USDA-FNS-SNAP-21-PAFFM Request for Applications.pdf

SNAP Online Purchasing Participation Assistance for Farmers and Farmers’ Markets – Request for

Applications

Catalog for Federal Domestic Assistance Number (CFDA): 10.545

Dates:

Release Date: June 23, 2021

Application Due Date: 11:59 PM, Eastern Standard Time (EST), August 23, 2021

Anticipated Award Date: September 15, 2021

OMB BURDEN STATEMENT: According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0584-0512. The time required to complete this information collection is estimated to average 100 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Application Checklist This application checklist provides a list of the required documents; however FNS expects that applicants will read the entire RFA prior to the submission of their application.

In order to apply, at least four weeks prior to submission, you must have:

Obtained a Dun and Bradstreet Data Universal Numbering System (DUNS) number;

Registered the DUNS number into the System for Award Management (SAM); and, Registered in grants.gov.

When preparing your application, ensure:

Your application format and narrative meet the requirements included in Section IV “Application and Submission

Information,” including page limits and priorities outlined in Section IV, and all necessary attachments.

When preparing your budget, ensure the following information is included:

All key staff who are paid by this grant.

The percentage of time the project director will devote to the project in full-time equivalents.

Your organization’s fringe benefit amount along with the basis for the computation.

The type of fringe benefits to be covered with Federal funds.

Itemized travel expenses (including type of travel), travel justifications and basis for lodging estimates.

Types of equipment and supplies, justifications, and estimates, ensuring that the budget is in line with the project description.

Information for all contracts and justification for any sole-source contracts.

Justification, description and itemized list of all consultant services.

Indirect cost information (either a copy of a Negotiated Indirect Cost Rate Agreement (NICRA) or if no agreement exists, the basis of the indirect costs requested). If none requested, please indicate this in the budget narrative.

When submitting your application, ensure you have submitted the following:

SF-424 – Application for Federal Assistance (fillable PDF in Grants.gov)

SF-424A – Budget Information and Instruction Form (fillable PDF in Grants.gov)

SF-424B – Assurances for Non-Construction Programs (fillable PDF in Grants.gov)

SF-LLL – Disclosure of Lobbying Activities.

FNS-906 – Grant Program Accounting System & Financial Capability Questionnaire (in Appendix X)

Negotiated Indirect Cost Rate Agreement (PDF – Upload using the “Add Attachments” button under SF-424 item

#15)

When applicable, application packages are required to include the following documents:

AD-1047 - Certification Regarding Debarment, Suspension, and Other Responsibility Matters Primary Covered

Transactions

AD-1048 - Certification Regarding Department, Suspension, Ineligibility and Voluntary Exclusion Lower Tier

Covered Transactions

AD-1049 - Certification Regarding Drug-Free Workplace Requirements (Grants) Alternative I – For Grantees Other

Than Individuals

AD-3030 – Representations Regarding Felony Conviction and Tax Delinquent Status for Corporate Applicants

(fillable PDF in Grants.gov).

http://www.grants.gov/web/grants/forms.html http://www.grants.gov/web/grants/forms.html https://apply07.grants.gov/apply/forms/sample/SFLLL_1_2-V1.2.pdf

