Market Basket Analysis When Procuring Program Goods and Modifying Contracted for Product Lists

Good afternoon and welcome to the
webinar to present the memo entitled Market Basket Analysis When Procuring
Program Goods and Modifying the Contracted-For Product List, published on
January 17, 2018. I am Sandra Foss, a program analyst
with the Food and Nutrition Services Child Nutrition Programs I am joined
today by Tom Patrick from the Virginia Department of Education school nutrition
program who will be co-presenting with me. Also, Courtney Haueter of the Child Nutrition Programs and Kiley Larson of Food Distribution Programs will be
joining us at the end of the webinar to address any questions concerning market basket analysis. Together over the next hour we hope to provide an overview of the Market Basket analysis and then review the questions and
answers portion of the guidance. Before we begin we want to ask you to please use the chat box to input any questions you have related to the content of this
webinar. We will be reviewing questions submitted specifically on the Market
Basket guidance during the webinar and will address any questions raised at the
end of the webinar. So let’s get started! [Pause] For goods used in Child Nutrition
Programs, the memo also addresses the addition of goods after a contract has
been awarded. The memo applies to all program operators operating the National
School Lunch Program, School Breakfast Program, Summer Food Service Program, Child and Adult Care Food
Program and for Food Distribution Programs. We will use the terms “Program
operator or operators” throughout the webinar to refer to this group
collectively. This guidance was developed with the help of a work group consisting
of State agencies, the School Nutrition Association, and industry partners. We
would like to thank Tom Patrick for his participation in both the workgroup and
this webinar. The workgroup members provided perspective on current market
conditions where this method of contract evaluation is common. They also provided
information so FNS could consider how Program operators using this method can
do so while still complying with Federal procurement standards and maximizing
full and open competition. In a nutshell, this memo provides guidance on the use of market basket analysis while soliciting for goods used in Child Nutrition Programs using market basket analysis when procuring processed end products containing USDA foods and which are purchased using the net off invoice value pass-through system and adding goods once a contractual relationship has been established. The term “market basket” is used to describe a practice utilized by Program operators of awarding contracts
based on an evaluation of the lowest price a vendor can offer for a sample of
goods. We want to make sure upfront that it is clear that this is not a new type
of method of procurement, rather it is a way of analyzing the prices using a
representative sample of goods and using that information when determining
contract award. It is used as part of the solicitation process and when it is to
be used, it must be clearly specified in solicitation documents and the resulting
contract. For example, this type of cost analysis can be used in a request for
proposal or invitation for bid solicitation. Again, it is a way of
determining contract award by looking at a representative sample of the goods you
are soliciting for. So, using this type of cost analysis in a request for proposal
solicitation or an invitation for bid solicitation will still result in a fixed-price contract or a cost-reimbursable contract. The point is that it is not a new solicitation method nor a new type of contract; rather, it is a
way to analyze the prices received in response to a solicitation in order to
award a contract. This process allows Program operators to look at a representative sample of goods and award a contract based on that representative
sample. We will go into greater depth on this as we progress through the webinar. As already mentioned, it’s using this type of a contract a cost analysis such
must be specified in written procurement procedures, solicitation documents, and
contractual agreements. FNS recommends that this represent at least 75% of the estimated total cost of the contract, that is, the contract value. Let’s look now at the details of the memo. Program operators must comply with the program and government-wide procurement standards, evaluating the price of all
goods either as an aggregate bottom line or total cost or by line items is the
preferred method of awarding a contract. However, we recognize price analysis can
be simplified and a valid price analysis can still be achieved when only the
bottom-line costs of major items are totaled to determine the lowest price
between bidders. As always, consistent,with 2 CFR 200.320, all contracts must be awarded to responsive and responsible contractors, price must be the primary factor when evaluating bids and proposal, and contracts must be awarded to the lowest bid or proposal most advantageous to the program. So how must the market basket analysis work? A market basket analysis allows a Program operator to review bids using an established, representative sample of goods and uses this subset of prices to award a contract. The published solicitation must include language that allows for this type of evaluation. We
will look at sample language in a later slide. The market analysis is not
acceptable for awarding equipment or service contracts such as pest control
as service contracts do not lend themselves to this type of analysis. In
determining the goods to be used for evaluating an award the Program operator
must select a representative sample and include that in its solicitation. Again,
FNS recommends the aggregate value be 75% or more of
the estimated value of the contract to be awarded. When using a market basket analysis prior to final contract award the Program operator must obtain
pricing for the remaining listed goods that were not listed in the market
basket analysis. The pricing of these miscellaneous goods must be reasonable.
