1. (a) The Texas Department of Human Services (DHS) handles, stores, and distributes donated foods according to 7 Code of Federal Regulations §250.14.
2. (b) When DHS contracts for the handling, storage, and distribution of donated foods, DHS will solicit by request for proposal (RFP) and award contracts according to 7 Code of Federal Regulations §250.14(d). DHS requests RFPs in accordance with state and federal procurement standards.
3. (c) DHS has contracted for a commercial warehousing and distribution system. Recipient agencies must operate under the commercial warehousing and distribution system, unless they qualify for direct shipments of donated food as specified in subsections (d)-(f) of this section.

4. (d) For an individual recipient agency to qualify for direct shipments of United States Department of Agriculture (USDA)-donated commodities, the recipient agency must:

   1. (1) enter into a written agreement with DHS to receive direct shipments of donated food;
   2. (2) accept delivery of a single product in a quantity of no less than one truckload. DHS will allocate the food USDA makes available to Texas on a "fair-share" basis; a fair share that is less than one-half a truckload will be rounded to zero and a fair-share that is at least one-half of a truckload will be rounded to a truckload;
   3. (3) have storage facilities for dry, chilled, and frozen products;
   4. (4) meet USDA and DHS requirements for receiving and storing commodities, including requirements for sanitation, odor control, and temperature;
   5. (5) ensure availability of storage facility staff to schedule appointments and receive shipments throughout the year, including summer and holidays;
   6. (6) provide DHS with three months advance notice when ordering or changing orders for commodities;
   7. (7) provide DHS with four months advance notice before changing a direct shipment destination;
   8. (8) process and submit receiving orders (ONRRs) to DHS daily;
   9. (9) comply with the requirements issued by USDA, Food and Consumer Services (FCS), in FNS Instruction 709-5, titled "Shipment and Receipt of Food," and comply with other requirements for receiving and storing commodities as specified by DHS;
   10. (10) allow USDA, DHS, and their representatives to inspect and monitor warehousing operations and to conduct inventories and audits;
   11. (11) provide to DHS, during the warehouse approval process, a copy of a current health inspection certificate for the warehouse facility;
   12. (12) maintain a physical and book inventory of all commodities;
   13. (13) maintain records for processed foods according to DHS specifications;
   14. (14) retain DHS-required records for three years and 90 days after the date the contract ends or, if applicable, until all litigation, claims, and audits are resolved;
   15. (15) submit all reports required by DHS;
   16. (16) accept all scheduled shipments, regardless of the shipment or loading method;
   17. (17) have sufficient warehouse space to accommodate all inbound freight; and
   18. (18) assume responsibility for all commodities in the recipient agency's care and control, including financial responsibility and bearing the risk of loss, damage, and theft.

5. (e) For a cooperative representing recipient agency schools, such as school co-ops, to qualify for direct shipments of USDA-donated commodities, the co-op must:

   1. (1) meet the requirements for individual recipient agencies specified in subsection (d) of this section;
   2. (2) provide to DHS a copy of a legal agreement, signed by representatives of each recipient agency and meeting the requirements of state laws governing interlocal cooperation contracts;
   3. (3) agree to use DHS specifications to equitably allocate USDA-donated commodities to each member of the school co-op;
   4. (4) follow DHS specifications for submitting worksheets for ordering commodities;
   5. (5) maintain for each recipient agency in the school co-op an ongoing planned assistance level (PAL) balance and to report it monthly, as specified by DHS;
   6. (6) provide proof of purchase of "all risk" escalating insurance with coverage equal to or greater than the cost value of commodities on hand at any time or, as a condition of ongoing eligibility, provide proof that such insurance remains in effect; and
   7. (7) meet local, state, and federal requirements for temperature and sanitation when delivering commodities.

6. (f) For an organization, association, or a combination of two or more non-school, recipient agencies, such as a non-school co-op, to qualify for direct shipments of USDA-donated commodities, the non-school co-op must:

   1. (1) meet the requirements for individual recipient agencies specified in subsection (d) of this section;
   2. (2) agree to use DHS specifications to equitably allocate USDA-donated commodities to each member of the non-school co-op;
   3. (3) follow DHS specifications for submitting worksheets for ordering commodities;
   4. (4) provide proof of purchase of "all risk" escalating insurance with coverage equal to or greater than the cost value of commodities on hand at any time or, as a condition of ongoing eligibility, provide proof that such insurance remains in effect; and
   5. (5) meet local, state, and federal requirements for temperature and sanitation when delivering commodities.

Source Note:The provisions of this §377.107 adopted to be effective June 9, 1989, 14 TexReg 2540; amended to be effective August 1, 1991, 16 TexReg 3871; amended to be effective February 1, 1992, 17 TexReg 125; amended to be effective January 1, 1993, 17 TexReg 8736; amended to be effective September 1, 1995, 20 TexReg 5800; amended to be effective February 1, 1996, 21 TexReg 331; transferred effective April 1, 2004, as published in the Texas Register July 2, 2004, 29 TexReg 6359.