Company

LOGO South Texas Coop

Lori Atwood Ramos, MBA, RDPurchasing Coordinator

laramos@esc1.net956.984.6123

America RetanaPurchasing Technician

aretana@esc1.net956.984.6217

Agenda

The Basics of Entitlement

How Can I Use My Entitlement

Processing Commodities

Workgroups

Effective Use of Entitlement

• What is Entitlement?– REAL money for your program

• Your “commodity bank account”– Used towards USDA Foods (TXUNPS surveys)

• Purchased by USDA and donated to schools• USDA fiscal year runs January-December• Supports U.S. agriculture markets and provides

nutritious foods to be used towards feeding programs– Commodity Assistance Rate for SY15

• $0.25

Effective Use of Entitlement

• How Do I Calculate My Entitlement?– Total lunches served and claimed for

reimbursement x the Commodity Assistance Rate of $0.25 (estimated rate)

• How Can I Use My Entitlement?– Allocate (debit) funds towards:

• Annual Surveys (“brown box” commodities)• Farm to School Program• DoD Fresh Program• Processing Surveys

Effective Use of Entitlement

• SY15 Annual Surveys include:• Meats (Survey # 1574)

– Beef, Pork, Poultry, Fish, Eggs• Fruits (Survey # 1575)• Staple Items (Survey # 1576)

– Cheese, Grains, Flour, Pasta, Nuts, Seeds, Oil• Vegetables (Survey # 1577)

Effective Use of Entitlement

• Bonus Surveys:– Does not use entitlement funds (still has $ value)

• Farm to School Program– Produce delivered from a Prime Vendor to State

Warehouse then delivered to schools

• DoD Fresh Program – Purchase fresh produce from approved vendors

• Option to purchase produce off this contract even after all entitlement funds allocated are exhausted

Effective Use of Entitlement

• Processing of USDA Foods (TXUNPS Processing Surveys)– Can make efficient use of raw and/or bulk USDA

Foods by processing them into more convenient, ready to use forms

– Benefits:• More menu options• Can help to increase student participation

– Also increases entitlement• Can help to decrease labor costs

– Minimizes manual labor• Provides a high level of food safety• Most products are CN Labeled

Processing Flow

• Processor Manufacturers that process commodities

• Sampling Food show or taste testing

• RFP Request pricing from manufacturers/distributors

• School Districts Enter Pre-Order in ProcessorLink

• Coops Request truckloads through TDA – TXUNPS

• TDA Orders truckloads through USDA

• USDA Purchases USDA Foods (commodities)

• USDA Foods Sent to processor from USDA

• Processor Makes finished end products

• End Products Delivered to district directly, through warehouse or distributor – depending on chosen value pass through method

• School Districts Manage, track, and verify receipt of end products

Effective Use of Entitlement

• Value Pass Through Methods:– Fee for Service (FFS)

• School district invoiced directly from processor– Case price excludes the USDA donated food value.– Once end product is delivered to school district or state

contracted warehouse the invoice is payable to the processor

• Processor produces end product once truckload is purchased by USDA and received

• Number of deliveries from processor may be limited – Dependent on size of end product order, must meet the

processors minimum delivery requirements as specified in RFP

Effective Use of Entitlement

• Value Pass Through Methods, cont…:– Fee for Service (FFS) through Distributor

• Also known as Modified Fee for Service (MFFS)• Distributor acts as processor’s billing agent and

invoices school district– Case price excludes the USDA donated food value– Case price includes distribution fees– Distributor bills school district at the total case cost under

provision of FD-025 (March 29, 2004)– School district and distributor are required to retain proof of

delivery (invoice)» School district is responsible for verifying receipt of

commodity value and accurate price

Effective Use of Entitlement

• Value Pass Through Methods, cont…:– Indirect Discount

• Also known as Net Off Invoice (NOI)• School district is invoiced by distributor

– Net price + distribution fees» Delivery fee included in commercial bid price» Donated food value deducted on the invoice

• Can eliminate need for storage costs– Just in time deliveries

• Distributor must have a tracking mechanism• School district must commit to the required sales

verification – Confirm receipt and commodity value

Effective Use of Entitlement

• Value Pass Through Methods, cont…:– Rebates

• Can simplify procurement method• School districts must pay the capital layout for the

commodity value upfront and wait to receive refund from processor

• Process:– District purchases products through distributor – Distributor sends velocity reports to processor, broker or

school district– Rebate form is submitted to processor with velocity reports– Processor sends rebate checks to district

FFS vs. NOI

Fee For Service (FFS) Net Off Invoice (NOI)Required end product selections No required end product

selections “bank” of pounds

Products delivered to state Purchased as needed through warehouse or direct to district* distributor

-Minimum delivery requirements -Distributor minimum-1 or 2 deliveries/month -Weekly deliveries -Delivery charges -No delivery charges-Potential storage charge -No storage charge -Requires vendor account -Best commercial price plus set-up with district DF value discounted-Multiple invoices and POs -One vendor/one invoice-Typically best bottom $ -Pay premium for JIT deliveries *MUST consider storage *Additional administrative work to and delivery costs! monitor and verify pounds!