As always, all items on the list of goods to be procured, whether used in the
market basket analysis or not, must have clear and accurate descriptions,
specifications, and estimated quantities to be used in evaluating responses and
awarding the contract. The market basket analysis is permissible with procuring processed end products containing USDA food purchased using the net off invoice value
pass through system. Under net off invoice, processed end products are sold to an eligible distributing or recipient agency, as appropriate, as a net price
that incorporates a discount from the commercial case price for the value of
donated food contained in the end product. Net off invoice is used in many different circumstances but is often used when a commercial distributor
exists in the supply chain between the processors and distributing or recipient
agency. Market Basket analysis is not appropriate in fee for service processing contracts as these are service contracts and do not lend themself to this type of analysis. The Market Basket memo also addresses adding goods to a contract. This guidance allows Program operators to add goods after a contract has been made when first, the option to add goods is included in the original solicitation and contractual agreement, and second, the total value of all
additional goods does not exceed a specified amount of the estimated value
of the contract at the beginning of the contract year. In other words, you can add
goods to a contract after the contractual agreement has been entered
as long as that is included in your procurement procedures, solicitation
documents, and contractual agreements. FNS recommends limiting additional costs to five to ten percent of the estimated value of the contract. The memo provides
flexibility to state agencies in establishing thresholds lower than 10
percent when adding goods to a contract after a contractual agreement has been
entered. The memo also provides sample solicitation and contract language on
adding goods to a contract in addition to specific language on the use of
Market Basket analysis. So, you ask, what if I need additional
items on an ongoing basis? There are occasions when program operators need to purchase goods not included in its existing contract. For example, a new food
is introduced by a supplier that may benefit the Program. Such purchases
should be made using applicable procurement methods such as micro-purchases, small purchase procedures, sealed bids or competitive proposals,
depending upon the value of the purchase. If it is determined that purchases are
needed on an ongoing basis they may be added to an existing contract if the
following conditions are met. First, the option to add goods must be included in the original solicitation and contract, and second, the total value of
all additional goods and quantities of listed Goods that exceed estimated
quantities may not exceed limits specified in solicitation and contract.
An example of a specified limit would be a percentage of the estimated value of
the contract at the beginning of the contract year. If the value of any
additional goods exceeds the specified limit, a separate procurement procedure
for those goods must be conducted, or these purchases will be considered an
unallowable cost. Again, FNS recommends limiting additional costs to 5 to 10% of
the estimated value of the contract. If the contract allows a renewal option and
the renewal is included in the contract then upon renewal any goods added to the
contract must be included in a contract amendment. For each year of a renewed
contract, a new basis for contract value including the actual expenditures of the
previous year plus the value of the additional items must be established.
Likewise, actual expenditures that fall below the initial estimated value of the
contract could result in lower contract value in subsequent contract years.
