My readers are aware board and staff have had issues with companies underbidding on federal contracts to deliver fluid milk to Pennsylvania food banks and other distribution centers. Underbidding means that these companies have bid at a price lower than the Pennsylvania minimum wholesale price for the type of milk offered for sale at the time the bid solicitation closes. An underbid also means that there isn’t a “level playing field” for all companies undertaking the process.
We have been working with USDA for about 18 months to coordinate efforts to minimize underbidding. USDA automatically offers contracts to the lowest bidders. Theoretically, if all bidders use the Pennsylvania minimum wholesale prices, all bids should be the same. When asked how this situation is handled, USDA informed us that a random selection of the award winner is utilized.
USDA agreed to align solicitations for fluid milk to coincide better with the dates we post new minimum prices for the following month. We agreed to develop a system that would provide information to USDA’s eligible milk vendors in a timely fashion, committing to a 48-hour maximum turnaround time. The information would consist of a spreadsheet providing legal bid prices for types of milk requested in the solicitation by Pennsylvania Milk Marketing Area.
Five people out of our small staff of 13 devote time to this process, beginning with me. I stop whatever I am doing at the moment to develop the spreadsheet, which can be a very time-consuming process depending on the number of Pennsylvania delivery sites in the solicitation.
The spreadsheet then goes to an auditor, who reviews the solicitation and matches delivery sites with what I recorded to make certain they are all included.
The legal discount and bid minimum prices are reviewed by our special investigator, who then passes the spreadsheet on to our auditor supervisor for a final review of all figures and calculations.
Finally, our chief counsel reviews the entire spreadsheet and sends it to a large email distribution list that includes both in-state and out-of-state vendors. It is also posted on our website.
We have been employing this process since early February 2022. I will also mention that I sent two letters via postal mail to all USDA-eligible vendors, one in February and one in March of last year, outlining the conditions of the law, where they could find information about bidding on our website, and how to contact me if they had questions.
Since that time, there have been two violations, early on in the process, which were resolved in quick fashion — I believe I wrote about those.
Now, here is the déjà vu all over again part.
Even though numerous and regular solicitations have been responded to with information dissemination since we began working with USDA, and even though we have consistently offered our assistance to anyone needing it, there have been a few additional violations. If there has ever been a disappointing situation, this is one.
We appreciate that there are circumstances in both big and small companies that could cause a violation to occur. Companies have provided explanations to us about what happened to cause the violation. We respect their circumstances but follow through with our obligation to enforce the law. We also continue to have a good working relationship with these companies.
Source: lancasterfarming.com
Categories: Pennsylvania, Livestock, Dairy Cattle