions as there is no document provided labeled as such. Please provide this document and advise if this needs to be included with any bid proposal.

Answer: Document does not need to be included with bid. See attachment titled “DHS IFB Infant Formula Rebate-B-47390-Revised” in BidBuy for updated version with standard terms added.

30. Question: Contract, Section 6, pg 29 – Please confirm if any of these documents listed here would need to be included in a bid proposal.

Answer: Only document listed in this section that needs to be included with bid is the Financial Disclosure.

31. Question: Contract, Agency Use Only, pg 31 – Please confirm that the State will be populating this page and the bidder will not be checking any of the Yes or No boxes when completing and submitting a bid proposal.

Answer: State Use Only.

32. Question: WIC Infant Formula Rebate Bid Sheet – The citation referenced in the footnotes for this page appears to be incorrect. Please correct with the appropriate citation.

Answer: Thank you for bringing this issue to our attention. We received clarification from USDA that 246.16a(c)(5)(i) is still the current and correct citation. During one of the regulation updates, a technical error occurred and inadvertently removed 5(i), 5(ii), and 5(iii) from the website. USDA-FNS is currently in the process of fixing this technical error. In the meantime, we have included the sections for your reference to address bidder questions. See the attached last page.

33. Question: Offer to the State of Illinois form - Because this is an infant formula rebate contract and federal law requires that it be awarded to the vendor offering the lowest net cost to the State, please confirm that, in accordance with governing Federal law, this bid will be awarded based solely on the lowest net cost to the State as defined in the Federal WIC regulations and that no preferences will be applicable. As such, please confirm the preference section is not applicable and none of the section needs to be completed in any bid proposal.

Answer: Please see answer from Question #7.

Additional information in response to Question 32 – see above.

34. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1. Scope of Work, 1.1 Overview and Purpose, Page 2: Does the State anticipate allowing the redemption of WIC Benefits online during the course of this contract? Please provide any additional details regarding the timing or execution of WIC Online. Please confirm the State will work with the contracted manufacturer to assure contractual compliance with the addition of WIC Online.

Answer: The current Illinois WIC EBT processor, Solutran, does not now allow and has no plans to implement online Illinois WIC Benefits redemptions. That contract ends on April 30, 2026. Solutran has indicated they will not renew the contract. Therefore, the State is seeking a new EBT processor and will soon post an RFP to procure one. However, due to delays, the State has requested Solutran agree to a one-year extension to allow transition. Solutran has indicated they will sign the one-year extension, and the contract will end April 30, 2027, or as soon as the transition to the new EBT provider is complete. The soonest any work could be done for online WIC benefit redemptions would be with the implementation of the new Illinois WIC EBT provider on or about May 1, 2027.

35. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1. Scope of Work, 1.2 Supplies and/or Services Required, 1.2.1 Plan of Action, Page 3: Please confirm the State will provide a list of all currently authorized and potential vendors for notification to the awarded vendor upon award of this contract.

Answer: yes, the State will provide the winning bidder with the list of currently authorized and potential retail vendors for notification.

36. Question: llinois DHS Contract WIC Infant Formula Rebate, 1. Scope of Work, 1.2 Supplies and/or Services Required, 1.2.1 Plan of Action, Page 3: Vendor/Retail questions

a. Please confirm authorized vendors are responsible for maintaining adequate stock of authorized infant formulas. The manufacturer is responsible for fulfilling orders from retailers through its established distribution network.

b. Please confirm that in the event of a shortage of supplies, the State will first utilize a different physical form and then an alternate rebate eligible brand of the winning manufacturer’s product line prior to the issuance of non-contract non-exempt formulas produced by other manufacturers.

c. Please clarify how the State determines the average retail price.

d. How many times annually does the State perform pricing surveys of infant formula?

e. Does the state perform compliance buys to confirm that WIC authorized retailers are only allowing the purchase of the formula listed on the Food Instrument?

f. If the state is not currently performing these compliance buys, we urge the state to begin.

g. How many vendors have been sanctioned over the course of the current contract for allowing the purchase of a formula not specified on the Food Instrument?

