SOW_FFV Maui Schools.pdf

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STATEMENT OF WORK

I. INTRODUCTION

A. The Defense Logistics Agency (“DLA”) Troop Support Indo-Pacific (“Agency”) intends to enter into an Simplified Indefinite-Delivery Contract (“SIDC”) with a commercial firm to supply a full-line of United States Department of Agriculture (“USDA”) Grade Number 1 or better quality Fresh Fruits and Vegetables (“FF&V”) products to Non-Department of Defense (DoD) United States Department of Agriculture (USDA) School customers, in Maui, Hawaii. Specific quality requirements per item are included in the Schedule of Items (Attachment 1). Failure to propose the specified quality requirement per item as identified in Attachment 1 may render an offeror’s proposal technically unacceptable. If the item’s description in Attachment 1 does not provide a specific quality grade, the minimum quality grade that is required to meet the terms of this Solicitation is USDA Grade Number 1.

A successful offeror(s) will be required to source, purchase, store, and deliver a variety of FF&V items to DLA Troop Support Indo-Pacific customers on an ongoing basis, while at the same time maintaining acceptable fill rates, levels of customer service, and product quality. Therefore, an offeror must currently possess the physical, logistical, and financial resources to serve as a commercial distributor of a variety of FF&V items. It is neither sufficient nor acceptable for an offeror to be a third-party logistics (“3PL”) company (i.e. a company that does not intend to serve as the FF&V supplier but instead intends to subcontract out the majority of aspects required by the contract, including but not limited to ordering, warehousing, distribution, etc.). By offering, an offeror affirms its status as a current and functioning commercial distributor of FF&V items. In order to determine whether an offeror meets the technical requirement of being a current and functioning commercial FF&V distributor, the Contracting Officer will require an offeror to provide its current, valid Perishable Agricultural Commodities Act (“PACA”) license.

B. This solicitation consists of non-Department of Defense (DoD) and private non-profit school customers. Offerors are required to offer on all items in the Schedule of Items; failure to do so may, result in exclusion from award consideration.

C. This solicitation is being issued as a 100% small business set-aside. In accordance with 13 CFR 121.406(e), if at least 50% of the estimated contract value of an acquisition for multiple items is composed of items that are manufactured by small business concerns, then a waiver of the non-manufacturer rule is not required. As such, for this acquisition, it is expected that items comprising at least 50% of the contract value will be manufactured by small business concerns.

D. This solicitation utilizes the Lowest Price Technically Acceptable (LPTA) Source Selection Process.

Please refer to the Addendum to FAR 52.212-2 contained in this Solicitation for additional information about how each offeror’s price, and price components, will be evaluated.

E. Any award resulting from this solicitation will be a Simplified Indefinite-Delivery Contract (SIDC) that is fixed in price subject to the applicable Economic Price Adjustment (EPA) provision. An SIDC will provide for an indefinite quantity, within stated limits, of specific supplies or services to be furnished during a fixed period, with deliveries to be scheduled by placing orders with the contractor (reference FAR 16.504(a)).

F. All Fresh Fruit and Vegetable products delivered under this SIDC shall be sourced domestically, no exceptions. Non- DoD USDA School Customers are allowed to utilize the resulting SIDC only when

P a g e | 2 they use Federal funding. Additionally, these customers shall be required to utilize Federal funding on domestic items ONLY. Non-Domestic items are not authorized using Federal funding.

II. EFFECTIVE PERIOD OF CONTRACT

A. The resultant SIDC may be for a total of five (5) years to include a 12-month Base Period and four tier periods, commencing on the effective date of the contract. The Base Period will include a start-up period, see paragraph IV. CONTRACT START-UP PERIOD for details.

Estimated Performance Period: January 27, 2025 - January 26, 2030 (5 years)

Base Period: 01/27/2025 - 01/26/2026 (12 months) Tier 1: 01/27/2026 - 01/26/2027 (12 months) Tier 2: 01/27/2027 - 01/26/2028 (12 months) Tier 3: 01/27/2028 - 01/26/2029 (12 months) Tier 4: 01/27/2029 - 01/26/2030 (12 months)

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

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

III. ESTIMATED DOLLAR VALUE / GUARANTEED MINIMUM / MAXIMUM

A. This acquisition is being processed under the authority of FAR 13.5, "Simplified Procedures for Certain

Commercial Products," utilizing simplified procedures for soliciting competition, evaluation, award documentation, and notification in compliance with FAR 13.1.

B. This solicitation is for a five-year contract comprising a 12-month base performance period and four additional 12-month performance periods, referred to as tiers. The base period and each tier are anticipated to have its own pricing for the 12-month performance period. The estimated dollar value for the base period and each tier is $910,000.00. The term “estimate” refers to the Agency’s good faith estimate of the requirement for the specified period. The guaranteed minimum obligation is $91,000.00 for the entire contract duration. The guaranteed minimum may be ordered during any tier/performance period or combination of tier/performance periods. The Government may fulfill the guaranteed minimum amount by issuing a single delivery order or any number of delivery orders. The maximum dollar value of the contract, representing the highest limit the government can obligate under the contract, is $7,000,000.00 over the five-year contract duration.

