Glossary of Terms

Agreement — Donated Food, Processing - A legal document entered into between a processor and a distributing agency or eligible recipient agency that provides for the further processing of USDA donated foods. Processing agreements are not viable until the distributing agency approves them prior to the commencement to processing. A processing agreement is also referred to as a processing contract.
Aggregate Award - awarding bid items in like categories (e.g. canned, staple and frozen foods,milk, other dairy products, bakery items) for a specific period of time.
Agricultural Marketing Service (AMS) - The USDA agency responsible for purchasing surplus-removal items such as meat, poultry, fruits, and vegetables. AMS also provides end product certification that, at a minimum, certifies against non—diversion and non-substitution of donated food. AMS Purchases Group A commodities.
Allocation - The method of notifying FNS Regional Offices and distributing agencies of the amounts of Group A commodities purchased for eligible recipient agencies and the shipping periods for these donated foods.
Award or Bid - following a formal request for prices, the bid award goes to the vendor who offered the lowest and best price on a product or group of products as established in the bid documents.
Backhaul - The pick up of a donated food from a DPI or recipient agency for processing and return. There may be an additional charge per pound to pick up the donated food.
Bid Template - a template or document with standard language that may be utilized as a base for bid documents.
Bottom-line Award - contracting with a vendor based on lump sum price quoted for all products in a group.
Brokers - sales representatives, usually independent, hired by a manufacturer to market products, acting as an extension of the manufacturer’s sales force and working with both distributors and school districts.
Brown Box Commodity - Product that is received in the same form in which it was ordered from USDA. For example, frozen corn, canned peaches, diced chicken and turkey ham are processed at the USDA level and they are ordered and shipped to us from USDA in this form. These are all "brown-box" commodities.
By Products - Products other than the specified end products produced during processing. If by-products are sold or used by the processor, their value must be credited to the distributing agency or the recipient agency. Credit arrangements for by-products between the distributing agency or the recipient agency and the processor must be established prior to any processing, documented as part of the agreement, and made available to the grader.
Centralized Purchasing - when the district school nutrition office makes purchasing decisions and consolidates purchases for all schools.
Child Nutrition Label (CN Label) - a packaging label that states that a meat/meat alternate or juice/juice drink product conforms to the nutritional requirements of USDA’s Food and Nutrition Service (FNS) and shows how the product may be credited toward the meal pattern. This is a voluntary program.
Child Nutrition (CN) Labeling Program - A voluntary program administered by FNS that evaluates formulations to determine the contribution a serving of a commercially prepared product makes toward the Child Nutrition Program meal pattern requirements. When approved, a label is placed on the end product that states that the product meets USDA specifications and can be credited as a component(s) of the reimbursable meal pattern requirement.
Child Nutrition Programs - Refers collectively to the National School Lunch Program, the School Breakfast Program, the Summer Food Service Program for Children, and the Child and Adult Care Food Program.
CN Label Number - the specific number assigned by USDA/FNS to a particular product meeting CN Labeling requirements.
Commingle - To store, combine, or blend commercial food and substitutable donated food together into a single inventory at a processor's plant.
Comminuted Meat - An edible product resulting from the mechanical separation and removal of most of the bone from attached skeletal muscle of livestock or poultry carcasses. Comminuted meat can also be called mechanically de—boned meat (MDM).
Commodities - items purchased by USDA through established mechanisms and offered to states to allocate to school food authorities based on the established guidelines for a particular school year. Entitlement commodities are allocated based on an established rate that is based on participation levels from the previous school year. Bonus commodities are allocated through different procedures.
Commodity, Group A - Fruits, vegetables, meat, poultry, and fish products purchased by AMS with Section 32 funds. These foods may also be purchased with funds appropriated to FNS. Group A-type foods are purchased when American farmers produce more food than the normal commercial market needs, i.e., surplus removal. See definition of Section 32.
Commodity, Group B - Grains, dairy, peanut, and oil products that are purchased by FSA with Section 416 funds. These foods may also be purchased with funds appropriated to FNS or they may be donated by FSA. When prices are low and food supplies are abundant, FSA acquires these excess commodities under price-support legislation to assist American farmers. See definition of Section 416.