TABLE OF CONTENTS

PAGE

I. PROGRAM DESCRIPTION

A. Authorizing Legislation and Background

B. Purpose / Key Objectives

C. Operational System Requirements

1.0 Components

1.1 Desktop Browser, Mobile App and Backend

1.2 PIN-Solution Provider

2.0 Transaction Types

2.1 Online PIN Purchase

2.2 EBT PINless Refund

2.3 Transaction Types – Unsupported by the Solution

3.0 Purchase Checkout Process for SNAP and Cash EBT

3.1 Order Destination and Timing

3.2 Identification of SNAP-Eligible Items

3.3 Ability to Accept Split Tender

3.4 Storage and Selection of Payment Type

3.5 Service, Container and Other Fees

3.6 Calculation of SNAP Payment

3.7 Authorization of SNAP Purchase Transaction

3.8 Calculation and Authorization of Cash Assistance EBT

3.9 Error Response Codes and Message Handling

4.0 Receipts

4.1 Receipts – Transaction is Approved

4.2 Receipts – Order is Processed

4.3 Receipts – Refunds After Order is Fulfilled

5.0 Processing Orders

6.0 Other Provisions

6.1 Equal Treatment

6.2 Security and Privacy

7.0 Waivers and Conditions

7.1 PINless Refund

7.2 PIN-Entry Method

7.3 Printed Receipt

7.4 Product Display

7.5 Prepayment

7.6 Card Must Be Present

7.7 Equal Treatment

II. FEDERAL AWARD INFORMATION

A. Type of Award

B. Application and Review Dates

C. Award Period

D. Type of Award

E. Allowable Costs

F. Unallowable Costs

III. ELIGIBILITY INFORMATION

A. Eligible applicants

B. Cost sharing or matching considerations

C. Pre-application Screening Requirements

D. Other eligibility criteria

IV. APPLICATION AND SUBMISSION INFORMATION

A. Application Format

B. Application Content

C. Submission Date

D. Electronic Submission Details

F. Application Deadline and Proof of Timely Submission

V. APPLICATION REVIEW INFORMATION

A. Evaluation Factors and Criteria

B. Review and Selection Process

C. Determination of Award Amounts

VI. FEDERAL AWARD ADMINISTRATION INFORMATION (REQUIRED)

A. Federal Award Notice

B. Administrative and National Policy Requirements

C. Reporting

FINANCIAL REPORTING

PROGRESS REPORTING

VII. FEDERAL AWARDING AGENCY CONTACTS

VIII. OTHER INFORMATION

A. Debriefing Requests

IX. Appendix

A. Operational System (The Solution) Requirements

B. RFA Budget Narrative Checklist

C. Purpose

D. Organization Information

I. PROGRAM DESCRIPTION

A. Authorizing Legislation and Background

Authorized by the Food and Nutrition Act of 2008, as amended, the Supplemental Nutrition

Assistance Program (SNAP) is the cornerstone of the Nation’s nutrition assistance safety net. The

United States Department of Agriculture (USDA) Food and Nutrition Service (FNS) authorizes and monitors retailers to participate in SNAP. Currently, more than 250,000 retailers are authorized to accept SNAP. Thousands of retailers, including farmers’ markets and direct marketing farmers, apply for SNAP authorization each year. Direct marketing farmers (DMFs) are agricultural producers of staple foods (grains, meats, dairy, or produce) who sell the food items they produce directly to consumers at farmers’ markets, roadside stands, or at pick-your-own operations. Farmers’ markets

(FMs) are physical locations at which three or more direct marketing farmers gather to sell primarily the agricultural products they produce.

Since 2012, funding has been appropriated to FNS to support the participation of FMs and DMFs in their efforts to attract more SNAP customers and to help individual FMs and DMFs that meet specific requirements, to procure low- or no-cost wireless Electronic Benefit Transfer (EBT) point-of-sale

(POS) devices through the SNAP EBT Equipment Program.

Section 703 of the Consolidated Appropriations Act, 2021 directs FNS to enter into cooperative agreement(s) with up to five non-profit organizations (eligible entities) to build out functionality, and provide assistance to DMFs and FMs to accept SNAP benefits through online transactions.

In developing this RFA, FNS hosted a listening session and facilitated follow-up discussions to solicit input from the farmers’ market and farming communities. More than 70 individuals, representing more than 30 organizations, participated in the listening session.

B. Purpose / Key Objectives

FNS announces, through this Request for Applications, the availability of a maximum of $4 million in total grant funding to be used over a maximum of four (4) years for award as up to five cooperative agreements. This solicitation is contingent upon the availability of funds.

The primary goal of the grant is to provide greater participant access to SNAP-authorized FMs and

DMFs by providing assistance to FMs and DMFs that wish to accept SNAP benefits through online transactions. The grantee will use resources from this grant to assist FMs and DMFs in becoming

SNAP authorized Internet Retailers and supporting the participation of and processing of online transactions by these FMs and DMFs, including the following activities:

1. Objective 1: Assistance to SNAP-authorized FMs and DMFs in becoming authorized to participate as Internet Retailers (IRs) – this is a second authorization which is specific to the transactions conducted by the FM/DMF online.

The grantee will assist these FMs/DMFs:

a. In completing the letter of intent process to become an authorized IR to conduct online

SNAP transactions; and

b. By facilitating their understanding of the steps involved in becoming an IR and maintaining their presence on the eCommerce Platform (Solution), e.g., inventory and price data uploads, long term contracting and cost.

2. Objective 2: Coordinate with other FNS grantees and contracts to maximize the efficient use of funding and resources in assisting FMs/DMFs in their participation in SNAP. This coordination would include:

a. Working with the Participation Assistance for Farmers and Markets, Mobile Application

Grantee (NAFMNP and MarketLink), which provides access to a SNAP Mobile

Application (The App) by FMs/DMFs free of cost, for one-year. The App, provided through the MarketLink program, enables DMFs/FMs to accept SNAP EBT payments on their own smart device;

b. Working with the SNAP Retailer Service Center (RSC) and the Retailer Operations Branch

(ROB) to ensure that the grantee provides clear, current and accurate information to

FMs/DMFs regarding SNAP requirements and applying to be authorized to accept SNAP benefits; and

c. Participating in meetings with the FNS Online Purchasing Pilot (OPP) Team when deemed necessary by FNS to ensure efficient coordination.

3. Objective 3: Development of an eCommerce Platform (the “Solution”) for use by FMs/DMFs and SNAP customers to conduct SNAP online transactions.

Successful grant applicants will identify the Solution that will be used and describe how each requirement in Section A. Program Description, Operational System Requirements and Section

I. Appendix will be satisfied. The proposed activities and indicators measuring success must be mapped to Program Objectives.

Note: Indicators are defined as any metric you anticipate will be able to be tracked during the period of performance of the grant.

The grantee may develop the Solution or enter into a formal agreement with the Solution provider to provide access to the Solution by FMs/DMFs that have become authorized to accept SNAP benefits in online transactions. Access will be provided to the Solution at no cost to the FM/DMF for up to three-years. The Solution provider must meet requirements as specified in Section A. Program Description, Operational System Requirements and Section I.