C. This solicitation covers multiple ordering facilities as outlined in the Customer Deliveries section of the solicitation document and/or Attachment 2 – Delivery Schedule-Customer List. The ordering facilities within the region covered by this solicitation may be subject to addition or subtraction as circumstances dictate. It is important to note that any such adjustments will be made without incurring additional costs to the Government, as previously stipulated.

IV. CONTRACT START-UP PERIOD

A. After an award is made, the Contractor (also referred to as the Awardee) will be required to accept orders on the start date of the contract and take steps to implement its new contract during the initial ordering/delivery period.

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V. ELECTRONIC ORDERING CATALOGS

Offerors will be required to maintain electronic catalogs that list all items available to the customers covered under this solicitation. The catalog for Non-DoD USDA Schools customers shall be built and maintained in USDA’s Fresh Fruits and Vegetables Order Receipt System (FFAVORS) Web. Each item in the catalog shall contain the corresponding national or local stock number, Government item description, packaging characteristics, unit of issue and unit price.

A. Catalog Maintenance

1. New Items

(a) Prior to commencement of the first order, DLA Troop Support Indo-Pacific, the customer and the vendor will collaborate to identify items not found in the Schedule of Items which are to be added to the ordering catalog. Neither the vendor nor customer is permitted to add a new item to the catalog without initiating a new item request to the Contracting Officer.

(b) After ordering commencement, if a customer desires to order a Fresh Fruit and Vegetable

(FF&V) item that is not part of the ordering catalog, the contractor will be allowed a maximum of twenty (20) days to source the item, obtain a stock number from DLA Troop Support Indo- Pacific (if required) and add the item to the ordering catalog via an 832-catalog transaction.

These items should then become a permanent part of the contractor’s inventory, dependent upon availability, after the Contracting Officer’s determination of fair and reasonable pricing. The contractor shall utilize the Contracting Officer provided form when requesting all item approvals (additions and/or changes). The form is mandatory and is Attachment 3 – Request New Items Form.

2. Catalog Pricing

(a) Schedule of Items Pricing: Items priced in the Schedule of Items (See Attachment 1 – Schedule of Items) will be included in the ordering catalog following award. Schedule of Items will be determined fair and reasonable prior to award. The final proposed price for each item in the Schedule of Items will be the catalog price during the first week of customer ordering.

(b) Contractor-Requested Catalog Price Changes: Upon award, all items included in the Solicitation’s Schedule of Items that ultimately are included in the ordering catalogs have been deemed “fair and reasonable” from a pricing standpoint by the Contracting Officer. No further analysis is necessary with regard to those prices until said prices are subject to change per a request by the Contractor under the terms of the EPA provision. In accordance with said provision, a Contractor is permitted to submit an adjustment every two weeks, to request for any items found on the catalog when consistent with actual price changes of said items encountered by the Contractor as reflected in the commercial market. When such a request occurs, the Contracting Officer is required to make an entirely new “fair and reasonable” determination of that item’s new requested price. Prices are to be adjusted downward or upward, as appropriate, according to “last receipt” price, as defined under the EPA terms of this solicitation. If the new requested price cannot be found “fair and reasonable” by the Contracting Officer, the last approved price will remain effective for purposes of the ordering catalog and the Contractor shall continue support of that item(s) for Agency customers the following week and beyond until a new “fair and reasonable” price is approved. The Contracting Officer’s failure to approve

P a g e | 4 a contractor’s request for a weekly adjustment of a price will NOT result in the automatic removal of the corresponding item from the following week’s ordering catalog. In a circumstance where an item’s price is “held over” from a prior week, having not been adjusted due to the Contracting Officer’s rejection of a subsequent weekly price adjustment request (i.e.

newly proposed price cannot be determined “fair and reasonable”), it is expected that the terms of the EPA provision continue to be strictly adhered to. It is unacceptable, and a breach of said terms, if a Contractor uses a “held over” price to overcharge the Government at a point when that price exceeds the item’s true price as paid by the Contractor in its business, which reflects commercial market conditions for that item. Therefore, in the “held over” scenario as described above as well as all scenarios encountered during contract performance, price decreases are expected when and where applicable. Please note that the Contracting Officer has wide discretion in managing the above-described processes and resolving any resulting issues.

(c) Contractor-Requested Catalog Additions: Before an item is added to the catalog vendors are required to submit to the contracting officer a request of proposed catalog additions (See Attachment 3 – Request New Items Form). The request shall include the stock number, Government item description, proposed unit price and a corresponding supplier invoice or quote, and proposed distribution price. The request is due by 9:00 AM HST on the Wednesday prior to inclusion of the Sunday catalog updates.

Please note: Meeting this deadline does not guarantee that the item’s price will be approved as “fair and reasonable”, nor does it mean that the Contracting Officer will have been able to complete his/her review of the request prior to the time necessary to incorporate it into the following week’s ordering catalog. The contracting officer will review the catalog addition request and upon determining the price fair and reasonable will contact the contractor to indicate acceptance. The contractor shall then include the item on Sunday’s catalog update.