Commodity, Bonus - A food item not charged against entitlement or against a program's appropriated funds. Bonus foods are to be used by the recipient agency on a “use without waste" basis. These foods are acquired through the price-support operations of the Commodity Credit Corporation or surplus-removal operations of AMS. In all instances, the foods are clearly “donated” to FNS, i.e., no cost is incurred by FNS.
Commodity File - (by school) A USDA computer generated print—out that lists the donated food items, pack sizes, prices per pound, unit gross and net weights, commodity codes, and other information. The Commodity File, issued in mid—November, is used to determine the appropriate contract value for each donated food for the upcoming agreement year that begins on the following July 1“.
Condemned Meat - Meat or poultry that has been determined by FSIS to be unfit for human food due to adulteration, disease, contamination, or other conditions rendering it unusable for human consumption. Condemned meat or poultry can also refer to product that has fallen on the floor or was improperly handled during production.
Conflict of Interest - any private or professional activity that would create a conflict between an individual’s personal interest and the interest of his or her employer.
Consignee - The DPI, recipient agency, commercial warehouse, etc., that physically accepts delivery of the foods by railroad car, truck, or tractor trailer shipment. A receipt is signed to verify the acceptance of a food shipment, the quantity, and the condition in which it was received. The consignee receipt is part of the KC—269A form (Forwarding Notice).
Contract Value of Donated Food - The price assigned by USDA to a donated food that reflects USDA's current acquisition price, transportation and, if applicable, processing costs related to the food.
Contracting Agency - The USDA, distributing agency, subdistributing agency, or recipient agency that enters into an agreement with a commercial food processor for the conversion of raw donated food into finished end products.
Cooperative Purchasing or Purchasing Cooperative - a group of school districts that join together to accomplish all or part of the steps in the procurement process.
Cost-plus-fixed-fee or Formula Pricing - a bid based on the market-based price of an item, plus the cost of freight, overhead and profitmargin. This type of bid allows the final price of an item to fluctuate over the bid period, according to the market price.
Cycle Menu - a set of menus that repeat over a specified period of time, usually expressed in weeks. The length of the cycle varies depending on the needs of the foodservice operation.
Data Submission Form - a form used to obtain the nutrient information of a product from a food manufacturer for the purpose of conducting a nutrient analysis while planning menus.
Damaged Foods - Foods found to be infested, deteriorated, or contaminated as the result of improper storage or latent defects for which the vendor, processor, recipient agency, DPI, etc., is responsible.
Over/Short/or Damaged Report (FNS—57) - A form which consignees use to report overages and shortages in a shipment and commodities damaged in transit. KCCO uses this document to file claims against shippers or vendors.
Delivery Order Number (D/O) - A unique number assigned to each shipment of food. Each delivery order specifies the State, quantity, shipping period, planned usage, and destination of a shipment. Multiple D/Os may be included on a food requisition.
Department of Public Inspection (DPI) - The agency, usually an agency of State government, which enters into an agreement with FNS for the distribution of donated food to eligible recipient agencies.
Detention Charge - A penalty charge assessed by motor carriers or piggyback companies for detaining equipment beyond a specified free time. Mechanical detention occurs when rail cars are detained beyond a specified free time.
Direct Discount Sale - The selling of a finished end product by a commercial food processor, directly to the DPI or the recipient agency. Under this procedure, the processor directly invoices the DPI or recipient agency at the commercial price minus the value assigned to the commodities contained in the case as a net case price. The processor must maintain delivery and/or billing invoices to substantiate the quantity of end products delivered and the net price charged per case.
Direct Diversion - Bulk commodities that are ordered by DPI, on behalf of recipient agencies, to be shipped directly from a USDA vendor to a processor. These bulk commodities are further processed into end products according to each recipient agency's request. The recipient agencies are responsible for negotiating the delivery schedule with the processor and the distributor of their choice.
Direct Refund Sale - The selling of a finished end product by a commercial food processor, directly to the recipient agency. Under this value pass- through system, the processor invoices the recipient agency directly for the commercial/gross case price of the end product. The recipient agency must then submit a refund application to the processor. Various methods of submitting the rebate application are acceptable. These include but are not limited to email requests, using a distributor's velocity report, or the internet.
