Resource | Policy Memos | FD-137
Alternative Value Pass-Through System Pilot Project under the Department of Defense Fresh (DoD Fresh) Program

The revised policy memo requires supplemental reporting from processors and requires state verification of credits provided by the processor to the SFA. Processors wishing to continue participation in the pilot will have to sign the attached revised NPA amendment to extend their participation in the pilot.

Resource | Policy Memos | FD-134
Minimum Inventory Protection Requirements for Processors Participating in the National Processing Program

FNS is committed to rigorous oversight and controls over USDA Foods processing to ensure that state agencies and school food authorities (SF As) receive the full benefit of the USDA Foods entitled to them, consistent with 7 CFR Part 250. As such, the National Processing Agreement requires that participating processors must furnish to USDA inventory protection in the form of a surety bond, an irrevocable letter of credit, or an escrow account in order to guarantee that the processor will account for, return, or pay for all of the USDA Foods received or carried forward, either as physical or book inventory. The purpose of this memorandum is to inform processors of minimum inventory protection requirements effective beginning in School Year 2014-2015.

Resource | Policy Memos | FD-127
Approval of End Products and Monitoring of End Product Sales

The purpose of this policy memorandum is to clarify a state distributing agency's (SDA) responsibilities regarding (1) the approval of end products for processing; and (2) monitoring of sales of such end products to school food authorities (SF A) in the National School Lunch Program (NSLP) by reviewing a processor's monthly performance report. Further guidance in monitoring a processor's USDA Food inventory is included in Policy Memoranda FD-064 and FD-122. These two memoranda relate specifically to reducing a processor's excessive inventory and tracking negative inventories.

Resource | Policy Memos | FD-122
Substitution of Donated Foods in Advance of Purchase and Negative Inventories

In accordance with 7 CFR 250.30(1), a processor may. in most cases, substitute Department of Agriculture (USDA) donated foods with commercially purchased foods of U.S. origin, and of equal or better quality in all USDA purchase specifications than the donated food. The substitution option permits processors to conduct their business efficiently and provide finished end products to school food authorities (SFAs) and other recipient agencies in a timely manner. Substitution of donated foods usually occurs after USDA purchase and delivery of the donated food to the processor, or after USDA purchase but before actual receipt of the donated food shipment In either case, the processor may sell commercial products or finished end products to any of its customers, while passing through the value of the donated food to SFAs. 

Resource | Policy Memos | FD-119
Soliciting Bids from Commercial Distributors for End Products

The procurement of goods and services in the National School Lunch Program (NSLP) must be conducted in a manner that ensures free and open competition, in accordance with Federal regulations under 7 CFR Part 3016 or 7 CFR Part 3019, as applicable, and must also comply with procurement requirements in 7 CFR 210.21. This is true for procurement of both commercial food products and end products produced through the further processing of USDA donated foods (hereinafter referred to as "end products"). In most cases, school food authorities (SFAs) solicit bids for procurement of commercial food products from commercial distributors and, in a separate solicitation, solicit bids for procurement of end products from processors, even when identical food products are sold commercially through distributors. In this policy memorandum, we clarify that the SFA may, in some cases, include bids for procurement of end products in its solicitation for procurement of commercial food products from commercial distributors, rather than conduct two separate solicitations. This policy memorandum also clarifies the requirements, and the parties responsible for ensuring compliance with requirements, in exercising such option. Although the memorandum focuses on SFA procurements in NSLP, it is also applicable to procurements conducted by recipient agencies in other child nutrition programs. 

Resource | Policy Memos | FD-061
Inbound Cheese to Further Processors (Revised)

On July 1, 2006, FNS implemented Policy Memorandum FD-061: Inbound Cheese to Further Processors, in order to alleviate the administrative burden on processors and State Distributing Agencies (SDAs) in continually reallocating pounds to individual recipient agencies (RAs) based on the variation between the published target truck weight and the actual pounds delivered by the USDA vendor. This policy memorandum revises the original FD-061.

Resource | Policy Memos | FD-040
Commodity Inventory Reduction at Further Processors

This policy memo addresses commodity book inventory reduction at further processors. 

Resource | Policy Memos | FD-008
Establishing Processor Inventory Weight for Random Weight Commodities

Frequently, there are considerable differences between this weight and the actual weight for the truckload as shown on the Notice of Shipment or the bill of lading. While we have no specific knowledge that this is occurring with other random weight commodities, we believe that a uniform policy should be developed to ensure that recipient agencies receive full credit for commodities provided to the processor.

Resource | Policy Memos | FD-004
Procedures for Accounting for Rework

This memorandum establishes the procedure for accounting for rework in the further processing of donated foods.

Resource | Policy Memos | FD-005
Procedures for Reimbursing Offshore Transportation Costs of Processed Foods

This memorandum establishes the policy and procedures to compensate offshore destinations for the marine shipping costs associated with further processed end products. Offshore destinations are defined as those state agencies that are not located in the 48 contiguous United States.