Should the proposed price fail to be determined fair and reasonable, the contracting officer will conduct negotiations with the vendor. If after negotiations the proposed pricing still cannot be determined fair and reasonable the item will not be added to the catalog.

(d) Pricing Required: The Contractor’s catalog prices, as awarded, constitute the initial catalog prices. These prices are in effect during the first ordering week (from Sunday at 12:00 AM (Eastern Time (ET), standard or daylight as applicable) through 11:59 PM on the Saturday of the following week. The prices shall remain in effect for all subsequent ordering weeks, except as otherwise adjusted in accordance with the EPA provision.

VI. ECONOMIC PRICE ADJUSTMENT (“EPA”) – ACTUAL MATERIAL COSTS FOR

SUBSISTENCE FRESH FRUITS & VEGETABLES (“FF&V” or “Produce”)

A. Warranties. For any items covered by this EPA language, the Contractor warrants that:

1. Contract Unit Price and the components of the Contract Unit Price, i.e. Delivered Price and

Distribution Price, shall not include allowances for any portion of the contingency covered by this language; and

2. Price adjustments requested during the performance of the contract shall be computed in accordance with the provisions of this language.

B. Definitions. As used throughout this language the term:

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1. “Contract Unit Price” means the total price per unit of a particular item charged to the Government for a product delivered to customers under this contract. The Contract Unit Price consists of two separate and distinct components: 1) Delivered Price, less Rebates/Discounts, and 2) Distribution Price. The unit price sum of these two components shall be rounded up or down to the nearest cent, to determine the Contract Unit Price.

2. “Delivered Price” means the commercial manufacturer, grower, or private label holder price per unit charged to the Contractor, inclusive of standard freight to the Contractor’s facility/facilities, for the purchase of a representative quantity of the item as compared to orders under this contract.

Delivered Price is the manufacturer, grower, or private label holder price that is input into the Contractor’s purchasing system as the starting basis for its pricing to customers prior to applying or deducting any additional costs or expenses, such as distribution, overhead, profit, rebates/discounts, or other costs/expenses stemming from separate financial arrangements. Delivered Price shall be substantiated with an actual invoice paid by the Contractor. In limited circumstances, quotations may be used to substantiate a Delivered Price, but only with specific approval of the Contacting Officer. The Delivered Price shall not include costs to be included in the Distribution Price.

(a) Redistributor Exception: On a case-by-case basis, for a specific item or stock keeping unit

(“SKU”), a contiguous United States (CONUS) redistributor’s most recent commercial price per unit, inclusive of standard freight to the Contractor’s facility/facilities to the Contractor of a representative quantity of product as compared to orders under the contract may be used to establish Delivered Price. A redistributor’s commercial price may only be used to establish Delivered Price when the redistributor’s price for the quantity ordered is equal to or lower than a manufacturer’s, growers, or private label holder’s current market price for a representative quantity of product inclusive of rebates/discounts. The Contracting Officer must specifically approve the use this exception. When seeking approval for the use of this exception, at a minimum, the Contractor must supply invoices from the redistributor. Quotes from the redistributor are unacceptable. Additional supporting documentation (e.g., published price list, manufacturer letter, or similar proof of price comparison) may be required. The determination of whether the supporting documentation offered is sufficient to establish a manufacturer’s, growers, or private label holder’s current market price, as well as the decision to permit the use of this exception, rests solely with the Contracting Officer.

3. “Distribution Price(s)” means the firm-fixed price portion of the Contract Unit Price, offered as a dollar amount per unit of issue, rounded up or down to the nearest cent. The Distribution Price component includes all costs associated with the Contractor’s performance that are not included in the Delivered Price, including, but not limited to: human resources, insurance, special packaging, overhead, profit, transportation from the Contractor’s facility or other place of performance to the end customers, split-case fees, ancillary in-house processing fees, subcontractor costs, etc.

4. “Grower” means the business concern that raises produce for marketing.

5. “Manufacturer” means the business concern that, with its own facilities, performs primary activities of processing or transforming agricultural products into the end item being acquired.

6. “Ordering Catalog” means the electronic listing of items and Contract unit prices available for ordering under this contract.

7. “Ordering Week” means from Sunday at 12:00 AM (Eastern Time (ET), standard or daylight as applicable) through 11:59 PM on the Saturday of the following week.

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8. “Private Label Holder” means:

(i) A manufacturer or grower with whom the Contractor holds an ownership and/or financial interest, or ownership and/or financial interest in a specific item(s) produced by a manufacturer or grower.

(ii) An entity holding an intellectual property interest, whether by ownership or license, in the label under which product is being sold in the commercial marketplace.

(iii) An entity holding exclusive marketing and/or sales authority of a product, or one holding property rights in a proprietary product formula.