Appendix. The formal agreement between the grantee and Solution provider will specify all costs and terms for the participation of an FM or DMF receiving access to the Solution for up to three-years at no cost, and on-going access subsequent to the no-cost period.

Although FNS anticipates applications that would require enhancement of an existing eCommerce Platform to enable the processing of SNAP EBT Transactions, this grant opportunity is not intended to support the development of an a new, untested eCommerce

Platform (Solution). However, applications that propose the development of a new Solution for

SNAP online transactions will be considered. The grantee may also collaborate or coordinate with a Solution provider to develop additional functionality for an existing Solution that would enable the processing of transactions for other Federal nutrition programs.

https://www.fns.usda.gov/snap/RSC https://www.fns.usda.gov/snap/online-purchasing-pilot

FMs/DMFs will provide their own labor and other resources, e.g, providing Internet access to their staff and volunteers to access the Solution for inventory management, and the processing and fulfillment of online orders of SNAP-eligible items. Under the grant, the cost of the

Solution and any related fees for the Solution will be covered for participating FMs and DMFs for up to 3 (three) years from the date of sign-up by the FM or DMF as a participant under the grant.

As part of the application, the applicant must address whether the costs for the PIN solution, and other TPP services, which are normally the responsibility of each retailer, e.g., FM/DMF, will be included as part of the grant as described in Section 1.2 PIN-Solution Provider.

4. Objective 4: Training and technical support for FMs/DMFs in applying for SNAP authorization as an Internet Retailer and on-going participation in SNAP. The grantee will:

a. Train FMs/DMFs in accessing (or installing, if applicable) and using the Solution, including instruction on the options that are provided to the FM/DMF in optimizing the

Solution for its own use;

b. Communicate with FMs/DMFs that are using the Solution to ensure that they are aware of any maintenance issues, planned outages, updates to the functionality of the Solution, security issues and other software development and administration issues that may arise;

c. Troubleshoot issues, and provide technical assistance through the term of the no-cost agreement;

d. Guide FMs/DMFs in locating SNAP training materials and information, and facilitating questions and resolutions with FNS; and

e. Conduct testing of the grantee’s proposed solution and each instance of the Solution as part of the Internet Retailer authorization process as additional FMs/DMFs are on-boarded for

SNAP online transactions to ensure all requirements are met.

Once the no-cost option expires, the grantee will assist FMs/DMFs in transitioning their agreement from no-cost to full-cost, or will provide information regarding alternate solutions should the FM or DMF wish to transition to an alternate solutions.

5. Objective 5: Monitoring progress, including achievements, milestones, and risks and issues.

a. Among other metrics, the grantee will monitor and track the success of support activities and training, the number of participating FMs and DMFs using the Solution, and various metrics.

C. Operational System Requirements

This section provides an overview of requirements related to SNAP transactions and describes the

EBT-specific functionality that the eCommerce Platform (referred to as the “Solution”) must provide.

1.0 Components

1.1 Desktop Browser, Mobile App and Backend

The solution must include:

• a browser-based component that enables customers to place orders, and complete other tasks as identified in Section A. Program Description, Operational System Requirements and Section I.

Appendix;

• a mobile app-based component that enables customers to place orders, and complete other tasks as identified in Section A. Program Description, Operational System Requirements and

Section I. Appendix; and

• a backend, that enables FMs and DMFs to enter and manage inventory, including quantity and pricing; select from options as identified in Section A. Program Description, Operational

System Requirements and Section I. Appendix to optimize use of the Solution for their business model; and receive, process, and track orders from the time that they are placed by a customer until the order is fulfilled.

1.2 PIN-Solution Provider

Additionally, the grantee must select and certify with a PIN-Solution Provider to integrate the PIN pad used for the eCommerce Platform (Solution) for processing SNAP EBT transactions online. Unlike commercial credit and debit, signature-based transactions are not allowed with EBT. The PIN is the only form of identification that is used by an EBT customer.

All purchase or other debits to the customer account must be accompanied by a securely entered PIN.

As of May 15, 2021, FISERV PaySecure™ and FIS WorldPay (PIN-Solution Providers) are the only certified Third Party Processors (TPPs) that provide secure encrypted PIN-entry services for SNAP

Online Purchasing. The grantee may contract with either of these PIN-Solution Providers (or any other certified TPP that provides secure encrypted PIN-entry services for SNAP Online Purchasing on, or before, the Application Due Date of this RFA) to integrate the secure PIN entry method with the eCommerce Platform (Solution) to route online EBT transactions to the EBT Host processors for approval. FMs/DMFs must also contract with the same secure PIN-entry provider, since the TPPs are also responsible for settling funds for all online EBT transactions to the FM/DMF. The PIN-Solution

Provider is also responsible for:

a. Working with Solution through the certification process

b. Verifying that the Solution is PCI-compliant

c. Contracting with each retailer for secure PIN-entry services for all online SNAP and cash EBT transactions

d. Securely collect and process PIN data and DES encrypt results

e. Converting data submitted by website and encrypted PIN to EBT processor’s specified format

f. Validating completeness of data prior to transmission

g. Routing transactions to EBT processor for authorization

h. Receiving message responses and transmitting them back to the website

i. Participating in the testing process for EBT functionality for each retailer.

j. Settling funds for all online EBT transactions to the retailer

k. Providing daily and monthly transaction and settlement reports to the retailer, and

l. Providing other contracted services negotiated with the retailers

The solution must meet the same conditions for Cash Assistance EBT account debits in States that have Cash Assistance on the card and also allow it to be used online.