Answer:

a. yes, vendors are responsible for maintaining adequate stock of authorized infant formulas. Per 77 Illinois Administrative Code Part 672.425 b), “Vendors with a grocery or grocery/pharmacy Vendor contract shall maintain minimum required quantities of foods and infant formulas at all times (see Section 672.215(d)).”

b. Correct. Please refer to proposed contract section 1.3.4.2., starting with the second sentence.

c. the State uses a Not-To-Exceed (NTE) retail price limitation system that reviews the Requested Amounts submitted by vendors and adjusts up or down based upon a monthly analysis using set criteria. NTEs are set for a month based upon the analysis from the two months’ previous. Prices are distributed by Vendor Peer Groups that defined by the number of active registers and whether the Vendor is in a Rural or Urban area as defined by USDA. Finally, the State may and does add an additional percent to the NTEs to allow for price fluctuations that may occur more frequently than could be accounted for in the monthly NTE review process. Illinois WIC Program Vendor Management staff routinely review prices redeemed and the NTEs the mostly automated process. The State can and has recently adjusted the NTE to allow for disruptive market price increases (e.g., egg prices).

d. the State has applied for and currently has in place a USDA authorized Shelf Price Collection Exemption waiver. This waiver is granted to State WIC Programs who use an EBT system to monitor and review shelf prices requested by Vendors. The most recent waiver was granted on August 14, 2024. The review of shelf prices is described in the answer to 3. c., above.

e. yes, however other foods are also selected when completing compliance buys. It is rare that only formula is purchased on a buy.

f. The State through its contracted private investigation firm performs approximately 1,245 monitoring visits per contract year. Each Federal Fiscal Year, USDA rules mandate that a minimum of 5% of vendors who are deemed to be high-risk by their redemption patterns receive a monitoring visit and another, separate 5% of the vendor community for random, routine monitoring visits. As of the date of this response, there are currently 1,541 authorized retail food vendors in the WIC Program.

g. Zero (0). As mentioned in the answer to item e., almost always a variety of foods are selected when completing compliance buys.

37. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1. Scope of Work, 1.2 Supplies and/or Services Required, 1.2.1 Plan of Action, Page 3:

a. Please confirm the States will provide vendor redemption data to the Contractor when issues of fraud arise.

b. Please confirm the States will work with the Contractor to provide such data in instances in which rebates have been paid for contracted products based on fraudulent transactions that involve infant formula.

c. Please confirm the States agree to discuss with the Contractor appropriate means for addressing payment issues identified through manufacturer audits and/or fraud-related issues directly affecting the manufacturer.

d. Please confirm the States will partner with the Contractor on recovery in instances where fraud has been discovered, and it has been further determined the manufacturer was overbilled for infant formula.

e. How many vendors have been disqualified due to fraud issues in each of the last three years?

f. Please confirm that there is no time limit on disputes arising from fraud or other illegal activity that prevents the Contractor from being able to identify the incorrect billing earlier. If not confirmed, please explain why such a time limit is appropriate.

g. Please explain the States’ processes to identify and curb fraud and how the state plans to secure the interests of its Contractor.

Answer:

38. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.2 Supplies and/or Services Required, 1.2.1 Plan of Action, Page 4: For each State Agency, what percentage of participants have incomes that exceed 185% of the federal poverty level?

Answer: only those families that exceed 185% of the FPL would be part of the State’s Medicaid Expansion program with a Title 19 case. And only then does the WIC agency request that the family provide a verbal dollar amount of their income. This income is not verified, and no systematic validation checks are conducted. Therefore, this percent is unknown.

39. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.2 Supplies and/or Services Required, 1.2.1 Plan of Action, Page 4: For each State Agency, what percentage of infants are certified for participation in the program through their participation in other federal programs (i.e., SNAP, TANF or Medicaid)?

Answer: For Calendar Year 2024, using data from the IWIC system, the percent of all Illinois WIC Program infant participants deemed adjunctively eligible for WIC was 72%. However, the data appears to include terminated and ineligible records which makes the percentage appear lower than it should be. Due to current inherent system limitations, we are not able to filter out those records to give a more precise percent.

40. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.2 Supplies and/or Services Required, 1.2.1.2, Page 4: Regarding WIC Food Centers, we have the following questions:

a. What percentage of formula is currently distributed through the food centers?

b. Please describe in detail how the WIC Food Centers ensure WIC participants do not receive more than the FNB outlined by the USDA.

c. What percentage of participants redeem their benefits in food centers?

d. After redeeming their WIC benefits and participants want to buy additional groceries, are they allowed to do that in the food centers?

e. Do the Food Centers require any special labeling on product indicating the product is not for retail sale?

f. Please confirm that the state understands that the Catholic Charities food centers will be treated as any other retail customer by the manufacturer where price is concerned.

g. Can the State confirm that it conducts compliance buys at the food centers to ensure that formula is handled correctly?

h. How many centers receive compliance buys each year?

