SUPER Co-op Newsletter

April-May  2006

EDITORIAL

The first Newsletter was a success.  The second one didn’t get much of a response.  As a matter of fact, I didn’t get any reaction and worried for awhile if it really reached the intended audience.  Well, I know that at least one person got the March issue, because he complained (sort of) that he liked the song lyrics better than the literary quotes. So just for him (well, for those of you who like the songs, this is for you as well) here we go:
“Words are flowing out like endless rain into a paper cup,
They slither while they pass, they slip away across the universe
Pools of sorrow, waves of joy are drifting through my open mind…”
(John Lennon/Paul McCartney – Across The Universe)

RFP for 2006/07 Commodity Distribution

Gold Star Foods sent the SUPER Co-Op a letter informing us that they will not be able to roll-over the existing commodity distribution contract (“brown boxes” and “fee for service” processed items) for 2006/07 SY; therefore, Santa Clarita Valley School Food Services Agency will be issuing a new RFP for Commodity Distribution for the 2006/07 school year.

In this issue:

• Editorial

• RFP for Distribution

• 2006/07 Processed Commodities' Prices

• Volume Discount Info on the Web

• ACDA

• Word from DJ

• Mini Manual

• END

Please e-mail me if you have any questions, comments or an article to share: pmatustik@scvsfsa.org

Processed Commodity and Non-Commodity Prices for 2006/07 SY

Based on the commitment letters from all of our 2005/06 approved processors, all of the existing contracts will be renewed for 2006/07 SY. The existing contract states:

15.  PRICING - TERM OF CONTRACT

Minimum contract term is one (1) year.  Quoted prices must stay in effect for one (1) year beginning on July 1, 2005, and may be extended upon mutual consent of the awarding Agency and vendor for an additional two (2) one year periods (total bid life of three years) in accordance with provisions contained in the California Education Code, Sections 17596 (K-12) and 81644 (Community Colleges).  A maximum price change not to exceed five percent (5%) or the change in the LA County CPI as published in the LA Times between May 15 and June 1 of each qualifying year may be negotiated subject to existing market conditions.  The request for a price change must be submitted in writing and include justification for the request no later than June 15^th of each qualifying year.  In the event of a general price decrease in the relative commodity marketplace or in the CPI, the awarding Agency reserves the right to revoke the bid award unless the decrease is passed on to the Agency and its authorized membership.

Other Resources

• 2006/07 Distribution RFP
• PIP Renewal Letter
• National Processing Resource Material for RA
• RA Procurement Guidance
• Mini Manual
• 2005/06 RFP's for processing

Volume Discounts On The Web

We asked and they delivered!  Amid some brouhaha regarding the volume discount (or as some call it – volume rebate) discussion, some of us asked our co-op administrator (DJ) if there is a way to make the whole process more transparent.  They responded and now all of that info. is available on the web (www.djcoops.com).  Please go there and check it out!

ACDA

ACDA (American Commodity Distribution Association) annual conference was held this year in Denver, CO (April 8 – 12).  This association was founded by the state distribution agencies and to this day the association is run by the DA’s.  The members are state agencies, commodity processors, brokers, distributors and recipient agencies (RA’s.)  Until recently there were only a handful of school district representatives and the truthfully the DA’s didn’t look at our presence very favorably.  Only four years ago the schools got a representative on the ACDA board and to this day the schools have only eight (8) votes during any business meeting – all other membership categories have one vote per company.  ACDA is important because it is the forum where major recommendations and decisions concerning commodities are made.  The USDA (they are not allowed to be a member – they are there in an advisory position) listens very carefully to ACDA recommendations. 

This is the reason why ACDA needs as many school districts as possible to participate in the proceedings – we don’t want others to make decisions about how the commodity business should be run.  Because of this, it was great to see that the SLICK Commodity Co-Op (Northern California) send four (4) food service directors to Denver.  Unfortunately, the SUPER was represented only by me (the conference trip was paid for by my employer).

Regardless of all of this, I was elected by the present school districts as the new RA’s representative on the ACDA Executive Board.  Also, I am serving as an RA’s representative on the ACDA Processing Committee – not only do we now have (for the first time ever) a school representative on this committee, but this is the group who makes the most important recommendations to the USDA about the future of the commodity processing.