Program operators must maintain records of all additional goods purchased to
ensure that the value of additional goods purchased does not exceed the specified limit. The latter half of the memo looks at
questions that might be raised by this guidance. To address these question we have
posed hypothetical questions and provided responses to these. When discussing Market Basket analysis these look to: first, reinforce the importance of forecasting and estimating quantities when procuring Program goods; provide guidance that all good to be procured must be listed in the solicitation; however, some goods might be overlooked at the time the solicitation list of goods is drawn up; provide sample language surrounding Market Basket analysis for use in
program operators required, written procurement procedures; and, outlines documentation the program operator must maintain; [and finally] providing guidance on determining a representative sample that may be used for a market basket analysis. Tom Patrick: When discussing modifications to a contracted for list of goods, generally, the memo provides guidance on: first, sample solicitation and contract language to use when adding goods to a contract. Also, the limit that must be specified when adding goods to a
contract. And finally, goods may be added even though not included in a list of
all goods to be to be procured under the contract as long as the additional goods
do not exceed the specified amount of the contract value. The memo also provides guidance on what an addition actually is and the fact that States
establishing a threshold lower than that recommended by FNS which is five to ten percent. As we’ve mentioned FNS recommends limiting additional cost to five to ten percent of the estimated value of the contract. And then lastly, the memo addresses how to amend the contract to allow for the
addition of goods. Sandra: Let’s look now at some of the specific questions FNS considered: How do I create the list of all goods to be purchased when developing a solicitation? Program operators should have a forecasting plan and process for determining the type and quantity of goods needed. Forecasting is normally based on menus, Program participation, and prior orders. Basing procurements on menus and program participation is a best practice and prior orders and contracts should be used to assist with this forecasting. In addition, suppliers often provide velocity reports to notify Program operators of the volume of goods purchased and may contain the number and
total value of goods purchased for the prior year, or period, through a contract
award. Thus, a velocity or usage report could be
used when developing a list of all goods anticipated for purchase in a
solicitation. Best practices would be to include a provision in all solicitations
and contract documents that suppliers will provide velocity reports as
requested. Forecasting resources include: the Institute of Child Nutrition’s Forecasting the Procurement of Food and from FNS: the menu planning webpage, the food buying guide, and procuring local food for
Child Nutrition Program resources. Do I need to estimate quantities when
using a market basket analysis? The answer is yes. All solicitations,
regardless of the process for contract award, must include reasonable estimates
of usage for every item to be included in the solicitation. This includes solicitations for processed end products containing USDA Foods purchased using any value pass through system. The estimated usage quantity is essential
for evaluation of the contract award. FNS understands there is considerable concern about affective forecasting by Program operators, specifically, whether they will
procure what they forecasted and in the quantities that are included in the
solicitation and contract. Forecasted quantities represent an estimate of usage and actual purchases may be more or less than the estimated quantity. However, the forecasted quantity must be a reasonable expectation of the actual
quantity to be purchased and the Program operator should make every effort to purchase the estimated quantities. If the actual quantities purchased [if the
actual quantities purchased] exceed the estimated quantities to be listed in the contract, the net increase is subject to the limit on increases in the total contract
value for that contract period, at the limit that is in the contract. In my solicitation, do I have to list all
goods I will procure under the contract (whether or not a
market basket evaluation method is used)? The answer is yes; however, some goods
might be overlooked at the time of the solicitations list of goods is drawn up.
Additional goods may be allowed if allowed under the original solicitation
and contract. The requirement to list all anticipated goods is in keeping with the
requirement that all procurement transactions be conducted in a manner
providing full and open competition as required by 2 CFR 200.319(a). Likewise clear and accurate descriptions and estimated quantities are required
for all goods and services listed in the solicitation per 2 CFR 200.319(c)(1). Do I need written procurement
procedures for how I conduct my Market Basket analysis to award a contract? The answer again, is yes. All Program operators must use their own documented
procurement procedures which conform to Federal, State, local and tribal laws and
regulations. All cost analysis procedures must be part of these written procurement procedures including a Market Basket analysis, if used. If using a Market Basket analysis, you will include the percentage of the estimated total
value to use to determine the representative sample. Program operators
can refer to the sample language provided in the memo and on the next
slide and modify for their specific needs. Again, FNS recommends a sample
size of at least 75% of the value of the contract. This slide shows the sample
language that may be adapted and used in your written procurement procedures I
will not read it here but this sample language can be found in question 4 of
the memo. The market basket analysis sample is
established to represent in this case 75% of the total estimated value of the
contract to be awarded. The most recent velocity sales report from our current
supplier was used to project the balance of the year and adjusted for any
estimated change in menu and participation for the following year. As
a result, the list of in this case 100 goods to be purchased under the
solicitation includes the top 60 goods purchased by dollar volume representing
the 75% threshold. Prices for the remaining 40 goods listed in the solicitation should also be included though they will not be a part of the
market basket analysis. You will see in this sample language that the solicitor
has chosen to obtain prices for all goods in the solicitation even though
only a representative sample will be used when evaluating for contract award.