Direct Shipment - Food ordered by a DPI to be shipped directly from the USDA vendor to the processor, rather than shipped to a DPI’s or recipient agency's storage facility. Since the normal shipping practice is to ship foods to the DPI, this is sometimes called a “diverted shipment," “direct diversion” or “direct delivery."
Distributing Agency - The agency, usually an agency of State government, which enters into an agreement with FNS for the distribution of donated food to eligible recipient agencies.
Distribution Channel - a set of interdependent organizations involved in the process of making a product available for use by the end user.
Distribution Charge - DPI charges to recipient agencies for costs related to intra—State storage and distribution of donated food.
Distributor - A commercial food purveyor who purchases, receives and/or stores commercial food products. Distributors in turn, sell, deliver, and bill the recipient agency or the DPI for the goods and/or services provided.
District Purchasing Profile - a document provided to prospective vendors for the purpose of conveying specific information related to purchasing about the school district and the school nutrition program.
Diversion - A food shipment that has not been received (still in transit) that is rerouted to another location or State DPI.
DoD - Department of Defense: Produce Ordering System
Donated Food - Food donated or available for donation by USDA to eligible recipient agencies. Donated food is also referred to as “commodities.”
Economies of Scale - the most efficient operating level; the point where the costs are less per unit.
End Product - A finished product containing any amount of donated foods that have been commercially processed.
End Product Data Schedule - A standard form used to describe the finished end product being produced. Information detailed on this form includes formulation, quantity of donated food needed to produce a specific number of units of end product, and pricing, packaging and yield information.
Entitlement - A dollar value of commodity assistance, or cash—in-lieu of commodities, which is required by law to be provided to the Child Nutrition Programs and the Nutrition Program for the Elderly.
Entitlement Foods - Values of Group A or Group B foods that are “charged” against a DPI's or recipient agency's level of commodity assistance. The values of bonus foods do not reduce the entitlement funds.
E-procurement/Electronic Procurement - the term used to describe the use of electronic methods at every stage of the purchasing process, from identification of bid requirements through to payment, and potentially to establish contracts.
Escalator/De-escalator Clause or Marketbased Pricing - a provision in a contract stipulating an increase or decrease in price under certain conditions.
Ethics - rules or standards governing the conduct of individuals within a particular organization. A Code of Ethics is a written code of conduct that includes rules or standards governing the conduct of individuals within a particular organization.
Establishment Number - a number assigned by USDA’s Food Safety and Inspection Service (FSIS) that identifies a manufacturer’s name and plant location.
Fair Share - A proportional quantity of an available donated food. Distributing agencies are offered a fair share of the total amount of a given food item that is calculated based on a DPI's percentage of the national entitlement. Distributing agencies use a similar basis for allocating donated foods to eligible recipient agencies. (This was the “old” way of allocating commodities in Wisconsin).
FSA: Farm Service Agency - The USDA agency responsible for acquiring products such as grain, dairy, peanut, and oil products under price—support activity.
Fee-for-Service - The price charged by pound or by case representing a processor's costs of ingredients (other than donated foods), labor, packaging, overhead, and other costs incurred in the conversion of the donated food into the specified end product. Fee-for—service is an alternative to using a standard value pass—through system. It primarily applies to meat and poultry products or other non—substitutable donated foods.
First In, First Out (FIFO) - a method of inventory rotation that dates all stock as it enters the facility and ensures use of oldest stock first.
Fiscal Year - The Fiscal Year is always October 1 thru September 30.
Fixed-price Contract - any contract except a cost-type contract. This term also includes firm-fixed-price contracts.
Food Biosecurity or Food Defense - the protection of food supplies from bioterrorism. Bioterrorism is the intentional use of chemical,physical or biological agents to cause harm. Another accepted term is Food Security.
Food and Nutrition Service (FNS) - The USDA agency responsible for administering domestic food assistance programs.
Food Distribution Division - The FNS division of USDA responsible for administering the donation of commodities to domestic food assistance programs.