Please read the Procurement Guidelines for RA and National Processing Resource Material for RA – two documents coming out of this committee.  I was involved with crafting of both of these documents.

Also, please consider joining ACDA and plan for the conference next year in Orlando, FL.

Word from DJ Co-Ops

Regarding produce offerings.

Workings of the SUPER Co-Op

(or “ins” and “outs” mini-manual)

There are two parts of which each co-op member should be aware of.  The first one is mandatory for each member who signed up to participate in the co-op.  The second part is voluntary and it should be each member’s decision to make.

I will try to explain both parts as well as I can; however, if there is still any doubt or any questions, please (please, please, pretty, pretty please) do not hesitate and send me an e-mail, or just pick up your phone and call me.  I am more than happy to help clarify and/or answer questions or concerns.

1. MANDATORY for every member.
   1. By signing the ‘Assignment of USDA Donated Food’ agreement you and your district agreed to become a member of the SUPER Co-Op, and at the same time you made the co-op lead agency (district) the guardian of your entitlement.  Your yearly commodity entitlement value is calculated by the CDE (California Department of Education) and it changes yearly based on your previous year’s lunch ADP.
   2. By joining the co-op you agree that your agency’s (district’s) commodities, which you decide to bring back to your warehouse, are delivered by a “private” distributor.  On behalf of its members, the co-op is regularly issuing RFP’s for commodities’ distribution (brown boxes only).  The distribution is done by regions (sub-co-ops) and it may happen that some regions are served by different distributors than others.  There is no switching allowed between the regions during the contract year.
   3. As the offerings of a variety of donated food(s) are announced by the USDA and confirmed by the CDE, you are offered your ‘fair share’ (the ‘fair share’ is based on your previous year’s lunch ADP as a percentage of the whole co-op) of the offering(s).  As soon as you are offered your ‘fair share’ you must make a couple of decisions:

                                                              i.      Are you going to accept the offering?  (You can take less than your ‘fair share’; you can ask for more than your ‘fair share’ and if someone else from the co-op declined, you may be able to get more; or you can decline the offering entirely. – YOU ARE THE ULTIMATE MANAGER of your entitlement spending).

                                                            ii.      If you accepted the offering, you must make a decision if you are sending your commodities for further processing or if you are going to receive them (through the co-op commodities distributor) to your warehouse?

4. The co-op is employing an outside administrator for managing the flow of commodities: offering to members, ordering, combining the truckloads, collecting the State administrative fee ($1/case) from members, paying State invoices (about $1,000,000/year) and helping to keep track of commodity balances at processors.  The administrator is also calculating, collecting and distributing any available volume discounts; however, it is your responsibility to make sure that the volume discounts are correct.  By signing the ‘Assignment of USDA Donated Food’ the member(s) agree to the administrative services. The administrator is paid for these services according to the contract.  This contract is based on the RFP issued by the lead agency and each co-op member is responsible for paying the appropriate fee.
1. VOLUNTARY for every member.
   1. The co-op lead district issues a set of RFP’s for commodity processing.  Every manufacturer who submits a proposal, in a timely manner and correctly completes all required forms, is approved to be on the co-op’s preferred vendors’ list.  It is up to the individual member to decide which manufacturer is going to be approved for their own operation.  That decision should be based on the individual district’s selection criteria (approved by the member’s Board of Trustees).  Also, the final processing decision should be approved by the member’s Board of Trustees.
   2. It is each member’s individual decision (hopefully done by following the federal, state and local procurement regulations) who their distributor will be for processed (finished) commodities.
   3. It is each member’s responsibility to make sure that s/he is charged the correct price for processing as well as for distribution.
   4. The executive board desires districts to remain in the Super Co-Op.  However, to benefit the participating districts, the membership is always only a one year commitment and may be withdrawn after the completion of each school year. Membership is automatically renewed unless withdrawal is requested in writing prior to November 1 for the following school year.
   5. It is each member’s responsibility to check their invoices and pay their bills in a timely manner.

(This is also available to you as a separate downloadable file.)

END

“All good things got to come to an end
The thrills have to fade
Before they come 'round again
The bills will be paid
And the pleasure will mend
All good things got to come to an end”
(Jackson Brown – All Good Things)