Answer

41. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.2.4 Product Changes, Pages 6: Will the State be willing to change the price change notification from 90 days to 60 days or the same time as other retail customers?

Answer: Section 1.2.4. Product Changes covers all changes, not just price changes. It is the other changes, such as stated in 1.2.4.4., including but not limited to “. . . the label or packaging (including color or shape), UPC, container size, reconstitution amount or reformulation of the contract brand infant formulas . . .” for which the State requires the 90 days’ notice. The State must then make changes to its own issuance system, notifications to providers, clients, healthcare providers, etc. To remain consistent, the State requires 90 days’ notice for all product changes.

42. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.2.5 Billing Errors, Page 7: Please confirm that this stipulation is a reciprocal right for the manufacturer.

Answer: this section is already exclusively for the formula Vendor/manufacturer. There is no need to change this.

43. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.2.10 Rebate Billing Procedures, Page 9: What percentage of issued formula benefits are redeemed?

Answer: as of Q1 – Calendar Year 2025, approximately 80% of Category 21 – Contract Brand Formula issued was redeemed by WIC clients.

44. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.2.10 Rebate Billing Procedures, Page 9: If the thirtieth day falls on a Sunday or a banking holiday, please confirm payment made the following business day will not constitute a late payment or a penalizing the contractor. Many other WIC contracts have this provision.

Answer: The State makes every effort to submit the monthly rebate invoice in the first 5 business days of the month which should allow sufficient time for the manufacturer to meet the requirement even when the 30th falls on a weekend or a bank holiday. However, if the Vendor has any concerns about the payment, please communicate with the State WIC Program Contact listed in 4.1.6. as soon as possible.

45. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.2.10. Rebate Billing Procedures, 1.2.10.2 Page 9: Please confirm that the contractor is permitted to withhold payment if the overbilling is not supported by the agreed upon invoice documentation to substantiate the invoice balance, and the amount in question significantly exceeds the average of the past 3 months of invoices submitted by the state (variance of greater than 100%).

Answer: Per proposed contract Section 1.2.10.3., “The awarded vendor cannot withhold rebate payments under any circumstances.”

46. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.2.10.3, Page 10: Please confirm that this stipulation is a reciprocal right for the manufacturer.

Answer: This section is simply a billing procedure, and similar to the response to Question 9, is exclusively for the formula Vendor/manufacturer. No reciprocity is needed.

47. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.3 Milestones and Deliverables, 1.3.1, Page 13: Please clarify the State’s position on non-contract, non-exempt issuance. Will non-contract, non-exempt issuance be permitted?

Answer: No. The State will not issue non-contract, non-exempt formula benefits.

48. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.3 Milestones and Deliverables, 1.3.3.2, Page 14: The purpose of a liquidated damages clause is not to exact a penalty, but to provide a reasonable estimate of the anticipated actual harm which will occur from a breach of contract when such damages are not easily calculated. Here, if a Contractor fails to supply any Contract infant formula or fails to pay a rebate invoice, the damages are easily calculable, and therefore a liquidated damages clause is unnecessary. Further, the State has set forth a plan for dealing with such unavailability in the Risk Management section, and many retailers typically have ten to fourteen days of inventory on hand. The Access to Baby Formula Act 2022 laid out how States should handle an infant formula recall or shortage. We are unaware of any other contract that seeks this type of penalty above and beyond the shortage/recall remedies provided for in the federal regulation. We urge the State to strike this provision as this has already been addressed in 7 CFR 246(n).

a. Please provide any details about the utilization of this provision during the current contract cycle, including number of incidences, days, and dollar amounts.

Answer a: Section 1.3.3. reflects the USDA requirement in 7 CFR 246.16a(n) to provide remedies in the event of a recall. The sub-sections describe different options in response to different scenarios. The State and USDA reserve the right to exercise their options in the manner they deem best for their participants in accordance with applicable regulations. To the question of utilization of this option in the current contract, so far it has not been invoked. In response to the recent infant formula recall, the State chose to invoke the option offered in 7 CFR 246.16a(n)(1), and alternate unit sizes that may have exceeded the maximum monthly allowance were provided, in accordance with approved USDA waivers allowing such.

49. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.3.4 Risk Management, 1.3.4.1 Page 14: Please explain what types of formulas fall under Category 21.

a. Please explain how the state will ensure that the primary contracted formula (the formula manufacturers bid with) will be provided as the formula of first choice (as contemplated in the federal regulations)? Without following this guidance, it is challenging for manufacturers to plan and produce appropriate amounts of not only the primary contracted formula, but other contracted formulas as well.

b. Or confirm that the state will only move other contracted formulas into the subcategory of the primary contracted formula if there is a formula shortage and the state is operating under federal waivers.

50. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.3 Milestones and Deliverables, 1.3.4.2, Page 15: Please clarify how the State is defining ‘shortage/outage’, and how it differs from widespread unavailability.

Answer: the State does not have a clear definition of these situations or terms and needs this flexibility to be able to respond to unforeseeable events. The response is the same as for Question 15 (a), in that the State and USDA reserve the right to exercise their options in the manner they deem best for their participants in accordance with applicable regulations.

51. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.3.4.2, Page 15: If not removed, please confirm that this provision would only apply if every brand and form of Contract infant formula were unavailable. If not confirmed, please state all the reasons why the State would choose to exact a penalty against the Contractor before it provided other available forms and brands of the Contractor's Contract infant formula to WIC participants.

Answer: as stated further in 1.3.4.2, “. . . . the first option the State would pursue is to authorize redemption of the same contract brand infant formula in a different physical form (liquid concentrate, powder, ready-to-feed) for the duration of the shortage/outage.” Please note the emphasis on the word “first”. Then note the following second option immediately following the first option: “If no forms of the contract brand infant formula are readily accessible, alternative formula choices for WIC clients may include a different size of the same formula that may exceed the maximum monthly allowance . . .” Both of these options were used successfully during the recent nationwide infant shortage under the current rebate contract.

52. Question: Illinois DHS Contract WIC Infant Formula Rebate, 1.4 Vendor/Staff Specifications, Page 17: Is the information requested in this section required to be provided in a bid proposal or just provided by the winning contractor? If required, where should this information be provided in a bid proposal?

Answer: as stated, the “winning” Vendor must supply this. As such, the bidder will only be determined after price quotes are opened, and thus, this will not need to be provided in the bid proposal.

53. Question: Illinois DHS Contract WIC Infant Formula Rebate, 3. Term and Termination, 3.1 Term, 3.1.2 Renewal, Page 20: Will the State please confirm that the contract will be extended by mutual written consent?

Answer: correct. Both parties must agree to the renewal.

54. Question: Illinois DHS Contract WIC Infant Formula Rebate, 4.7 Force Majeure, Page 24: Would the State please amend this definition of Force Majeure to match the list of scenarios listed on page 16, section 1.3.4.3?

Answer: Section 4.7 Force Majeure is standard boilerplate language from the State of Illinois Procurement Office. As such the Illinois WIC Program has no control over this. It cannot be changed or altered.

55. Question: Illinois DHS Contract WIC Infant Formula Rebate, 4.11. Insurance, Page 25: Please confirm this requirement is only necessary post award.

Answer: As seen in other parts of Section 4, Standard Business Terms and Conditions, this is part of the boilerplate contract language in all State contracts. The Illinois WIC Program has no control over whether this basic clause is included in the contract. For this rebate contract bid, it is not applicable.

56. Question: Illinois DHS Contract WIC Infant Formula Rebate, 4.25 Warranties for Supplies and Services, 4.25.1., Page 28: Please strike this requirement as this is a rebate contract. The State is not purchasing goods directly from the manufacturer in this contract.

Answer: see previous response to Question 22.

57. Question: Attachment A: Would the State please provide monthly participation data across the following buckets: infants receiving contract formula, infants receiving non-contract formula, infants receiving exempt formula for the 2024 year?

Answer: the State is not obligated to provide this information monthly for Exhibit A. Please note that some of this information is given in the narrative in contract Section 1.2.1

58. Question: Attachment E: Please provide the latest 6 months of data for issuance and number of infants by brand, size, and unit for all contract, exempt, and non-contract non-exempt infant formulas.

Answer: the State has provided the latest (as of the bid posting date) of the redemptions for all contract, exempt, and non-contract non-exempt infant formulas. This, combined with the response to Question 10, gives the bidder enough information.

59. Question: Attachment I: Would the State please provide data to match the months of invoices provided?

Answer: the State is only required to provide the invoices as samples for Attachment G (not I), and not the underlying data for the invoices.

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