Effective Use of Entitlement

Menu

Nutrition CostCustomers Storage

USDA Foods/Programs

Effective Use of Entitlement

• Determine Usage of USDA Foods– Base on regulations, menus and past

purchases– Estimated number of servings needed to

fulfill your menu requirements for the school year

• Review past production records

• Conduct a Cost Analysis– Resource:

• SNA’s School Nutrition Procurement Toolkit: http://schoolnutrition.org/ResourceCenter.aspx

Step By Step

• What You Need:– Your District’s Menu– CNP-STC Processing Order Guide– CNP-STC Commercial Bid Order Guide– All Applicable Delivery Charges and/or Fees

• CBBC (or other State Contracted Warehouse)• Private Warehouse• Consider District Warehouse & Storage Costs

– Labor– Equipment (trucks)– Fuel– Insurance & Liability

– Commodity Costs

» Evaluate your options …» Determine best value for your program!

Effective Use of Entitlement

• Maximize Your Entitlement:– Allocate (debit) funds based on menus, usage

and available storage:• USDA Foods (Annual & Processing Surveys)• Programs (Farm to School & DoD Fresh)

– Evaluate costs• Include donate food value • Internal & external storage

– Diversify entitlement allocations– Never “sit” on uncommitted entitlement– Request Bonus items when available

• Assuming you can use them.

Effective Use of Entitlement

• Common Pitfalls:– Not taking time to evaluate your school districts menu

and usage needs – Thinking of USDA Foods (commodities) as “free”– Incurring storage fees– Not utilizing all the available program options– Committing to process items you have not served/tested

with your students– Processing items that are not menued throughout the

school year and/or changing menu– Inadequately managing, tracking, and/or verifying

receipt of further processed items

Effective Use of Entitlement

• How to manage, track and verify processed commodities– Use the following resources:

• K12 Foodservice – http://www.k12foodservice.com/

• ProcessorLink– https://www.processorlink.com/

• Labatt Foodservice– http://www.labattfood.com/

– Must set up an account– No charge– Use throughout the school year– School district’s responsibility

Checklist

• #1: Do you and/or any of your staff need to submit FND 101 Certificate of Authority?– Access on TDA Squaremeals website:

http://www.squaremeals.org/Programs/FoodDistributionProgram/FDPAdministrationForms.aspx• TDA FND 101 Form

– Read the instructions– Complete the form– Submit to TDA

Checklist

• #2: Access TXUNPS - FDP Module for SY15– FDP SY15 Packet must be “submitted” before the Annual

Survey can be accessed, answer the following:• Do you wish to participate in Processing?

– Enter estimate entitlement $ amount for processing requests– Once ProcessorLink Pre-order is complete, adjusted amount

to Pre-order entitlement $ amount, PLUS 10%.

• Do you wish to participate in Farm to School?– Leave entitlement $ amount for FtS Survey

• Do you wish to participate in DoD Fresh Program?– Leave entitlement $ amount for DoD Fresh Program

(minimum of $100.00)

Checklist

• #3: Access TXUNPS – FDP Resources– Training modules – Access on TDA Squaremeals website:

http://www.squaremeals.org/FampNResources/TXUNPSProgramResources/TXUNPSResourcesforFDP.aspx

– Need Help? For general TXUNPS questions or for existing CEs to request login ID and password:

• Phone: (877) TEX MEAL (839-6325)• Fax: (888) 203-6593• Email: squaremeals@texasagriculture.gov

Checklist

• #4: Do you plan on processing USDA Foods (commodities) for SY15?– Ensure you have a ProcessorLink account– Check current balances against anticipated

SY15 needs (K12, Labatt, ProcessorLink, other)

– Enter Pre-order in ProcessorLink • Order Guide will be emailed to all members• Items entered will tie to STC Commercial Food Bid• Pad amount in ProcessorLink Pre-order for TXUNPS

– DO NOT enter Processing Surveys in TXUNPS – FDP Module

Timeline/Due Dates

Jan. 14th: TDA - FDP contract/CE information update, and TDA Annual Surveys available in TXUNPS

Jan. 31st: TDA deadline to select “yes” for FtS and DoD FreshSTC ProcessorLink SY15 Pre-order open

Feb. 3st: TDA FtS Survey available in TXUNPSFeb. 12th: STC SY15 New Food Items Forms dueFeb. 14th: TDA completes entitlement distribution for DoD Fresh

» Submit DoD Fresh Information SheetSTC ProcessorLink SY15 Pre-order deadline

March 14: TDA deadline for all Annual Surveys in TXUNPSJuly 31st: TDA deadline for FtS Survey

Effective Use of Entitlement

Workgroups

Work on …•TXUNPS

•Contract Packets•Annual Surveys

•SY15 Food Items