9. “Rebates/Discounts” means all rebates, discounts, product allowances, food show discounts, early payment discounts (other than qualifying early payment discounts as may be defined elsewhere in this contract), and any other rebates, discounts, economic incentives, or similar financial arrangements available at the manufacturer, grower, private label holder, or redistributor level that ultimately reduces the Contractor’s price paid for a product supplied under the contract. In accordance with this language as well as other provisions of this contract, and subject to any applicable exceptions, all rebates/discounts shall be passed on to the Government via a reduced catalog price for the item to which the rebates/discounts pertain (i.e. “off invoice”). Any rebates/discounts that cannot be applied as an up-front price reduction must be submitted to the Contracting Officer via check payable to the U.S. Treasury, with an attached itemized listing of all customer purchases by line item, including contract number, call number, purchase order number and contract line-item number (“CLIN”).

10. “Redistributor” means an entity independent of the contractor that operates in the existing commercial marketplace and from which the contractor purchases product for purposes of consolidating quantities and/or obtaining lower delivered prices. Examples may include brokers, dealers, distributors, and buying groups.

11. “Standard Freight” means the published list price or prevailing market rate for transportation of items ordered under this contract from the manufacturer, grower, private label holder, or redistributor (when the Redistributor Exception applies) to the Contractor’s facility/facilities.

Standard Freight must be documented in an invoice; however, quotes may be an acceptable form of substantiation in limited circumstances and if authorized by the Contracting Officer. Standard freight may include certain ancillary costs associated with transportation which are consistent with commercial practice in the produce industry, including, but are not limited to, pallets, temperature recording devices, Tectrol, etc.

(i) In the event that the Contractor picks up its own product directly from manufacturer, grower, private label holder, or redistributor (when the Redistributor Exception applies) on an F.O.B Origin basis, or arranges for delivery transportation from a third party source other than the manufacturer, grower, private label holder, or redistributor (when the Redistributor Exception applies), the standard freight cost shall be based on market tariffs/conditions and consistent with prevailing market rates. At no time shall that cost exceed the manufacturer’s, grower’s, private label holder’s, or redistributor’s, or such entity’s carrier’s freight price normally payable by the Contractor for inbound shipments of such products and quantities to the Contractor’s facility(ies).

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12. National Allowance Program Agreement (NAPA)

a. Definitions:

i. Agreement Holder: The supplier or manufacturer that has agreed to offer discounts to DLA Troop Support Indo-Pacific on product under DLA Troop Support Indo- Pacific Subsistence Contractor contracts.

ii. National Allowance Program: The program implemented by DLA Troop Support Indo-Pacific to maximize the leverage of DLA Troop Support Indo-Pacific’s buying power and reduce the overall Product Price under contracts to the customers of DLA Troop Support Indo-Pacific.

iii. National Allowance Program Agreements (NAPAs): The agreements between DLA Troop Support Indo-Pacific and suppliers/manufacturers that identify product category allowances. These allowances or discounts apply only to the product/invoice price of the product. The NAPA does not affect the Contractor’s Distribution Price in any way.

b. DLA Troop Support has implemented a NAPA Program as part of the Subsistence Contractor Program. Under the NAPA Program, DLA Troop Support will enter into agreements with suppliers/manufacturers offering domestic products.

c. Under the NAPA Program, agreement holders will:

i. Authorize and consent to allow the Contractor(s) to distribute its products to ordering activities under the Subsistence Contractor Program.

ii. Offer discounts on the Product Price of the product ordered under Subsistence Contractor contracts, in the form of deviated allowances, whereby the price to the customer includes the discount. The deviated price is the price that will be submitted via the 832 catalog transaction.

d. NAPAs neither obligate the Contractor to carry, nor the ordering activity to purchase, any of the agreement holder’s products; however, NAPA terms will apply to any order placed by the customer for products covered by a NAPA, in which case the invoice price must reflect the NAPA price.

e. If a Contractor has a pricing agreement/arrangement with more favorable terms and/or pricing structure than those offered under the NAPA, then it is required to pass on these savings to the customer.

f. Under a contract resulting from this solicitation:

i. The Contractor agrees to bill the invoice price to the Government as specified by the NAPA allowance and initiates a bill-back to the agreement holder, if any activity orders any product covered by a NAPA. The agreement holder will reimburse allowances to the Contractor within a time period mutually agreeable to the Contractor and the agreement holder. Other off invoice or bill back arrangements may exist between the Contractor and the agreement holder, but the Contractor’s catalog price must be specified by the NAPA allowance.

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ii. Any disputes involving the NAPA between the Contractor and the agreement holder will be resolved between them according to their own commercial practice.

However, DLA Troop Support Indo-Pacific will attempt to facilitate a resolution of any such disputes.

C. Price adjustments.

1. General.

(i) All Contract Unit Prices shall be fixed and remain unchanged until changed pursuant to this language or other applicable provision of the contract. Only the Delivered Price component of the Contract Unit Price is subject to adjustment under this section. After the first ordering week, if the Contractor’s Delivered Price changes for any or all Contract Unit Prices, the Contract Unit Price shall be changed in the next week’s ordering catalog upon the Contracting Officer’s approval of the Contractor’s request, which must be submitted in accordance with paragraph (iii) below, by the same dollar amount of the change in the Delivered Price, subject to the limitations in paragraphs C.2 and D, below.