It is up to the soliciting party to determine if they want to obtain the
prices for the remaining goods in response to the solicitation as the
sample language shows, or after the vendor has been selected, but before the contract has been awarded, which is also consistent with this guidance. The option to ask for pricing of the goods anytime before the contract is awarded
is in keeping with the intent of the memo, which is to provide flexibility to Program operators, when procuring
goods for the Program. How do I determine a representative sample for my market basket analysis? FNS recommends using a representative sample that reflects again, 75% or more of the estimated contract value. For example, suppliers often
provides velocity reports to notify Program operators of the value and
volume of goods purchased for the prior year or period through an awarded
contract. The Program operator’s written procurement procedures state they will
use a sample representing, in this case, 80% of the value of goods when
using the market basket analysis. When looking at the products purchased from the prior school year, the Program operator determined that 35 goods represented 80% of the value of total purchases during that year. These 35 goods then become the representative sample for the market basket analysis. Program operators need to consider forecasted changes and usage for the upcoming contract period
in determining the representative samples and value of total purchases. It
should be noted that the number of goods in the sample will vary depending on purchase needs, purchase price, product quantity,
and total contract value. A best practice is to include a provision in the
solicitation and contract documents. Again, that suppliers will provide
velocity reports as requested. What documentation of procurement must I
maintain and make available during a procurement review in order to support my evaluation process of price/cost analysis? All procurements must be documented, including those using Market Basket analysis. This would include related documents and spreadsheets that list prices, cost, and
estimated quantities of goods, and any other supporting documentation used for developing and analyzing the Market Basket. Additional procurement records
should include an evaluation matrix used to evaluate bid or proposal costs, copy of solicitation documents used to award a contract, bids or proposals that were received, and any communication with potential
respondent and any bid or proposal disputes receive as a result of the
contract award. Tom: Now that we’ve finished discussing Market Basket analysis and how it can be used we’ll focus on adding goods when a contractual relationship exists. The first question is: Am I allowed to add goods to an existing contract? And the answer is yes. However, when adding goods please follow the memo guidance.
