48 CFR Part 470 — Commodity Acquisitions

PART 470—COMMODITY ACQUISITIONS Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c). Source: 89 FR 81015, Oct. 7, 2024, unless otherwise noted. 470.000 Scope of part. This part sets forth the policies, procedures and requirements governing the procurement of agricultural commodities by the Department of Agriculture for use: (a) Under child nutrition programs such as the National School Lunch Program, The Emergency Food Assistance Program, Commodity Supplemental Food Program, Food Distribution Program on Indian Reservations, and any other domestic food assistance program. (b) Under Title II of the Food for Peace Act (7 U.S.C. 1721 et seq. 470.101 Definitions. The following definitions are applicable to this subpart: Commingled product Foreign Agriculture Service (FAS) Free alongside ship (f.a.s.) Grantee organization et seq. Ingredient Last contract lay day Lowest landed cost Multi-port or multi-trip voyage charter 470.102 Policy. (a) Policy. (b) Electronic submission. (c) Freight. 470.103 United States origin of agricultural products. (a) Products for use in international food assistance programs. (1) Produced in the United States; and (2) Commercially available in the United States at fair and reasonable prices from domestic sources. (b) Products for use in domestic food assistance programs. (1) Produced in the United States; and (2) Commercially available in the United States at fair and reasonable prices from domestic sources. (c) Commingled product. (2) To the extent USDA has determined a commodity is one that is generally commingled but is also one which can be readily stored on an identity preserved basis with respect to its country of origin, USDA may require that the commodity procured shall be of 100 percent United States origin. (d) Product derived from animals. 470.201 Acquisition of commodities and freight shipment for Foreign Agricultural Service (FAS) programs. (a) Lowest landed cost and delivery considerations. (2) USDA may contact any port prior to award to determine the port's cargo handling capabilities, including the adequacy of the port to receive, accumulate, handle, store, and protect the cargo. Factors considered in this determination may include, but not be limited to: The adequacy of building structures, proper ventilation, freedom from insects and rodents, cleanliness, and overall good housekeeping and warehousing practices. USDA may consider the use of another coastal range or port if a situation exists at a port that may adversely affect the ability of USDA to have the commodity delivered in a safe and timely manner. Such situations include: (i) A port is congested; (ii) Port facilities are overloaded; (iii) A vessel would not be able to dock and load cargo without delay; (iv) Labor disputes or lack of labor may prohibit the loading of the cargo onboard a vessel in a timely manner; or (v) Other similar situation that may adversely affect the ability of USDA to have the commodity delivered in a timely manner. (3) Use of other than lowest landed cost. In order to ensure that commodities are delivered in a timely fashion to foreign destinations and without damage, the contracting officer may award an acquisition without regard to the lowest land cost process set forth in paragraph (a)(1) of this section if: (i) The solicitation specifies that the lowest land cost process will not be followed in the completion of the contract; or (ii) After issuance of the solicitation, it is determined that: (A) Internal strife at the foreign destination or urgent humanitarian conditions threatens the lives of persons at the foreign destination; (B) A specific port's cargo handling capabilities (including the adequacy of the port to receive, accumulate, handle, store, and protect commodities) and other similar factors may adversely affect the delivery of such commodities through damage or untimely delivery. Such similar factors include, but are not limited to: Port congestion; overloaded facilities at the port; vessels not being able to dock and load cargo without delay due to conditions at the port; labor disputes or lack of labor may prohibit the loading of the cargo onboard a vessel in a timely manner; and the existence of inadequate or unsanitary warehouse and other supporting facilities; (C) The total transit time of a carrier, as it relates to a final delivery date at the foreign destination may impair the timely delivery of the commodity; (D) Other similar situations arise that materially affect the administration of the program for which the commodity or freight is being procured; or (E) The contracting officer determines that extenuating circumstances preclude awards on the basis of lowest-landed cost, or that efficiency and cost-savings justify use of types of ocean service that would not involve an analysis of freight. However, in all such cases, commodities would be transported in compliance with cargo preference requirements. Other types of services may include, but are not limited to, multi-trip voyage charters, indefinite delivery/indefinite quantity (IDIQ), delivery cost and freight (C & F), delivery cost insurance and freight (CIF), and indexed ocean freight costs. (4) If the contracting officer determines that action may be appropriate under paragraph (a)(3) of this section, prior to the acceptance of any applicable offer, the contracting officer will provide to the Head of Contracting Activity or Designee a written request to obtain commodities and freight in a manner other than on a lowest landed cost basis consistent with title 48 of the CFR. This request shall include a statement of the reasons for not using lowest landed cost basis. The HCA, or the designee one level above the contracting officer, may either accept or reject this request and shall document this determination. (b) Multiple