Food Safety Inspection Service (FSIS) - The USDA agency whose primary mission is to inspect the wholesomeness of meat and poultry products.
Food Service Management Company - A commercial enterprise or a nonprofit organization that is, or may be, contracted with by a recipient agency to manage any aspect of its food service in accordance with 7 CFR Parts 210, 220, 225, 226, and/or 250.
Forecasting - the use of historical records and other available information and relevant factors to project and adjust the number of servings of each menu item that will need to be purchased, prepared and served at a given time.
Formal Purchasing - the purchasing procedure used for purchases that exceed the allowable dollar amount, known as the Simplified Acquisition Threshold or the Small Purchase Threshold, established at the federal and state level. Invitations for Bid (IFBs) and Requests for Proposal (RFPs) are the two main types of formal purchasing methods used by school nutrition programs.
Free-On-Board (FOB) Destination - A method of pricing in which a processor includes the transportation charges to a specific destination for a product. The processor is responsible for arranging and paying for transportation under this method of pricing. See definition of Free on Board Plant.
Free-On-Board (FOB) Origin - Title transfers at the point of origin. USDA is responsible for arranging and paying for transportation under this method.
Free—On-Board (FOB) Plant - A method of pricing in which a processor excludes the transportation charges on a product. Transportation charges are paid by the recipient agency. See definition of Free on Board Destination.
Full Substitution - A processor can substitute commercial food for commodity foods (except beef, pork, and poultry on a limited approval basis) without restriction, so long as the substitute food is of the same generic identity, equal or better quality, and of domestic origin. Fully substitutable foods are subject to the 100% yield requirement.
Gross Price - Under processing, the price paid by the contracting agency before the value of donated food used in the production of the end product is deducted.
Guaranteed Minimum Yield/Return (GMY/GMR) - The minimum weight or number of finished units of processed product that will be produced and returned to the distributing agency (or recipient agency) using a fixed amount of donated food. GMR/GMY is used primarily with products containing non—substitutable foods. The return/yield is specified on the end product data schedule.
Guaranteed Return - A red meat reprocessing option where the processor guarantees a fixed number of cases that will be produced and returned to the distributing agency (or recipient agency) using a fixed amount of meat. Calculations are based on the pounds needed to produce a case of finished product (Col. 8).
Hazard Analysis Critical Control Point (HACCP) - a risk management system in which food safety is maximized through the analysis and control of biological, chemical and physical hazards as food flows through a foodservice establishment.
Hold - a time period imposed by USDA to investigate a potentially unsafe product prior to making a decision whether or not to issue a recall for the product. During this time, the school may not use the product.
Indirect Discount System - When the processor sells finished product containing commodities to a distributor at a gross price and the distributor sells that product to an eligible recipient agency at the commercial price minus the value assigned to the commodities contained in the case as a net price. Under this system, the distributor must then apply for the refund from the processor for the value of the donated food. This system is also referred to as the “hybrid” system.
Indirect Refund Sale - A value pass-through system under which the processor sells end products containing commodities to a distributor at the commercial/gross price of the end product. The distributor then sells the end product to an eligible recipient agency at the commercial/gross price, plus delivery costs. The recipient agency then submits a refund application to the processor for the value of the donated food contained in the end product.
Informal Purchasing - the purchasing procedure used for purchases that do not exceed the allowable dollar amount, known as the Simplified Acquisition Threshold or the Small Purchase Threshold, established at the federal and state level.
Intermediary - an individual or business that transforms the quantities and assortments of items made by producers into the quantities and assortments wanted by the customer.
Inventory - The accounting of donated food for which a DPI, recipient agency, or processor is liable or responsible. In processing, the inventory can include food in physical inventory (on hand), in finished foods, or in book inventory. Processors who choose to deliver finished product before receiving donated food may encounter negative inventory. The processor does this at his own risk as USDA is not required to make the processor whole. See the definition of Perpetual Inventory.
Inventory control - the process of maintaining food and supplies at the desired quantity levels and quality levels.
Inventory management - the process of ensuring that the quantities of food and supplies necessary to operate are available when needed, while controlling the costs of ordering and holding inventory at the lowest possible level.