The solicitation and contract must contain language that allows goods to be
added and must establish limits on the amount that can be added. Again, FNS
recommends that the additional cost be limited to five to ten% of the
estimated contract value. So when adding on additional goods underneath an existing contract are needed the addition is limited to a total value
established at the beginning of that contract period and at the beginning of
renewal years and must be specified in the solicitation document and resulting
contract. In other words, to ensure full and open competition everyone that is responding to a solicitation must know because it is stated in the solicitation
that goods can be added but that there is a limit. It is essential to monitor the contract to ensure that the established limit is not exceeded. So, you may be wondering is there sample
solicitation and contract language that I can refer to? And again, the answer is
yes. If you refer to question number seven of the memo you will see sample
language that can be modified to fit your needs and which can be used in procurement procedures, solicitations, and contractual agreements. What goods should I list in a
solicitation and contracts? All foods and supplies necessary for reimbursable and non-program meals and food served in Program operations should be listed in
the solicitation and ensuing contract. This includes processed end products
containing USDA foods purchased using any value pass-through method. All items
on the list of goods to be procured must have clear and accurate descriptions,
specifications, and estimated quantities to be used in evaluating responses. Please remember that you should receive prices for all goods requested in the
solicitation however if using Market Basket analysis you can use a
representative sample to determine who you will procure the requested goods
from. So what is considered in addition to the
list of goods in the solicitation and contract? Any food or supply that was
not part of the original solicitation or contract list is considered an addition. An example would be a new food available for purchase on the market. An occasional,
approved substitution that a contractor may make to fulfill an order is not
considered an added product. Then we may wonder how should I monitor my contracts so they do not exceed the limit the contract allows? Program operators must maintain records of their solicitation, the contracts (which includes the list of
goods to be purchased), and the list of goods added, included including prices
and the value of added purchases. The documentation must be available during procurement reviews. Further, Program operators must, on a regular basis, analyze the value of the added good against the total estimated value of the
contracts established at the beginning of the contract period. This ensures of
you do not exceed the limit allowed by contract. Next, what do I have to do in order to
amend a contract in order to include additional goods? For this question concerning added goods, again, what do I have to do? To answer that, Program operators may issue an amendment to the contract that incorporates the added goods as part of the ongoing contract list, subject to the limitation on adding
goods that is set in the contract. When the option to renew a contract is present in the solicitation and contract and when the optional renewal is agreed
upon by both parties, a new base calculation of the value of the contract
is to be established for the purpose of resetting the allowable limits on added
goods during the new contract renewal period. In other words, if both parties
agree to renew a contract and there have been goods added, then a couple of things
need to be in place. First, the contract has to say that goods can be added and there needs to be a limit on how much can be added. The addition of goods cannot exceed that limit. When it comes time for renewal those added items or decrease in
items will be used to determine a new baseline value. For example, I have a contract that the first year is valued at $151,000 and includes the provision that I can add goods as long as it does not
represent five% change which would be $7,550. That year I added two groups of items that I needed to purchase on an ongoing basis and decided that I want to add them to the contract. One group of items costs $7,000 the other group costs $6,500. Upon renewal, I can add those additional goods into my contract bringing the
value of the contract to $158,000. The other group of items
which cost $6,500 I cannot include in the renewed contract because that would have exceeded my 5% change limit. Sandra: Now it’s your turn! Courtney and Kiley will now join us to share the questions and answers provided during the presentation. We welcome the opportunity to discuss the memo and provide any clarification we can in addition to hearing your thoughts on the implication of this memo. Please enter your comments and questions into the chat box and we will address as many as possible as time allows. Courtney and Kiley. Welcome. Courtney Haueter: Thank you Sandra and thank you Tom; we appreciate you. Um, so far we’ve received several questions through the chat feature, so we
appreciate that and your participation. We begin with the question: Does this type of process apply to equipment such as dishwashers and such? And per the memo,
and when I say memo I’m referring to SP 04-2018, SD-144, no, this type of market basket analysis does not apply to contracts for equipment or services. Another question we had, is if the
purchase is informal and there is no contract is this policy memo
applicable. The policy memo as it stands applies to formal procurement using
formal procurement procedures such as an IFB (invitation for bid) or RFP (request
for proposals). Um, having said that, we are discussing the applicability of this
analysis to informal procurements going forward, but as it is right now, this memo applies only to formal procurement. Another question is: Is the 75% pertaining to the 75% of the quantity of line items or of the dollar value of extended line items? It seems as though you are saying is the latter 75% of the estimated value of the contract. And that is correct. We have a question: Is issuing a purchase
order to meet the contract requirement of Sorry. Is issuing a purchase order to
meet the contract requirement of the RFP process? In other words, the
step three of the process? So, just to kind of go over how this would work, is that you would forecast your needs, estimate the value, develop the
solicitation (in this case we’re using the RFP process), include the use of Market Basket analysis in the solicitation, and also make sure that it
was included in your procurement procedures. You would list all the goods
that you want to receive using the RFP (request for proposals) and then in the
solicitation you would specify what percentage you’re going to use, of
estimated value, to award the contract So, we recommend 75% of the estimated value. So let’s say that happens to be the top 20 items, you would use the prices for those top 20 items to evaluate the award, but keep in mind that you still have to get the prices before the contract is awarded for all the other goods in the solicitation. This can also be used in an invitation for bids, similarly. Kiley Larson: Another question we received is: [Is] NOI [net-off invoicing] the only value pass through allowed? The answer to that question is no. NOI was mentioned in the memo because market basket analysis is most
typically used under NOI contract but procuring entities could use a market
basket analysis with other value pass-through systems such as a refund value pass-through system. But please note that the value [sic] does currently state that fee for service contracts are not appropriate for the market basket
analysis. Courtney: A procedural question we had is: Will there be copies of this presentation sent out after? Yes, we will email to
participants a PDF copy of this webinar, however, slide notes will not be included.
