Vendor Selection and Authorization


  1. 1. Number and Distribution of Authorized Vendors
  2. 2. Vendor Application Periods
  3. 3. Vendor Selection and Authorization
  4. 4. Vendor Peer Groups
  5. 5. Vendor Agreements

1. Number and Distribution of Authorized Vendors

  1. The State agency uses limiting criteria to limit the number of vendors it authorizes:
    • Yes - Checked
    • No
  2. If yes, check the type of criteria used:
    • Vendor/participant ratio - Checked
    • Vendors/local agency or clinic ratio
    • Vendors/local service area or county ratio
    • Vendors/geographic area (e.g., number per mile, city block, zip code)
    • Vendor/State agency staff ratio
    • Other (specify):

ADDITIONAL DETAIL: Vendor Management Appendix reference Illinois Administrative Code Title 77 Chapter X Part 672.200. Further citations will appear as VMC 672.200. and/or Procedure Manual (cite):

2. Vendor Application Periods

  1. The State agency considers applications:
    • On an on-going basis - Checked
    • Annually
    • Every two years
    • Every three years
    • Other (specify):

ADDITIONAL DETAIL: Vendor Management Appendix VMC 672.205 and/or Procedure Manual (cite):

3. Vendor Selection and Authorization

  1. The vendor selection criteria used to select vendors for program authorization include:
    • A competitive price criterion based on: - Checked
      • Vendor applicant price lists - Checked
      • WIC redemption data - Checked
      • A State agency standard drawn from a price survey - Checked
      • A standard drawn from another source - Checked
      • Other (specify): Derived maximum values for individual food items.
    • A minimum variety and quantity of supplemental foods criterion that is: - Checked
      • Statewide - Checked
      • Peer group specific
      • Other (specify): City of Chicago/ rest of the State.
    • A business integrity criterion that includes: - Checked
      • No history, during the past six years, among the vendor's owners, officers, or managers of criminal convictions or civil judgments for activities listed in 7 CFR 246.12(g)(3)(iii) - Checked
      • No history of other business-related criminal convictions or civil judgments - Checked
      • Lack of previous WIC sanctions - Checked
      • Lack of a current Food Stamp Program disqualification or civil money penalty for hardship - Checked
      • Other (specify): Proof of "Good Standing " for out of state corporations.
    • A requirement to obtain infant formula only from sources included in the State agency's list of State licensed infant formula wholesalers, distributors, and retailers, and manufacturers registered with the U.S. Food and Drug Administration - Checked
    • Stock a full range of foods in addition to WIC supplemental foods
    • A location necessary to ensure adequate participant access - Checked
    • Redemption of a minimum number/volume of food instruments
    • Satisfactory compliance with previous vendor agreement - Checked
    • Certification by an approved State or local health department
    • Proof of authorization as an FSP retailer, including FSP authorization number
    • Hours of operation which meet State criteria (specify):
    • Other criteria (specify):
    • Not applicable (explain):
  2. Explain how the State agency uses the competitive price criteria identified in item 3a to select vendors for authorization.
    Vendor prices must come in below the average for City of Chicago or the rest of the state as appropriate plus 25%. The 25% increase serves to level the entry field for small stores.
    1. The State agency exempts from competitive price criteria pharmacies that provide only exempt infant formula or WIC-eligible medical foods to participants?
      • Yes - Checked
      • No
    2. The State agency has exempted non-profit WIC vendors (other than health or human services agencies that provide food under contract with the State agency) from competitive price criteria.
      • Yes
      • No - Checked
  3. The State agency authorizes vendors that derive more than 50 percent of their annual food sales from WIC transactions (i.e., above-50-percent vendors):
    • Yes
    • No - Checked
    • If "Yes," please respond to the following:
      (1) How many above-50-percent vendors are currently authorized (include all above-50-percent vendors and not just WIC-only vendors)?
      (2) Does the State agency allow above-50-percent vendors to provide incentive items? Yes No
      If yes, does the State agency require above-50-percent vendors to obtain prior State agency approval to provide incentive items to WIC participants? Yes No
  4. On-site preauthorization visits are conducted to verify information received during the application process:
    • For vendors at initial authorization
      • By SA - Checked 
      • By LA
    • For all vendors at authorization/reauthorization
      • By SA
      • By LA
  5. The State agency routinely verifies with the FNS field office information provided by vendor applicants regarding the status of their Food Stamp Program retailer authorization.
    • Yes - Checked 
    • No

ADDITIONAL DETAIL: Vendor Management Appendix VMC 672.210b and/or Procedure Manual (cite):

4. Vendor Peer Groups

If the State agency does not have a vendor peer group system, respond to item 4a and sub-items (1), (2), and (3), and then proceed to item 5.