As part of the application, the applicant must address how the costs for the PIN solution, and other

TPP services, will be paid. For example, the applicant would indicate whether it intends to reach an agreement with a PIN-Solution Provider through which the applicant (grantee) would pay the costs per transaction processing and settlement for FMs/DMFs that participate as IRs under this grant, or if the applicant would expect each individual FM/DMF to reach an agreement with the PIN-Solution

Provider for these costs. If the applicant proposes to use grant funds to pay for these costs, FNS may limit the use of grant funds to pay for these costs contingent on the availability of funds, the numbers of FMs/DMFs participating under this grant, and other factors.

2.0 Transaction Types

2.1 Online PIN Purchase

The solution must meet the same conditions for Cash Assistance EBT account debits in States who have Cash Assistance on the card and also allow it to be used online.

EBT PINs must not be stored for future use in subsequent transactions, within the solution or in any other system, maintained by the grantee, farmer or market. The PIN must always be captured and immediately encrypted by a PIN-Solution Provider for each payment transaction. The PIN-Solution

Providers do not store the PIN after the transaction response is received. The PIN-Solution Providers and EBT processors do not support preauthorization as done in the credit/signature debit environment.

As a result, the solution must perform SNAP and Cash Assistance EBT transactions in real time, at the time of online PIN entry, with immediate debit of funds from the cardholder’s account and settlement to the FM/DMFs within two business days.

For this reason, EBT also cannot, and the solution must not, support the use of standing orders (a one-time order for specific products to be delivered at a regular interval, such as monthly) for payment with SNAP or Cash Assistance EBT.

2.1.1 Weighed Items

Many FMs/DMFs sell items by weight, e.g., produce, meats, and fish. For online purchases, purchase amounts for weighed items must be estimated; the exact weight of items could be less or more once an order is fulfilled.

The solution must be able to support the ordering of weighed items by allowing an FM/DMF to pad the amount initially debited from the customer’s EBT account typically by up to 10% of the calculated purchase amount of weighed items at the time that an order is made by the customer. The solution must then support a subsequent (PINless) refund for any amount overcharged, after the final weight of the item is determined.

For example, if the total EBT order comes to $50, of which $15 is calculated for weighed meat and produce, the solution must be able to “pad” the debited amount by up to $1.50, or 10% of $15, and initially charge the customer up to $51.50. Padding must be clearly explained onscreen to the customer before the transaction is submitted for authorization.

Once the order is fulfilled, if the final purchase amount is less than the amount originally debited from the customer, the solution must provide an immediate refund of the difference back to the cardholder’s

EBT account.

In this example, if the weighed items resulted in a purchase amount of $15.25, the solution would provide a refund of $1.25. If the final calculated amount is more than the amount initially debited, then the retailer is liable for the difference. The solution must not charge the EBT customer for any additional amount.

2.1.2 Substituted Items

There may be instances when an item is not available at the time the order is processed/fulfilled. In these situations, the solution must provide functionality to allow FMs/DMFs to offer substitutions for similar items, which could cost more or less, or remove the item and its purchase amount from the order. The solution must also enable a customer to agree to or decline substations on an item-by-item basis.

2.1.3 Denial for Insufficient Funds

If a transaction is denied for insufficient funds, the return message will include current account balances for both the SNAP and Cash Assistance EBT accounts. The solution must provide this information onscreen to the customer so that the customer can opt to perform a transaction for a lesser purchase amount or select a different payment type.

2.2 EBT PINless Refund

This is a new EBT transaction type developed specifically for online purchasing. The solution must allow for use of the EBT PINless refund process for both SNAP and Cash Assistance. In almost all cases, refunds will be performed when the customer is offline; it will not be possible to capture the cardholder’s PIN.

This transaction type will be used for all instances where funds are due back to a customer. For example, it may be used for refunds related to overestimated purchase amounts, and out of stock or returned items. The solution must enable an FM/DMF to enter the information needed for an EBT

PINless refund transaction.

The full amount of any returned food item purchased with SNAP must be credited back to the customer’s SNAP account. Any shipping charges due for SNAP returns must be paid through an alternate payment type. The solution must not allow shipping charges to be deducted from amounts refunded for items purchased with SNAP. Refunds for items purchased with Cash Assistance are not subject to these restrictions.

2.2.1 Refund Process – PIN-Solution Provider

All PINless refunds must flow through a PIN-Solution Provider, e.g., Fiserv PaySecure™ or

WorldPay, and comply with their specifications. These transactions must contain the authorization number of the original approval so that refunds can be accurately traced.

2.2.2 Refund Process – Manually Entered

Refunds may result from customer emails or phone calls, or from the return of purchased items. In these situations, FMs/DMFs will need to securely enter refund requests manually. The solution must enable an FM/DMF to manually enter a refund. The solution must subsequently provide a transaction message that meets the specifications of the PIN-Solution Provider.