After we have had this webinar transcribed with captions, we will make
it publicly available and send an announcement out on Partnerweb. A question we had about the five to ten percent range is: Why did FNS come up with five to ten percent? Is that defined in any law, statute, or regulation or is it just a suggestion? Per the memo that we are using (and this is included on the bottom of each slide for your ease of reference), the five to ten percent range is a [indecipherable] recommendation from FNS. It was reached at in conjunction with work group that represented several State agencies and industry. We gathered their feedback on a percentage change threshold and they (and we) concur with the five to ten percent range being that
which we are most comfortable with and which is designed to allow for some
flexibilities when using formal procurement process. Again, a question about the five to ten
percent limit on adding items to a contract. A state asks (I’m assuming it’s a State; sorry) state [sic]. The question is: It has been repeated FNS recommends five to ten
percent. States are going to come across SFAs [school food authorities] who go above and beyond this percentage. How are SFAs [sic] [State agencies] going to review these SFA’s and/or handle this? So, as we stated in the webinar it’s imperative that this threshold be
included in documented proceed [sic] procurement procedures and that when you [sic] it should be included in solicitation documents and contracts and it should be
used [sic] it should be being used accurately as stated in those documents. A question: What is the advantage of
using this procurement method? The workgroups felt when they when we were getting their opinion on on this matter that this was a way that when soliciting
goods you don’t have to get the prices for all the goods in the beginning. You
can use a representative sample and make an award based on that. But noting that you do need to get the price of all goods before the contract is awarded to
ensure that those prices are reasonable. [Pause] Pardon me while I read through the questions. [Pause] If a group of districts purchased goods
as a co-op and each district has its own procurement procedures when procuring as a coop, so we include all the procurement procedures for each district or only includes a cooperative procurement procedures in the
solicitation document? [Pause] When when the district is being reviewed the reviewer will look to see that if they’re using the Market Basket analysis it included
this method in their documented procurement procedures and that these
are included in solicitations such as invitation for bids and requests for proposals and in the resulting contract and that it is used according to how it is stated. [Pause] Sandra: This is Sandra. I might also recommend that the co-operative survey their districts and determine what each
district has established as their maximum value and then the co-operative
would use that most restrictive approach because, as in all Federal
procurement standards, the most restrictive threshold, for instance,
applies with small purchase procedures so in the case of the specified amount
the most restrictive amount would apply that would be the recommendation that
they might consider Courtney:Thank You Sandra. Another question we had is: Do you have
available examples of what this looks like sample contract, list of item,
documents needed? I’m a visual person (smiley face). Thank you for the smiley face. Um, in the memo we have sample language that can be used in the written
procurement procedures and the sample language can be adapted to your needs
and is language on the market basket analysis and also sample language for
adding goods. The question is: Is the percentage additional add-on per year or contract? So when adding goods each time the contract is renewed, those additional goods would be combined into the value, noting that that should not exceed the
threshold established. FNS recommends that that be limited to 5 to 10%. [Pause] John had a question: Can you amend a
contract during the contract period to increase the total value in cases of increased participation or adding a Program? That is a that’s a tricky