Inventory Turnover - the number of times the average inventory has been purchased during a particular time period, such as a month or a year. This is calculated by dividing the cost of goods purchased by the average value of inventory.
Invitation For Bid (IFB)/Invitation To Bid (ITB) - a publicly advertised bid document requiring vendors to respond with a sealed bid that is publicly opened at a specified time.
Just in Time (JIT) - a system that minimizes inventory by ordering food and supplies as they are needed, typically only ordering what is needed in the next 7 to 10 days in inventory for a district that receives weekly deliveries.
Kansas City Commodity Office (KCCO) - An office of FSA that purchases grain, dairy, peanut, and oil products, under price-support authority and makes these products available to FNS outlets. These products may also be purchased by KCCO with FNS funds. KCCO also arranges shipments and makes payment for all commodities distributed through FNS food assistance programs.
Lead Time - the time between when an order is placed and when it is delivered.
Legal Contract and Binding Commitment - a term that means the school district and a vendor have an agreement, preferably written, that is enforceable by law and that both parties have a legal obligation to follow the terms and items specified.
Limited Substitution - The substitution of commercial product for donated foods with some restrictions. This is applicable to poultry products. Processors must have a substitution plan approved by both FNS and AMS. Only bulk pack chicken, chicken parts and bulk pack turkey delivered by USDA vendors to processors are eligible for substitution. No backhauled poultry may be substituted.
Line Item Award - an award contract for products based on the price of each item on the list.
Line Item Bidding - bidding in which the distributor bids on each item on the list and the distributor offering the lowest price receives the order on that item.
Logistics - the managing and controlling of the flow of goods from the source to the end user.
LS-44, USDA Donated Meat Production Information Form- A supplemental report issued by AMS that accompanies the red meat grading certificate that indicates the total pounds of donated food received by recipient agency and the number of cases and/or pounds of end product produced from that starting weight.
Market-Based Pricing - a process that bases the cost of commodities (i.e. milk, produce) on markets.
Material Safety Data Sheet (MSDS) - a written description of the content, hazard and safe handling procedures for chemicals and products containing chemicals as required by the federal Occupational Safety and Health Administration (OSHA).
Middle Man - the term used to describe vendors or suppliers in the purchasing process who conduct business transactions between the manufacturer or processor and the school district or SFA. In school nutrition purchasing, the middle man is often the local distributor. Large school districts or purchasing cooperatives may remove the distributor from the process and establish costs to procure certain products directly from the manufacturer or processor.
Monthly Performance Reports - Reports submitted monthly by the processor to the DPI detailing sales of finished end products to recipient agencies, receipts of donated food, and information on the donated food inventory.
Multi-State Food Processor - A processor who has entered into a process in agreement with agencies in more than one State, or a processor who has entered into a processing agreement with an agency that is in a State other than where the processor's plant or business office is located. If finished product crosses a State line, the processor is considered a multi-state processor.
National Processing Agreement (NPA) - A master agreement between commercial multi-state food processors and USDA, whereby USDA enters into the agreements, approves the end product data schedules, and maintains the surety bond for inventory protection. Used in conjunction with State Participation Agreements signed between the individual State and the processor.
Net Case Price - The price of a processed end product paid by the recipient agency after the value of donated food contained in the end product has been deducted from the gross price.
“Net-Off Invoice" - A variation of the hybrid sales system that allows a distributor's velocity report to the processor to act as the rebate application. These reports may be transmitted electronically.
Non-Substitutable Food - A USDA donated food that cannot be substituted with a commercially purchased product under the terms of a processing agreement.
Number of Days of Inventory - the value of food and supplies tied up in inventory at a particular point in time, usually the end of the month, stated in days and based on the average daily food cost for that month. This value is used for cost control and benchmarking.
Nutrition Facts Label - a label containing information on ingredients, product serving size, selected nutrients and other information as required by the Nutrition Labeling and Education Act of 1990.
One Hundred Percent Yield Factor - A requirement that 100 percent of the value of the substitutable donated food actually contained in the end product be returned to the eligible recipient agency. Any manufacturing losses are to be made up by the processor with commercial foods of domestic origin and equal or better quality than the commodity that was provided. This requirement was established to encourage efficient processing.