2.2.3 PINless Voids

EBT processors cannot accept PINless voids. For brick and mortar stores, these are necessary when a clerk miskeys the purchase amount; this need does not exist online. Voids are not a mandatory transaction type for online purchasing. The solution must perform a PINless refund when a sale has been processed, but must be cancelled.

2.2.4 Refund Notification

When a refund is issued, the solution must provide a notification to customers, which is a record of the transaction and provides updated account balance(s).

2.2.5 Reversals and Adjustments

The solution must handle reversals and adjustments according to the specifications of the PIN-

Solution Provider. PINs are not required in reversal messages.

2.3 Transaction Types – Unsupported by the Solution

The following transaction types will not be conducted using the solution:

• SNAP Manual Voucher Authorization (signature based);

• SNAP Manual Voucher Clear;

• PIN Purchase with Cash Back;

• PIN Cash Only Withdrawal (cash received without purchase); and

• Store and Forward.

Any currently authorized FNS retailer may continue to do these types of transactions using their primary FNS authorization number(s).

3.0 Purchase Checkout Process for SNAP and Cash EBT

This section identifies EBT specific issues that must be considered and addressed once the customer has filled the “cart” or “basket” and is ready to complete a purchase.

3.1 Order Destination and Timing

FMs/DMFs can fulfill an order by:

1. Enabling the customer to pick up the order;

2. Delivering the order to the customer (within an area defined by the FM/DMF); or

3. Shipping the order to the customer via USPS or a commercial carrier.

The solution must capture a complete address ––street address; unit/suite, as appropriate; city; state;

and zip code–– for each SNAP transaction regardless of whether the order is picked up, delivered or shipped.

The solution must allow the customer to specify the date and time that they would like to have their order delivered or ready for pickup. In most situations, this date and time must be within seven days of the transaction. Farmers and markets operating under a Community Supported Agriculture (CSA) model may accept SNAP benefits up to 14 days in advance of delivery or shipment to or pickup by the customer. FMs/DMFs may designate a very limited timeframe that will be available for delivery or pickup in a given area. The same options for selecting destination, method and timing must be offered to all customers.

3.1.1 Customer-Selected Options

When the customer creates an order, a fulfillment address must be provided. At a minimum, the solution must capture:

• Address Line 1 (street number and name; direction, e.g., North; street type, e.g., Street, Lane)

• Address Line 2 (apartment/unit/suite number)

• City, State and ZIP

The Address Line 1 and the ZIP code entered by the customer (or selected from their stored addresses) must be included in the transaction message submitted to the PIN-Solution Provider.

The solution must also provide the functionality that would enable a customer to select dates and times for local delivery and dates and times for pickup, based on the options provided by the FM/DMF.

3.1.2 Retailer-Designated Options

An FM/DMF can decide to offer:

• order pickup from a single location;

• order pickup from more than one location;

• order delivery within a specific geographical area;

• order shipping within a specific geographical area; or

• a combination of these options.

The solution must also provide the functionality that would enable an FM/DMF to identify dates and times for local delivery and dates and times for pick up. If the FM/DMF requires all customers to pick up their orders from one location, the address and ZIP code of that location will be the EBT delivery address for all EBT transactions submitted to the PIN-Solution Provider.

If the customer chooses from a menu or list of store locations or other distribution points, or the

FM/DMF assigns a location from such a list, the address and ZIP code for that pickup location must be included in the transaction message submitted to the PIN-Solution Provider.

In addition, FNS will require the FM/DMF to provide a record of the full pickup site address to the customer (See Section 4.0 Receipts). Therefore, the location menu must be associated with a system table that also includes the complete street address and ZIP code of each location.

3.1.3 Split Orders

Some online merchants, particularly those that use commercial shipping or have multiple warehouses, allow customers to designate that different items from a single order be delivered to different addresses. Since every SNAP transaction must be associated with a fulfillment location, the entire

SNAP order must be delivered/shipped to, or picked up from, the same address. The solution will not support split orders. The solution must limit a customer to entering (or selecting) one address for an order.

NOTE: If a customer wants items to be fulfilled at different locations, the customer must create a separate order for each location. PIN-entry would be required for each SNAP transaction.

3.2 Identification of SNAP-Eligible Items

SNAP benefits can only be used to purchase:

• Foods for the household to eat, such as:

o breads and cereals;

o fruits and vegetables;

o meats, fish and poultry;

o dairy products;

o accessory foods, such as coffee; tea; cocoa; soda; non-carbonated beverages such as sports drinks, punches, and flavored waters; candy; condiments and spices;

o Seeds and plants which produce food for the household to eat; and o State-mandated container deposits for eligible products (because the products cannot be sold without the containers); any deposit amount beyond that required by the State, such as a manufacturer or retailer-imposed bottle deposit, may not be paid with SNAP benefits

• SNAP benefits cannot be used to purchase:

o Alcohol or tobacco products;

o Any nonfood items, such as:

pet foods;

soaps, paper products, and household supplies;

vitamins and medicines; and any product sold with a “Supplement Facts” label instead of a “Nutrition Facts” label;

o Food that will be eaten in the store;

o Hot foods; and o Live animals.

o Fees for bags (or other delivery/pickup/shipping containers) whether or not imposed by

State or local law o Fees of any kind, regardless of when they are charged, including those for:

shipping and/or handling delivery processing membership registration

FMs/DMFs may sell items that are not SNAP-eligible. Since there is no human intervention to confirm that items in an order are SNAP-eligible, it is essential that the solution’s product database be able to differentiate between SNAP-eligible and ineligible items automatically.