Any price changes approved by the Contracting Officer shall become effective at the beginning of the next ordering week. All ordering catalog unit prices computed in accordance with this section and in effect when an order is placed shall remain in effect for that order through delivery. DLA Troop Support Indo-Pacific will be charged the Contract Unit Price in effect at the time the order is placed, regardless of any changes in the Contract Unit Price occurring before delivery or in any subsequent ordering week.

(ii) All price changes, and catalog contract prices, are subject to review by the Government.

The Contracting Officer may, at any time, require the submission of supporting data to substantiate any requested price change or the requested continuation of the pre-existing price for any item, including prices applicable to prior ordering weeks. Upon notice from the Contracting Officer that supporting data is required, the Contractor shall promptly furnish to the Government, all supporting data, including, but not limited to, invoices, quotes, price lists, documentation regarding rebates/discounts, and any other substantiating information from the Contractor and any and all of its suppliers in the supply chain, including the manufacturer, grower, private label holder, or redistributor.

(iii) Price change requests that the Contracting Officer questions or finds to be inconsistent with the requirements of this provision shall not be posted until the Contracting Officer specifically authorizes the posting. If the Contracting Officer does not notify the Contractor by 9:00 a.m. Hawaii Standard Time each Thursday that a price or a price change request is being questioned or has been found to be erroneous, the price change(s) will post to the ordering catalog effective the beginning of the following ordering week.

The posting of updated prices in the ordering catalog, calculated in accordance with this section, constitutes a modification to this contract. No further contract modification is required to effect this change. Any changes that post to the ordering catalog do not constitute a waiver of any of the rights delineated elsewhere in the Solicitation, any resulting contract(s), or otherwise by law or regulation.

(iv) Should the Contracting Officer determine that, or question whether, a price change request contained an erroneous Contract Unit Price or price change, or cannot otherwise determine the changed price(s) to be “fair and reasonable,” such as when the changed price(s) is(are) higher than delivered prices for items of comparable quality which are

P a g e | 9 reasonably available to the Government or Contractor from other sources, the Contracting Officer will so advise the Contractor, prior to 9:00 a.m. Hawaii Standard Time on Thursday. If the Contracting Officer cannot determine a price fair and reasonable, and the Contracting Officer and the Contractor cannot negotiate a fair and reasonable price, the Contracting Officer may reject any price change and direct, in writing, that the item in question be retained on the catalog at the most recent previously approved price consistent with current market conditions. In the alternative, the Contracting Officer may authorize the removal of an item.

(v) In the event of a price change not posting or an ordering catalog Contract Unit Price not computed in accordance with this section, resulting in an incorrectly increased or decreased Contract Unit Price, upon discovery of such occurrence the Contractor shall immediately notify the Contracting Officer in writing and promptly thereafter correct its ordering catalog. In the event of an erroneous price increase in the ordering catalog, the Contractor shall submit a refund, including interest if applicable, for any amounts paid to the Contractor resulting from the erroneous price. In the event of an erroneous price decrease in the ordering catalog, the Contractor may submit a request for an equitable adjustment in the amount of the undercharge for consideration by the Contracting Officer.

The request may be entertained if the Contractor can demonstrate to the satisfaction of the Contracting Officer that the error did not result from the fault or negligence of the Contractor. The Contractor will not be entitled to reimbursement if the undercharge was the fault or negligence of the Contractor.

2. Limitations. All adjustments under this section shall be limited to the effect on Contract Unit Prices of actual increases or decreases in the Delivered Prices for material. There shall be no upward adjustment for—

(i) Supplies for which the Delivered Price is not affected by such changes.

(ii) Changes in the quantities of materials; and

(iii) Increases in Contract Unit Prices that the Contracting Officer determines are computed incorrectly (i.e. not adhering to the Contract Unit Price definition in this provision) and/or increases in Contract Unit Prices that the Contracting Officer determines are not fair and reasonable.

D. Upward ceiling on economic price adjustment. The aggregate of Delivered Price increases for each item under this section during the entire contract period shall not exceed 50% for United States Department of Agriculture (USDA) School, of the initial contract Delivered Price, except as provided below:

1. If at any time the Contractor has reason to believe that within the near future a price adjustment under the provisions of this language will be required that will exceed the Delivered Price ceiling for any item, the Contractor shall promptly notify the Contracting Officer in writing of the expected increase. In the event that the latest actual market price for an item does result in a Delivered Price that exceeds the allowable ceiling price under the contract, the Contractor shall immediately notify the Contracting Officer in writing or via its EDI 832/FFAVORS Web price change request no later than the time specified in paragraph C.1.(iii), above. With either such notification, the Contractor shall include a revised ceiling that the Contractor believes is sufficient to permit completion of

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2. The price change shall be posted for the following week’s ordering catalog. If an actual increase in the Delivered Price would raise the price for an item above its current ceiling, and the Contracting Officer and Contractor cannot negotiate a fair and reasonable price below the ceiling or if the Contracting Officer does not issue a contract modification to raise the ceiling, the Contracting Officer may reject the price change and direct that the item be retained on the contract at the last approved price. If the Contracting Officer decides to retain the item, the contractor shall continue to perform with the item at the last approved price. In the alternative, the Contracting Officer may authorize the removal of an item. The decision regarding whether to modify the contract, retain the item, or remove the item rests solely with the Contracting Officer.