Open Competition - a purchasing environment in which all responsible vendors have an equal opportunity to supply the school district with the goods and services that the district specifies.
Ordering - the process of communicating the items and quantities of food and supplies that are needed to be delivered on a given date to the vendor.
Order Placement Calendar - a calendar developed annually and organized by weeks that helps the manager to order food and supplies for a given menu period for delivery by the date needed. It contains the date the menu is to be served, the order date and the delivery date.
Order Survey - An FNS Regional Office contact with DPI to determine the acceptability of a product, the amount of the product desired, and the preferred shipping dates for the product.
Outsourcing - the subcontracting of a process to a third-party organization. The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business.
Par Stock - the level to which inventory is restored each time an order is placed.
Perpetual Inventory - A daily accounting record of the receipt and usage of donated food, which is updated with each transaction of receipt or usage. Perpetual inventory tracks on paper the amount of donated food that should be in physical inventory at any given time and is periodically reconciled with physical inventory.
Physical Inventory - a periodic physical count of all items in all storage areas.
Pre-bid Conference - a meeting held with prospective vendors prior to issuing a final bid. This meeting typically results in a better bid process, because vendors can communicate with the purchasing agent(s) and ask questions. Final bid documents can be revised or improved as necessary to facilitate a more competitive environment through changes in the product list or in other sections of the bid document.
Prime Purchasing Practices - a set of purchasing principles and strategies that will help directors and managers of child nutrition programs control costs, preserve the integrity of established purchasing systems and improve program operations.
Prime Vendor - a term used for a vendor from whom a school nutrition program or purchasing cooperative purchases the majority of food products.
Processor - Any commercial facility which processes or repackages donated foods. However, commercial enterprises, which handle, prepare and/or serve products or meals containing donated foods on-site solely for the individual recipient agency under contract are exempt under this definition. School food authorities that provide meals to other eligible outlets are exempt from being defined as processors if they provide accountability for the commodities and assurance that the value of the commodities is passed on to the school food authority's food service account.
Product Number/Code - the number or code used by a manufacturer to identify a specific product. This code is on the label and is used to ensure that products that are received are products that have been ordered.
Production Records - Records kept by the processor that document the production of the finished end product. The records show the types and amounts of ingredients used to produce the end product and the amount of end product produced.
Production Run (Red Meat and Poultry) - Term used to describe a specified manufacturing period. In most cases, a production run is based on each end product manufactured as stated on an individual LS-44 for red meat (beef or pork) or an individual grading certificate for poultry. The exception to this practice is when production occurs over two or more days and two or more LS- 44s or grading certificates are generated.
Procurement - the process of obtaining goods and/or services; it includes all activities associated with preparing product identifications, making purchases and administering contracts.
Purchasing - the process of getting the right quality and quantity of food products into a school facility at the right time and the right price. Purchasing must meet pre-established standards for quantity, quality and price.
Purchasing Agent - any individual who is officially designated by the school district or school board to contract for necessary supplies, including food, equipment and services.
Purchasing Planning Calendar - a document that lists all tasks related to the bid process, establishing the purchasing system for a given school year and the respective timeline of each task. To construct the calendar, the purchasing agent typically starts with the date of the first food delivery and works backwards.
PY 209 - The poultry production's grading certificate that shows how many pounds were put into production and what finished products were produced.
PY 210 - The poultry grading certificate that shows the incoming weight of the USDA purchased load.
Quality Control Plan - A processing company's plan that assures that the products produced meet minimum specifications for quality, pack size, and content.
Recall - a voluntary action by a manufacturer or distributor to remove products from the marketplace and protect the public from products that may cause health problems or possible death; a recall also is used to remove products that have been mislabeled.
Receiving - the point at which a foodservice operation inspects the products and takes legal ownership and physical possession of the items ordered. The purpose of receiving is to ensure that the food and supplies delivered match established quality and quantity specifications.
Recipient Agency - Any of the following organizations within a State eligible to receive USDA donated foods: schools (public and private), residential child care institutions, charitable institutions, nutrition programs for the elderly, summer camps, Summer Food Service Program participants, and soup kitchens.