offers or delivery points. (c) Freight shipping and rates. (2) Freight rates offered must be submitted as specified in the solicitation issued by USDA or, if applicable, the grantee organization. Any such solicitation issued by a grantee organization must contain the following elements: (i) If directed by USDA, include a closing time for the receipt of written freight offers and state that late written freight offers will not be considered; (ii) Provide that freight offers are required to have a canceling date no later than the last contract lay day specified in the solicitation; (iii) Provide the same deadline for receipt of written freight offers from both U.S. flag vessel and non-U.S. flag vessels; and (iv) Be received and opened prior to any related offer for acquisition of commodities to be shipped. (3) USDA may require organizations that will receive commodities from USDA to submit information relating to the capacity of a U.S. port, or, if applicable, a terminal, prior to the acquisition of such commodities or freight. (d) Freight rate notification. 470.202 Acquisition of commodities for United States Agency for International Development (USAID) programs. (a) Lowest landed cost and delivery considerations. (2) USDA may contact any port prior to award to determine the port's cargo handling capabilities, including the adequacy of the port to receive, accumulate, handle, store, and protect the cargo. Factors which will be considered in this determination will include, but not be limited to, the adequacy of building structures, proper ventilation, freedom from insects and rodents, cleanliness, and overall good housekeeping and warehousing practices. USDA may consider the use of another coastal range or port if a situation exists at a port that may adversely affect the ability of USDA to have the commodity delivered in a safe and/or timely manner. Such situations include: (i) A port is congested; (ii) Port facilities are overloaded; (iii) A vessel would not be able to dock and load cargo without delay; (iv) Labor disputes or lack of labor may prohibit the loading of the cargo onboard a vessel in a timely manner; or (v) Other similar situation that may adversely affect the ability of the Department to have the commodity delivered in a timely manner. (3) In order to ensure that commodities are delivered in a timely fashion to foreign destinations and without damage, USDA may complete an acquisition without regard to the lowest land cost process set forth in paragraph (a)(1) of this section, if: (i) The solicitation specifies that the lowest land cost process will not be followed in the completion of the contract; or (ii) After issuance of the solicitation, it is determined that: (A) Internal strife at the foreign destination or urgent humanitarian conditions threatens the lives of persons at the foreign destination; (B) A specific port's cargo handling capabilities (including the adequacy of the port to receive, accumulate, handle, store, and protect commodities) and other similar factors will adversely affect the delivery of such commodities without damage or in a timely manner. Such similar factors include, but are not limited to: Port congestion; overloaded facilities at the port; vessels would not be able to dock and load cargo without delay; labor disputes or lack of labor may prohibit the loading of the cargo onboard a vessel in a timely manner; and the existence of inadequate or unsanitary warehouse and other supporting facilities; (C) The total transit time of a carrier, as it relates to a final delivery date at the foreign destination may impair the ability of USDA to achieve timely delivery of the commodity; or (D) Other similar situations arise that materially affect the administration of the program for which the commodity or freight is being procured. (4) If the contracting officer determines that action may be appropriate under paragraph (a)(3) of this section, prior to the acceptance of any applicable offer, the contracting officer shall provide to the HCA or Designee and to USAID, a written request to obtain commodities and freight in a manner other than on a lowest landed cost basis. This request shall include a statement of the reasons for not using lowest landed cost basis. The HCA or Designee one level above the contracting officer, with the concurrence of USAID, shall, on an expedited basis, either accept or reject this request and shall document this determination in writing and provide a copy to USAID. (b) Freight shipping and rates. et seq. (2) USAID may require, or direct a grantee organization to require, an ocean carrier to submit offers electronically through a Web-based system maintained by USDA. If electronic submissions are required, USDA may, at its discretion, accept corrections to such submissions that are submitted in a written form other than by use of such Web-based system. (c) Delivery date. (d) Multiple awards or delivery points. (2) The contracting officer may determine that extenuating circumstances preclude awards on the basis of lowest landed cost. However, in all such cases, commodities may be transported in compliance with cargo preference requirements as determined by USAID. (3) The contracting officer shall notify USAID or, if applicable, the grantee organization, that its shipping agent will be notified of the vessel freight rate used in determining the commodity contract award. The grantee organization or USAID will be responsible for finalizing the charter or booking contract with the vessel representing the freight rate so used. 470.203 Cargo preference. An agency having responsibility under this subpart shall administer its programs, with respect to this subpart, in accordance with regulations prescribed by the Secretary of Transportation.

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