E. Downward limitation on economic price adjustments. There is no downward limitation on the aggregated percentage of decreases that may be made under this section.

F. Price Audit. The Contracting Officer may require the Contractor to submit invoices and other documentation from all subcontractors at all periods and/or all suppliers or persons in the Delivered Price supply chain, up to and including the grower, manufacturer, and/or redistributor, for the purpose of confirming Delivered Prices charged to the Government, as well as to substantiate all rebate/discounts applicable to orders under the contract. In performing the price audit, the Government shall have the right to examine books, records, documents and other data, to include commercial sales data, that the Contracting Officer deems necessary to verify Contractor adherence to the provisions of this section and any other terms and conditions of the contract. Such price audits may occur up to twice a year (except as provided for below) until the end of 3 years after the date of final payment under this contract or the time periods specified in Subpart 4.7 of the Federal Acquisition Regulation (“FAR”), whichever is earlier. In addition to price audits, the Government may conduct additional examinations of records, as required by the Contracting Officer to ensure contract compliance.

G. Final invoice. The Contractor shall include a statement on the final invoice for each order that the amounts invoiced hereunder have applied all decreases required or authorized by this section.

H. Disputes. Any dispute arising under this section shall be determined in accordance with the “Disputes” clause of the contract.

VII. REBATES/DISCOUNTS AND PRICE-RELATED PROVISIONS (COMPONENT PRICE MODEL

FOR PRODUCE)

A. Terms used in this provision shall have the same definition as those included in Economic Price Adjustment (EPA) language, included herein.

B. Rebates/Discounts

1. 1. All National Allowance Program Agreement (“NAPA”) discounts, food show discounts, early payment discounts (except Qualifying Early Payment discounts discussed herein), and other discounts, rebates, allowances, economic incentives, financial arrangements, or other benefits, which reduce the Contractor’s price paid for products supplied under this contract or which are otherwise attributable to products sold under this contract, shall be passed to the Government via a reduced catalog price. Any Rebates/Discounts that cannot be applied as an up-front price reduction must be submitted via check payable to the U.S. Treasury, with an attached itemized listing of all

P a g e | 11 customer purchases by line item, including contract number, call number, purchase order number and contract line-item number (“CLIN”). Instructions for identifying discounts, rebates, allowances or other economic incentives or benefits that shall be provided to the Government or retained by the contractor are set forth in the submission requirements in the Business Proposal/Pricing and in the Reports section of the Statement of Work.

2. The contractor shall employ prevailing commercial methods in the pursuit of discounts, rebates, allowances or other economic incentives or benefits for the Government throughout the period of performance of this contract.

3. The contractor may retain Qualifying Early Payment discounts that meet the following conditions:

(i) The Early Payment discount is an incentive to encourage payment earlier than the normal payment due date.

(ii) The Early Payment discount is consistent with commercial practice.

(iii) The Early Payment discount is routinely given by the manufacturer, grower, private label holder, or redistributor to their customers, other than the Contractor, at the same discount rate and under the same conditions as provided to the Contractor.

(iv) The Early Payment Discount is not established, requested, or negotiated for the purpose of avoiding giving DLA Troop Support Indo-Pacific a lower cost or application of a rebate/discount resulting in a higher invoice price.

(v) The Early Payment discount is no more than 2 percent of the manufacturer’s, grower’s, private label holder’s, or redistributor’s invoice and the early payment is required within 10 days to obtain the discount; and

(vi) The contractor actually made the required payment within the time period required to receive the discount.

4. The Government may require the contractor to submit invoices and other documentation from all subcontractors (as defined in FAR Part 44.101) and/or any entity in the delivered price supply chain to substantiate or identify any Rebates/Discounts. If the Contracting Officer determines, after reviewing an invoice or other documentation, that a Rebate/Discount should have been, but was not, passed on to the Government, the Government shall be entitled to a refund in the amount of the overcharges, inclusive of interest. If the Contractor believes it erroneously credited a rebate/discount to the Government, Contractor may submit a request for an equitable adjustment for the amount of the undercharge. The request may be entertained if the Contractor can demonstrate to the satisfaction of the Contracting Officer that the error did not result from the fault or negligence of the Contractor. The Contractor will not be entitled to reimbursement if the undercharge was the fault or negligence of the Contractor.