question and would depend on the circumstances. Um, we always want to avoid material changes to a contract. Um, material change is a change that if both parties had known about it or the contracting party had known about it they would have bid differently. Or parties who wanted to contract, if they had known, would have this differently. So, um, generally, changes to a contract can be made if both parties agree. But again, noting that you want to tread lightly. Um, some of these questions are very fact specific and without more information it’s hard to just give a clear yes or no. How easy is it to piggyback on one of these contracts? We’re going to stick to market basket analysis. Adding parties to a contract we’ve addressed in another memo we issued [on] group purchasing efforts. I believe it is
SP 38-2017. That might be to buy American memo. I’m sorry I don’t have the memo code
memorized but we have addressed that in other places. [Editorial note: the memo on group purchasing is SP 05-2017, dated October 19, 2016.] [Pause] So question [sic] another question from John: If the supplier substitutes different products in place of an item in the bid
does this go against the 10% of added goods or does it it exist within the
awarded items. So I’ll refer specifically to question 9 of the memo that says an occasional, approved substitution a contractor may make to fulfill an order
is not considered an added product. And that thus that would not go towards the threshold established in your procedures and solicitation and contract. A question from Vivien: If a contract is
already awarded to different manufacturers for different products can
we do an RFP for distributor using cost plus method? This distributor will go out
to purchase, pick up, and deliver items to LEAs [local education agencies]. A cost plus method means a fixed case charge or a percentage added to the price of the item which is included in the awarded manufacture RFP. This is just a reminder that just that costs plus a percentage of cost contracts are not allowed and are specifically forbidden
under Federal law. [Pause] Please bear with me as I look for some additional questions. [Pause] Again, a question about whether this
market basket analysis is used for procurement of services and no
procurement of services does not lend itself to this type of cost analysis question. [Pause] A question/statement from Barbara: I did not understand the last statement about how much can be added in an amendment–I didn’t think there was a limit. When adding goods to your contract if you’re going to have that option, it should included in the solicitation document and contract and there should be a limit. FNS recommends a
change no more than than five to ten percent. [Pause] Now is a question from Robert: Isn’t this
just the line-item bid? We are listing 75% of the items how is this a market
basket? So, in this case you’re using a 75% of the estimated value of the
contract award … Sorry, let me start over. Sandra: May I clarify, if the line item is the
method of award because in a line-item award every individual item is evaluated and it can become awarded to one contract contracted party and another line item
award can be awarded to another contracted party. So, I do believe in if
we understand your question correctly the market basket would not apply in the
contract when their line item is the method of award. [Pause] Courtney: Do the rules regarding Market Basket survey apply to catalog bids ie awarding the entire catalog? [Pause] We are going to skip that. With two minutes to go let me see if I
can answer just one more question. Does Market Basket apply to both formal IFB bid and RFP request for proposals? Yes, it absolutely does. Sandra: May I offer that
in the last minute that we have remaining of time we receive all of
these questions and we will be able to use these questions to inform additional
guidance. So we very much appreciate that you have provided this active engagement
in providing questions this afternoon. I think we’re pretty much out of time. We
want to thank you so much for your participation on this presentation today.
We hope this has been helpful and we hope that you will refer back to Memo FD-144, SP04-2018, and if you’re with a Summer Program of [Memo code] 1-2018 or with the Child and Adult Care Food Program, it is [Memo code] 04-2018 as was presented on the slide. Again, we will provide the slides and a transcript of the presentation [conducted] this afternoon and it will be announced on partnerweb and we hope to have this information to you in the near future. This ends our presentation this afternoon. Thank you very much and goodbye.

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