Refund Application - An application (usually a pre-printed form) completed by a recipient agency or distributor and sent to the processor that certifies the purchase of end products. Receipt of the refund application obligates the processor to refund the contract value of the donated food contained in the end products purchased. This application may be sent electronically.
Refund System - A value pass—through system through which a recipient agency purchases a processor's end products and receives from the processor, by means of a refund application, a payment equivalent to the contract value of the donated foods contained in the end products. See the definition of Refund Application, Direct Refund Sale, and Indirect Refund Sale.
Regulations: Section 32 - Section 32 of Public Law 74-320, as amended, authorizes USDA to purchase nonbasic perishable foods for the purpose of encouraging the domestic consumption of such foods by diverting them from the normal channels of trade or commerce. See definition of Group A Commodities.
Regulations: Section 416 - Section 416 of the Agricultural Act of 1949, as amended, authorizes USDA to donate basic nonperishable foods acquired through Federal price—support operations for use by needy persons, for use in nonprofit school lunch programs and nonprofit summer camps for children, and for use in charitable institutions to the extent that needy persons are served. See definition of Group B Commodities.
Reorder Point (ROP) - a predetermined number usually calculated based on a number of factors. Once inventory drops below the ROP, a replenishment order is generated.
Request For Proposal (RFP) - an invitation for suppliers, through a bidding process, to submit a proposal on a specific product or service. A bidding process is one of the best methods for leveraging a purchasing organization’s negotiating ability and purchasing power with suppliers. The RFP process brings structure to the procurement decision and allows the risks and benefits to be identified clearly upfront. The RFP purchase process is lengthier than others, so it is used only where its many advantages outweigh any disadvantages and delays. The added benefit of input from a broad spectrum of functional experts ensures that the solution chosen will suit the purchasing organization’s requirements.
Request For Information (RFI) - a proposal requested from a potential seller or a service provider to determine what products and services are potentially available in the marketplace to meet a buyer’s needs and to know the capability of a seller in terms of the offerings and strengths of that seller. RFIs are commonly used in major procurements, where a requirement could potentially be met through several alternate means. An RFI, however, is not an invitation to bid; is not binding on either the buyer or sellers; and may or may not lead to an RFP or RFQ.
Request For Quotation (RFQ) - a process that is used in situations where discussions aren’t required with bidders (mainly when the specifications of a product or service are already known), and price is the main or only factor in selecting the successful bidder. An RFQ also may be used as a step prior to going to a full-blown RFP to determine general price ranges. In this scenario, products, services or suppliers may be selected from the RFQ results to bring in to the operation and further research in order to write a more fully fleshed-out RFP.
Responsive Vendor - a bidder who responded to all of the required portions of the bid and followed specified directions.
Responsible Vendor - a bidder that is a reliable supplier that can fulfill the provisions/specifications of the contract.
Reverse Auction - a tool used in industrial business-to-business procurement. It is a type of auction in which the role of the buyer and seller are reversed, with the primary objective to drive purchase prices downward. In an ordinary auction (also known as a Forward Auction), buyers compete to obtain a good or service. In a reverse auction, sellers compete to obtain business.
Rework - Wholesome, salvageable product generated during a production run that is not acceptable as the specified product stated on the end product data schedule. Product such as broken patties or nuggets, or other defects such as missing breading, lumps, and ridges would be classified as rework product. Rework may NOT contribute to the yield achieved during a production run.
Robinson-Patman Act - an antitrust law that prohibits unfair trading practices.
Run/Code Date - the number stamped on the label of a product at the time it is packed. This number identifies the date, shift, etc., when a product was packed.
Safety Stock - stock held that is in excess of what the organization expects to sell. The purpose is to act as buffer inventory to account for unexpected customer orders, increased demands and longer-than-expected manufacturing or transportation times.
Sealed Bid - a bid submitted as a sealed document, by a prescribed time. The contents of the bid will not be known to others prior to the opening of all bids.
Shipping Period - A specified time frame for USDA's vendors to ship the donated food. The length of the shipping period varies with the type of donated food being shipped and the mode of transportation.