5. The Contracting Officer, and/or authorized representative(s), shall have the right to examine and audit the Contractor's records relevant to pricing under the contract, including records related to the existence and proper accounting of rebates, discounts, etc. The Government may also review/audit the Contractor’s electronic purchasing system to confirm that the Delivered Price of a product sold to the Government is accurate.

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6. Failure on the part of the Contracting Officer to identify non-compliance with this provision or to challenge the Contractor’s erroneous interpretation of this provision shall not constitute waiver or a defense against the Government’s entitlement to any of Rebates/Discounts or any other remedies afforded by this section, the contract, or other applicable laws and regulations.

VIII. DOMESTIC NON-AVAILABILITY DETERMINATION – FRESH FRUITS AND VEGETABLES

A. A Class Domestic Non-Availability Determination (“DNAD”) for Federal Supply Class 8915, Fresh

Fruits and Vegetables (FF&V), dated 16 May 2008 was approved and is in effect for the DLA Troop Support/DLA Produce Long-Term Contracts. This DNAD establishes a limited Berry Amendment waiver to the requirements of DFARS 252.225- 7012, Preference for Certain Domestic Commodities, which is applicable to this Solicitation. As a result of the DNAD, non-domestic FF&V may be supplied under this contract when domestic FF&V of satisfactory quality and sufficient quantity cannot be procured as and when needed at U.S. market prices. This determination will remain in effect until these circumstances have changed and the DNAD is formally rescinded.

B. Notwithstanding this DNAD, the USDA requires that fresh produce supplied via its Federal Entitlement for the USDA School Lunch Program must be from a domestic source. Therefore, the aforementioned DNAD does not impact or negate the Government’s requirement for domestic produce in its contracts supporting Non- Department of Defense customers (i.e. Schools).

IX. ADDITION OF NEW CUSTOMERS

A. Adding Customers within the Contract’s Geographic Distribution Region (Maui, Hawaii):

1. After contract award, there may be instances when new customers request support of their fresh produce requirements. Additional DoD and/or Non-DoD federal government customers that request DLA Troop Support Indo-Pacific produce support may be added to the contract without any new acquisition or competition process, if the customer(s) is/are within the geographic distribution region covered by this contract.

2. The decision as to whether a potentially new customer is within the contract region, thus, will be added to the contract without further competition and at the existing contract prices, shall be the sole decision of the DLA Troop Support Indo-Pacific Contracting Officer.

3. Pursuant to the above, the Contracting Officer will instruct the contractor to include the customer(s) at the effective contract prices applicable to that distribution region.

B. Under no circumstance may the resulting contract’s maximum dollar value be exceeded with the addition of any customer(s) and its respective produce requirements.

X. CUSTOMER SERVICE

A. USDA and other customers conduct periodic food menu boards and similar meetings that the Contractor may be required to attend. At these meetings, the customers typically review their internal business practices and may request that the Contractor show new products, demonstrate produce preparation, and/or provide nutritional information.

B. The Contractor shall provide at least one full-time Customer Service representative to maintain continuous contact with all of the ordering customers, as well as at least one back-up representative.

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C. As an industry expert, the Contractor shall assume the responsibility of introducing new FF&V items to the customers, as well as to show cost-effective alternatives to their current choices, if the customer so desires. (For procedures to add items, see New Items Paragraph under the Section VI. Electronic Ordering Catalogs.) However, the decision as to which items are ultimately included in the Ordering Catalog are at the discretion of the customer(s) and the Contracting Officer.

XI. ORDERING SYSTEMS

A. Fresh Fruits and Vegetable Order Receipt System (“FFAVORS”): USDA customers (School customer) will utilize the FFAVORS Web catalog as applicable. The Contractor, upon award, will be provided a User ID and password to Log in and receive orders through FFAVORS Web, a web-based ordering system. The Contractor is responsible for establishing and maintaining the FFAVORS WEB catalog in accordance with the FFAVORS Web Manual (Attachment 4).

1. Accessed via the Internet. FFAVORS WEB is the Government’s ordering system for USDA

Customers. It is capable of accepting orders from the schools.

2. Customers will be able to order all of their requirements through FFAVORS WEB. The system will transmit orders to the Contractor and DLA-Troop Support Indo-Pacific.

3. In the event that the FFAVORS WEB system is not operational, the Contractor must provide alternate ways for the customer to order (e.g., by fax, by phone, pick up orders). Be aware that even in this situation, however, it is mandatory that the Contractor subsequently place the same order through FFAVORS when it becomes operational again in order to effect obligation/receipt/payment.

XII. ORDER PLACEMENT, LEAD TIME, and ADJUSTMENTS/CANCELLATION OF ORDERS

A. The minimum order requirement for any resultant contract is $100.00. This requirement shall be based on the aggregate total of orders for a specific delivery date to all customers located within a particular military base or delivery location.

B. School customers shall place their orders to accommodate at a minimum a 4-day lead time. For example, an order placed on Monday, September 1st would have a required delivery date of Friday, September 5th. See Attachment 2 Delivery Schedule-Customer List.