  1. The State agency has received an exemption from the vendor peer group system requirement:
    • Yes
    • No - Checked
    • (1) If "yes," the State agency's exemption was based on documentation that showed that (check the applicable box):
      • The State agency had no above-50-percent vendors; or
      • Above-50-percent vendors accounted for less than five percent of the total WIC redemptions.
    • (2) Based on the latest available data for the current fiscal year (which covers the period from October 1 2005, to September 30, 2006) the State agency:
      • Does not have any above-50-percent vendors; - Checked 
      • Paid above-50-percent vendors _ percent of the total annual WIC redemptions to date.
    • (3) If the State agency does not use a vendor peer group system, describe the State agency's alternative system for comparing the prices of new vendor applicants and currently authorized vendors and selecting for authorization or reauthorization vendors that offer the program the most competitive prices.
  2. Vendors are assigned to peer groups for selection/authorization:
    • Yes - Checked 
    • No
  3. Vendors are assigned to peer groups for reimbursement purposes:
    • Yes - Checked 
    • No
  4. Peer groups are based on the following (check all that apply):
    • WIC sales volume
    • Gross food sales volume
    • Number of cash registers - Checked 
    • Square footage of store
    • Type of store
    • Location of store
      • Local agency service areas
      • City, county or regional divisions - Checked 
      • Urban/suburban/rural
      • Zip codes
      • Unique economic location (e.g., rural island, single metro area)
      • Other (specify):
    • Other (specify):
  5. Using the chart on the next page, describe the peer groupings (e.g., supermarkets, medium and small grocery stores, convenience stores, etc.) that the State agency plans to use during the upcoming fiscal year. (If additional space is needed, please attach the description following the format of the chart on the next page and indicate its location in the State Plan: Appendix Our peer group system uses the number of lanes (cash registers) and region . Pharmacies and Catholic Charity Food Centers are considered a separate type for which the number of registers is not applicable.)

DESCRIPTION OF VENDOR PEER GROUP SYSTEM

No. (1) Description Number of Vendors in Peer Group Comparable Vendors
(e.g., supermarkets, chain stores, pharmacies) (2) Regular Vendors (3) Above-50% Vendors (4) Total (5) Peer Group Number (6)
1 1-2 lanes 324 0 324
2 3-4 lanes 173 0 173
3 5-7 lanes 174 0 174
4 More than 8 lanes 443 0 443

Instructions:

Column 1 - Assign a sequential number to each peer group.

Column 2 - Describe the vendors in the peer group.

Column 3 - Insert the number of authorized vendors that are regular vendors.

Column 4 - If the State agency authorizes above-50-percent vendors, insert the number of above-50-percent vendors currently authorized.

Column 5 - Insert the total number of authorized vendors. This number should be the sum of columns 3 and 4, since the State agency must identify each vendor as being either a regular vendor or an above-50-percent vendor.

Column 6 - For each peer group that contains above-50-percent vendors, insert the number of the peer group that contains comparable regular vendors. The comparable vendor peer group is the peer group that the State agency uses to derive the competitive price criteria and maximum reimbursement levels that it applies to the above-50-percent vendors. If above-50-percent vendors are placed in a peer group with regular vendors, then the number in column 1 should be the same as that in column 6. If above-50-percent vendors are in separate peer groups, then the number in column 1 will be different from that in column 6.

  1. How does the State agency assess the effectiveness of its peer group system?
    The State agency makes this assessment
    • Annually - Checked 
    • Biennially
    • Every three years
    • Other (please specify)

5. Vendor Agreements

  1. The following reflect the State agency's vendor agreement practices:
    • All vendors have a written agreement with the State agency - Checked 
    • A standard vendor agreement is used statewide - Checked 
    • Vendor agreements are subject to the State's procurement procedures
    • Vendor agreements/handbooks are subject to the State's Administrative Procedures Act
    • A nonstandard vendor agreement is used for:
      • Military commissaries
      • Pharmacies that only provide exempt infant formula and/or WIC-eligible medical foods
      • All pharmacies
      • Home food delivery contractors
      • Mobile stores
      • Other (specify):
    • Vendors are authorized for a period of 1 years - Checked 
    • Vendors are authorized/reauthorized under renewable agreements, provided no vendor violations occurred during the previous vendor agreement period - Checked 
    • All vendors are provided at least 15 days advance written notice of the expiration of the vendor agreement - Checked 
    • Other (specify):
  2. In addition to the requirements in 7 CFR 246.12(h)(3)-(h)(6), the vendor agreement includes:
    • Periodic submission of vendor price lists. If so, specify frequency Prior to initiation of the contract and via statisically valid random samples of Peer Groups throughout the contract year.
    • Maintenance of records in addition to the required inventory records. If so, specify types of records: reference VMC 672.425 l.
    • Submission of food instruments within a shorter timeframe than required by program regulations. If so, specify timeframe:
    • Redemption of a minimum number/volume of food instruments
    • Minimum hours of operation
    • Other (specify):
  3. The State agency delegates the signing of vendor agreements to its local agencies:
    • Yes - Checked 
    • No
    • If yes, provide a description of the supervision and instruction provided to local agencies to ensure the uniformity and quality of this activity.
    • Please attach a copy of the Vendor Agreement or provide the appropriate Procedure Manual reference below.

ADDITIONAL DETAIL: Vendor Management Appendix VMC 672. all parts and Retail Vendor Contract. and/or Procedure Manual (cite):