NOTE: The solution must also provide functionality to enable the purchase of hunting and fishing equipment by certain Alaskan natives.

3.3 Ability to Accept Split Tender

SNAP customers may need to use a separate payment type for a transaction, e.g., for ineligible items or fees. The solution must accommodate split tender–– the use of more than one payment type for a single order. SNAP customers must also be allowed to choose the amount of SNAP benefits that they will use for each purchase, and pay for some or all SNAP-eligible products with a different type.

Acceptable payment types include SNAP, Cash Assistance, and commercial debit/credit.

The solution must also provide functionality that enables an FM/DMF to:

1. Waive all fees for SNAP customers (see Section 7.7, Equal Treatment); and

2. Allow a customer to pay cash for necessary fees at the time of delivery or pickup.

3.4 Storage and Selection of Payment Type

The solution must enable a customer to store and select the following payment types for orders:

• SNAP EBT (the solution can only store one SNAP EBT card, but it can be the same card number that is used for Cash Assistance);

• Cash Assistance EBT (the solution can only store one Cash Assistance card, but it can be the same card number that is used for SNAP EBT);

• Debit (the solution must enable a customer to store a Debit card); and

• Credit (the solution must enable a customer to store a Credit card).

The solution must be able to accept and validate card numbers between 16 and 19 digits. The length of the card number varies by State and the FM/DMF may want to validate the correct length after entry.

EBT cards do not have expiration dates or CVVs. The solution must not include these values in the card entry screen; SNAP customers may be confused about how to respond if prompted for these values.

3.5 Service, Container and Other Fees

The solution must provide functionality for an FM/DMF to charge for:

• container deposits,

• bags;

• convenience and handling fees; and

• other delivery, pickup, and shipping containers.

The solution must provide functionality to enable an FM/DMF to charge for the reimbursable amounts and container product types specified by State law and to allow a SNAP customer to pay these charges using SNAP benefits.

However, the solution must not allow SNAP benefits to be used to pay for:

• any other food/beverage container deposit that is imposed by a manufacturer or FM/DMF, but not deemed reimbursable under State law; or

• delivery/pickup/shipping, ordering, convenience, handling or other fees.

Additionally, SNAP law requires that clear notification of any delivery, ordering, convenience, or other fees that are associated with a food purchase be made to SNAP customers at the time an order is placed; these fees/charges cannot be paid with SNAP benefits. If an FM/DMF charges such fees, the solution must display a notice as soon as the customer selects SNAP EBT as the payment method. The customer must also be given the opportunity to terminate the purchase or select a different payment type before the purchase is finalized.

3.6 Calculation of SNAP Payment

If a SNAP customer selects SNAP EBT as the payment type, the solution must limit the total of that transaction to the subtotal of all SNAP-eligible items. The value requested for authorization must not exceed that subtotal. However, the solution must enable a SNAP customer to enter a lower value, at their discretion, of SNAP benefits to apply to the order.

The customer may be allowed to enter a specific (lower) value, or be prompted to delete or move one or more items from the SNAP subtotal, thereby reducing the subtotal to the value identified by the customer.

See Section 6.1.1, Sales Taxes for further information on sales tax calculation.

3.7 Authorization of SNAP Purchase Transaction

The solution must provide the functionality that enables a customer to conduct a balance inquiry prior to a SNAP transaction.

When the SNAP purchase amount has been determined and the solution is ready to request authorization for the purchase, the transaction must be passed to the PIN-Solution Provider for PIN-entry using their message specifications.

The approval or denial response will come back to the solution from the PIN-Solution Provider. If approved, the solution would automatically require the customer to designate another payment type for the balance of the total sale including fees, if applicable.

If the customer is unable to find a payment type with sufficient funds to cover the balance, and the solution needs to cancel the original SNAP transaction, it would submit a forced reversal of the SNAP transaction through the PIN-Solution Provider.

3.8 Calculation and Authorization of Cash Assistance EBT

Cash Assistance EBT transactions are not restricted. Cash Assistance linked to the EBT card may be used for fees and virtually any SNAP-eligible or SNAP-ineligible item that is made available in the solution by an FM/DMF. These must also be passed to the PIN-Solution Provider for PIN-entry using their message specification. The response and reversal procedures are similar to SNAP.

3.9 Error Response Codes and Message Handling

If a transaction is denied, the PIN-Solution Provider will provide a response code (see Appendix I.

Operational System (The Solution) Requirements – Requirement 21, Transaction Error Response

Codes and Message Handling). The solution must immediately provide the EBT customer with an onscreen explanation of the denial reason to enable correction. If the denial is based on insufficient funds, the solution must also display the remaining SNAP and Cash Assistance EBT account balances that the PIN-Solution Provider returns with the denial message.

The solution should then prompt the customer to complete a new transaction for an amount up to the remaining SNAP and Cash Assistance EBT account balances. A new transaction will require reentry of the PIN.