Slip Sheet - A thin fiberboard or corrugated cardboard sheet, used instead of a pallet, commonly "48" x "40" with a lip on one end and one side, on which product is stacked for shipment. The purpose of the lip is to provide a grasping point for the push-pull attachment.
Specification - A detailed description of the product which vendors to USDA must meet when selling commodities to USDA. Distributing agencies or recipient agencies may also use end product specifications in issuing bids for processed end products that utilize donated foods.
Specification - a statement that contains a clear, concise and detailed description for a particular food item, supply material, equipment or service. Specifications address the characteristics of the items to be purchased and the conditions under which the purchase will be made. Various authors list different elements for a food specification. Characteristics for food items might include the name of the product, federal grade, size information for container and product, unit on which price will be based, quality indicators, packaging procedures and type of package, test or inspection procedures.
Standards of Identity - a term used to specify what ingredients a product must contain for the product to have a specific name.
Standards of Quality - Minimum standards used to establish specifications for quality requirements, such as color, uniformity, defects, etc. For some food products (such as canned or frozen fruits or vegetables, meat, eggs, poultry, etc.), federal grade standards set uniform quality standards.
Standard of Fill - the standard that tells the packer how full the container must be and how this is measured.
Standard Terms and Conditions - the section of a bid document that contains legal language covering details such as the correction of mistakes, collusion, unit price prevailing and adherence to specifications.
Standard Yield (SY) - A concept that originated in poultry processing where the processor guarantees a fixed number of cases that will be produced using a fixed amount of commodity. The standard yield is always fixed at a level that requires the processor to add some commercial product to achieve the required yield. Standard yield could be used for other commodities when a processor has significant manufacturing loss in the production of the end product.
State Participation Agreement (SPA) - A component of the National Processing Agreement where a distributing agency enters into an agreement with a multi- state processor and specifies state-specific requirements such as state contract information, methods of value—pass—through, distribution, testing, labeling, monthly reporting, or any other state—specific requirements.
State-Processed Commodities - Bulk commodities that are ordered by DPI and shipped directly from a USDA vendor to a processor. Bulk commodities are further processed into end products, which have been determined through a state—wide bid process. The finished end products are shipped from the processor to the state—contracted warehouse and are offered to recipient agencies along with the “brown—box" commodities.
15 Core State-Processed Commodities - Effective school year 2006-2007 and thereafter, DPI will be offering 15 core State- processed commodities. These 15 products were selected by the Commodity Task Force Processing Committee, based on recipient agencies top demand and usage.
Stock - the inventory of food and supplies on hand.
Storage - the act of placing food products into climate-controlled locations, such as storerooms, refrigerators or freezers to maintain quality and assure safekeeping.
Strategic Sourcing - an institutional procurement process that continuously improves and reevaluates the purchasing activities of a company. It is one component of supply chain management.
Substitution - the replacement of the item ordered with an alternative item, because the item ordered is not available; substitution also may relate to the replacement of a menu item with an alternative menu item because that menu item is not available. Menu Substitution is a change made to a planned menu due to various reasons, such as food shortages or improper delivery from vendors; substitutions may change the nutrient content of planned menus.
Substitutable Food - A USDA donated food that may be replaced by a commercially purchased food of domestic origin and of equal or better quality to the donated food provided by USDA.
Summary End Production Data Schedule (SEPDS) - A compilation or summary of information contained on end product data schedules.
Truck Lot - A quantity of food equal to a truck shipment. Generally, a truck lot is equal to approximately 40,000 pounds of donated food and contains between 700 to 1,400 cases of food, depending upon the food item.
Value Pass-Through System - A system used to ensure that the full value of the donated food contained in the end product is passed on to the eligible purchasing recipient agency. See the definitions for Direct Sale, Indirect Sale, and Discount System.
Vegetable Protein Product VVP and TVP - A product that can be used to satisfy all or part of the meat/meat alternate requirement of the Child Nutrition meal pattern requirements when combined with meat, poultry, or seafood and when it meets the other requirements of 7 CFR,
Velocity Report - a report generated by the distributor that tracks how often a product is ordered.
Vendor - an organization that sells goods or services; a supplier.