C. All invoice pricing will be based upon the Contract Unit Price at time of order by the customer(s).

Therefore, for any item ordered on a Friday to be delivered the following week, pricing will be based upon the catalog price in effect the day of order (Friday in this example), regardless of whether the unit price for that item subsequently changes as part of the next week’s catalog updates.

D. Once submitted through the electronic ordering system (i.e. FFAVORS), an order may be cancelled by a customer up to 24 hours before scheduled delivery via written notification to the Contractor and the Contracting Officer. Within less than 24 hours from delivery, an order may be cancelled by mutual agreement between the customer and the Contractor. In the event of an act of God, such as extreme weather, the specific situation regarding a cancelled delivery will be dealt with in an equitable manner by the Contracting Officer, who has the ultimate authority and discretion to resolve said issues.

E. Adjustments – For procedures discussing adjustments to order, refer to Attachment 4 (FFAVORS manual).

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XIII. REPACKAGING & SPLITTING OF CASES

A. For some items, DLA customers, particularly School, may require smaller pack sizes than are commonly available in the commercial marketplace. Such items are included in the Schedule of Items and may be added at a later date during contract performance. It is incumbent on the Contractor to determine how it will supply these items in accordance with the required pack sizes. In so doing, the Contractor may decide to split cases and repackage product at its own facility.

B. Splitting cases and repackaging product, as described in the preceding paragraph, do not constitute processing, and, therefore, do not meet the conditions of a private label holder, as defined in Section VI.

Accordingly, the Contractor is prohibited from including any costs associated with its own in-house splitting of cases and repackaging product in the Contractor’s Delivered Price. Instead, the costs associated with in-house splitting cases and repackaging product must be included in the Contractor’s Distribution Price.

XIV. PACKAGING, PACKING, LABELING, AND MARKINGS

A. All labeling, packaging and packing shall be in accordance with good commercial practice. Shipping containers shall comply with the National Motor Freight Classification and Uniform Freight Classification Code.

B. To ensure that the carrier and the receiving activity properly handle and store items, standard commercial precautionary markings such as “KEEP REFRIGERATED” shall be used on all cases when appropriate.

C. Protection during inclement weather is required. All products that are susceptible and sensitive to temperature must be protected by any means to prevent damage.

XV. DELIVERY INSTRUCTIONS

A. Contractors shall ensure all products are delivered in sanitary trucks that are of a commercially acceptable standard. All delivery trucks must be equipped with a lift gate to expedite the offloading of products. Trucks shall maintain proper temperatures in accordance with standard commercial practices.

Deliveries shall be FOB Destination to all delivery points. Delivery will be completed when the Contractor has unloaded the order(s) from the vehicle and placed them on the dock, and customer receiving personnel has accepted the delivery ticket, in accordance with Section XVIII below. All items will be delivered to customer locations free of damage and with all packaging and packing intact. The Contractor shall remove all excess pallets used for delivery from the delivery point. See Attachment 2 Delivery Schedule-Customer List.

B. Customers’ delivery schedules (days and times), routes, and stop-off sequences will be coordinated and verified with the customers on a post-award basis by the Contractor immediately following award and on an annual basis as required. At a minimum, deliveries to Schools shall be made on a daily basis, Monday through Friday, during the receiving hours of the cafeteria manager, which are from 6:00 a.m. to 10:30 a.m. each day. Deliveries shall not be made on the holidays specified in Section XXIV - HOLIDAYS. However, these schedules may be revised as necessary on a case-by-case basis at the approval of the Contracting Officer.

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C. Products for individual school dining facilities must be segregated. All products shall be palletized and segregated by drop-off point and loaded into the delivery vehicle in reverse drop sequence (Last In, First Out method). The intent is to provide expeditious off-loading capability and delivery to the customers.

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

XVI. INSPECTION AND ACCEPTANCE

A. Inspection and acceptance of products will be performed at destination. The inspection is normally limited to identity, count and condition; however, this may be expanded if deemed necessary by either the military Veterinary Inspector, Dining Facility Manager, Food Service Advisor/Officer, or the Contracting Officer. Delivery vehicles may be required to stop at a central location for inspection before proceeding to the assigned delivery point(s). In addition, the delivery vehicles will be inspected for cleanliness and condition. Supplies transported in vehicles that are unsanitary, or which are not equipped to maintain prescribed temperatures, may be rejected without further inspection. Failure to identify latent defects or similar issues at time of acceptance will not absolve the Contractor of its liability or preclude the customer from obtaining appropriate remedy upon the timely discover of said defects or issues after-the-fact. In this circumstance, the customer shall notify the Customer Representative who will coordinate with the Contracting Officer in seeking an appropriate resolution.

B. The authorized Government receiving official at each delivery point is responsible for inspecting and accepting products as they are delivered. The delivery ticket shall not be signed prior to the inspection of each product. All overages/shortages/returns are to be noted on the delivery ticket by the receiving official and truck driver. The authorized Government receiving official’s signature and printed name on the delivery ticket is required for acceptance of the product. All signatures MUST be legible along with a printed name and title block.