4.0 Receipts

Federal regulations prohibit the onscreen display of balance information except for balance-only inquiry terminals. They also require a printed paper receipt to be provided at the time of the SNAP transaction. FNS will provide a waiver to all FMs/DMFs that use the solution, allowing onscreen display of certain information as described in this section in lieu of a printed receipt.

4.1 Receipts – Transaction is Approved

After a transaction has been approved, the solution must provide an itemized receipt that is displayed onscreen to the customer; the solution must enable the customer to print the receipt at the customer’s discretion. The receipt must also be emailed to the customer within two hours and stored online in the customer’s account.

This receipt provided by the solution must include, at a minimum:

• Company name;

• Contact information, including website URL, physical address, phone number and email for the FM/DMF;

• Date and time of transaction;

• Transaction type;

• Truncated account number (last four digits);

• Transaction amount;

• Payment type(s), and associated amount(s);

• Item quantities and prices;

• Indication of whether each individual item is SNAP-eligible or taxable;

• Indication of the items for which the customer has agreed to substitution, as needed;

• Indication of whether each individual item is weighed to determine purchase amount;

• Padding of weighed items;

• Remaining SNAP Balance;

• Remaining Cash Assistance Balance;

• Delivery/pickup/shipping address;

• Actual or estimated delivery/pickup/shipping date

• Actual or estimated delivery/pickup time, as applicable

• Itemized fees for delivery/pickup/shipping, ordering, convenience, handling and other fees or charges

• Itemized fees for bags or other delivery/pickup/shipping containers

4.2 Receipts – Order is Processed

After an order has been processed, the solution must email a final, itemized receipt to the customer and store the receipt in the customer’s account.

This receipt provided by the solution must include the components described in Section 4.1 Receipts –

Transaction is Approved, and:

• Identification of unavailable items;

• Final weights of weighed items;

• Refunds of padded amounts, as applicable; and

• Whether an item was substituted and indication of the item that it replaces.

4.3 Receipts – Refunds After Order is Fulfilled

After an order has been fulfilled (received by the customer), the customer may seek to return an item or request replacement of the item. If an item is returned, the solution should provide a receipt that meets the receipt requirements previously described in this section.

5.0 Processing Orders

The solution must enable the FM/DMF to enter and manage inventory, including quantity and pricing;

select from options as identified in Section A. Program Description, Operational System Requirements and Section I. Appendix to optimize use of the Solution for their business model; and receive, process, and track orders from the time that they are placed by a customer until the order is fulfilled, including making substitutions at an equal or lesser purchase amount (which would require a refund); post order modifications such as the removal of an item by a customer after payment, but prior to fulfillment

(which would also require a refund); and refunds related to weighed items.

6.0 Other Provisions

6.1 Equal Treatment

SNAP customers must be treated according to the same policies established for all other customers of an FM/DMF, especially in the area of privacy, use of customer data, item returns and refunds, non-delivery, remedies for spoilage and other customer complaints. SNAP customers are subject to all of the same fees as other customers, but cannot use their SNAP benefits to pay these fees. One exception is that tax shall not be charged on eligible foods purchased with SNAP benefits. These requirements are stipulated in 7 CFR 274.7(f) and 278.2(b).

The solution must provide the functionality to enable an FM/DMF to display a library or menu of its customer-related policies.

6.1.1 Sales Taxes

State sales tax is specifically exempted by law for all items purchased with SNAP benefits. Many

States do not tax food items. Some States tax certain types of items, such as soft drinks and snack foods. Other States tax all food items.

The solution must provide the functionality to enable each FM/DMF to identify:

• SNAP-eligible items and exclude those items from sales tax if purchased using SNAP benefits;

• SNAP-eligible items and allow those items to be taxed according to State or local law if SNAP benefits are not used to purchase the items; and

• SNAP-ineligible items and allow those items to be taxed according to State or local law.

For example, if all food is taxable in a certain State, the cart contains $100 in SNAP-eligible items, and the customer only has $60 remaining in their SNAP account and applies that to the order, then that

$60 portion paid with SNAP benefits is not taxable. However, the remaining items with a purchase amount of $40 portion would be taxable if paid using a commercial debit card is taxable.

If this transaction occurred in a State where certain food items were taxable, then the solution would apply the customer’s available SNAP benefits to any SNAP-eligible items first, ensuring that those items were not taxed. In this situation, tax would only be applied if the total purchase amount of all food items exceeded the customer’s available balance of SNAP benefits. If $20 of the SNAP-eligible items were taxable, those items would be considered paid by the $60 the SNAP payment and no tax would be charged for food. However, if $70 of SNAP-eligible items were taxable, the solution would apply tax to the $10 in SNAP-eligible items because that customer would not have had SNAP benefits available to purchase that portion of the order, and would need to apply a separate payment type.

However, New Jersey tax regulation is an exception to this scenario In New Jersey, if a customer uses

SNAP benefits to purchase any SNAP-eligible items in an order, then all SNAP-eligible items are non-taxable. The solution must enable FMs/DMFs to comply with such taxable and non-taxable situations. As part of its proposed solution, an applicant may decide to partner with an established tax calculation service provider. This will have an impact on how the applicant addresses the requirements of Section 2.4.2.7, Calculation of SNAP Payment.

6.1.2 Double Up Bucks and Similar Incentives

Since the EBT system is capable of applying credit to a customer’s SNAP account, all incentive transactions involving a discount must be credited to the SNAP account or netted out of the sale before debiting the SNAP account.

The solution must be able to calculate a credit to the SNAP account or net the value of the discount out of the sale before debiting the SNAP account.

6.2 Security and Privacy

The chosen solution must be secure, have adequate measures to prevent fraud, comply with credit/debit card industry security standards and protect their customers’ privacy.

6.2.1 PCI Certification

The solution must comply with the PCI Data Security Standard. Before a merchant can be authorized to accept MasterCard or VISA, they must be certified as PCI-compliant by their acquiring institution.

This certification is performed annually and covers a wide spectrum of security and privacy issues.

The solution must be PCI-certified and that certification must be maintained for the life of the grant.

To be approved for this grant, the solution must be able to accept, at a minimum, MasterCard and

VISA within 45 days of grant award. A PIN-Solution Provider will verify that the certification is valid and up to date.

PCI addresses the secure encryption and handling of sensitive data, such as card numbers and PINs while “at rest”, i.e., being temporarily or permanently stored. Compliance is not determined based on specific mandatory requirements. The actual methods and protocols employed by any given organization to achieve compliance will vary and must be continually upgraded and improved.

However, there are many recognized industry “best practices,” which, when used in combination, safeguard sensitive data and customer privacy.

Applicants must identify the best practices that they will employ to achieve PCI compliance. These may include:

• Tokenization;

• Device fingerprinting – comparison of current hardware/software characteristics to user’s previous usage such as physical device, browser version, IP address, app vs. browser, etc.;

• Use of secure sockets layer (SSL) technology or other strong firewall configuration;

• Minimum browser standards – version, 128-bit encryption, etc.;

• Required use of logon IDs and passwords for internal and external access to website;

• Strong policies for ID/password format/content and handling of forgotten IDs/passwords;

• Established user roles restricting update/view of PII and card data based on business need to know;

• Use of sitekeys or other customer/site authentication;

• Use of commercial security/encryption products for both data in transit and at rest;

• Trust seal certification;

• Stringent information security policies for all company and contractor personnel;

• Regular use and update of anti-virus software or programs; and

• Restricted physical access to personal data stored on the system.

6.2.2 Use of Cookies

Some websites use “cookies” to store data on the customer’s personal device, which are related to access and use of the site. Many SNAP customers rely on public computers, e.g., at libraries or schools, for Internet access. To ensure optimum security for online EBT transactions, the solution should not use cookies. However, the applicant can elect to describe the purpose and use of cookies as part of the solution for consideration by FNS. Regardless, no personally-identifiable information (PII) may be recorded by the FM/DMF on any user access devices.

Applicants must identify whether they use cookies, and if so, whether they:

• Retain PII data;

• Can easily delete or allow a customer to avoid creation of cookies.

6.2.3 Security Practices and Policies

As part of the application, the applicant must provide access to the security practices and policies that have been implemented for the browser and the mobile app. These practices and policies must explain to a customer, in easily understood language, the precautions that have been taken to secure customer data and the solution’s liability should there be a breach that results in customer loss. The applicant must also provide best practices and tips for the customer to follow in such areas as password selection and phishing.

FNS further expects the grantee to accept responsibility for any monetary loss or other damage to EBT customers that results from employee or subcontractor fraud, or external hacking resulting from failure to adequately secure the solution and databases under the control of the grantee or any subcontractor.

FNS requires the applicant to agree that, if selected, they will replace all SNAP benefits that are stolen as a result of such breaches.

6.2.4 Privacy Practices and Policies

It is common practice among many businesses and non-profit organizations to sell or share subscription and other data to outside parties. Websites collect a substantial amount of data about demographics and purchasing behavior. Customers’ personal information, e.g., name, address, or email address collected under this grant must not be compromised, sold, rented, or given away free to any third party without authorization from FNS. Websites that do share data at the individual level

(e.g., with a supplier so they can send discount offers directly to a SNAP customer’s email address) must obtain explicit consent from EBT customers to release such information. In other words, the

EBT customer must “opt in” to allow such sharing and not have to “opt out” to prevent the sharing.

The only valid exceptions are for services directly related to the sale, such as third parties performing functions like delivering or shipping the groceries, processing EBT card payments, analyzing aggregate data, and providing customer service. These agents may not use the PII data for other purposes.

Sensitive data such as SNAP EBT card information or credit card information may never be sold, rented or given away free to third parties under any circumstances. All applicants must agree in writing, that the solution will not share any private data with third parties for any current or future application or venture without the explicit consent of the EBT customer.

Internal use of personal information for marketing purposes does not require explicit customer approval, but the customer must have the opportunity to unsubscribe or opt out of receipt of such materials in the future.

FNS expects that each applicant will publish privacy policies with a clearly identified, easy to find link from the home page of the solution. These policies must meet the aforementioned requirements and describe any exceptions for data use or sharing (which might include such reasons as fraud protection and credit risk reduction, purchase of the company and its assets, or compliance with law, e.g., by subpoena). The policies should describe exactly how the solution itself will or will not use information about individual customers, and with whom the data is and is not shared.