[Federal Register: October 14, 1999 (Volume 64, Number 198)] [Notices] [Page 55691-55692] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr14oc99-23] ----------------------------------------------------------------------- DEPARTMENT OF AGRICULTURE Commodity Credit Corporation Total Quality Systems Audit Implementation AGENCY: Commodity Credit Corporation, USDA. [[Page 55692]] ACTION: Notice of institution of ``Total Quality Systems Audit'' program for Commodity Credit Corporation food purchases. ----------------------------------------------------------------------- SUMMARY: Notice is hereby given that, the Commodity Credit Corporation (CCC) is phasing in the Total Quality Systems Audit (TQSA) program for CCC's purchases of food for humanitarian food assistance programs. This program is being implemented to ensure that CCC purchases meet customer requirements and needs. Vendors offering processed commodities covered by TQSA for sale to CCC will have to be approved under the TQSA standards which involve inspecting the vendor's quality control system and relying on that system to assure the quality of the end product. TQSA will reduce Government oversight of the commercial sector, but can increase confidence in the final product. The TQSA program is a fee- for-service program, and will be primarily administered for CCC by the Department of Agriculture's Farm Service Agency (FSA) through FSA's Warehouse Licensing and Examination Division, Kansas City Commodity Office. All vendors must consult individual procurement announcements to determine whether their commodity is subject to TQSA procedures. EFFECTIVE DATE: July 1, 1999. FOR FURTHER INFORMATION CONTACT: Dean Jensen, Chief, Contract Management Branch, Procurement and Donations Division, Farm Service Agency, U.S. Department of Agriculture, STOP 0555, 1400 Independence Avenue, SW, Washington, DC 20250-0551, telephone (202) 720-2115, fax (202) 690-1809; or Timothy Mehl, Chief, Warehouse Licensing and Examination Division, Kansas City Commodity Office, 9200 Ward Parkway, Kansas City, Missouri 64114, telephone (816) 926-6843, fax (816) 926- 1774. SUPPLEMENTARY INFORMATION: TQSA is a new method of identifying suppliers who are considered sufficiently responsible to supply foods for CCC food purchases. The program relies on audits by FSA of the vendor's quality control system. Those audits will be conducted against an established standard. Not all products procured under CCC food assistance programs will be evaluated using TQSA procedures. Vendors should consult the applicable commodity purchase announcement, invitation, Notice to the Trade, or contact the Kansas City Commodity Office to determine whether their product is covered. The audit program will be conducted in lieu of or will reduce the need for traditional full-scale end-item inspections where only the final product is checked for conformance to product specifications. Under TQSA suppliers are instead required to establish and maintain a quality management system that addresses all aspects of production. By auditing this quality management system, the absolute amount of Government oversight in this process can be substantially reduced while increasing confidence in the quality of the final product. The audit program will apply specific criteria that a supplier must meet to establish bidder eligibility. During an audit, the supplier's quality management system will be given a rating of ``meets,'' ``partially meets,'' or ``does not meet'' on multiple criteria. Once all required questions have been addressed by the vendor and the audit team, a score is generated which will provide FSA with a numerical rating. FSA will establish the minimum score necessary for bidder eligibility. If a supplier fails to meet this minimum, they will be considered ineligible to bid until the score is improved to an acceptable level. FSA will phase in TQSA requirements on a commodity by commodity basis, and vendors will be provided sufficient notification in order to meet TQSA requirements before TQSA compliance is incorporated in the applicable commodity contract terms. Also, by reducing Government oversight and approving vendors prior to awarding contracts, the costs associated with inspecting commodities procured for food assistance programs can be substantially reduced. Also, by decreasing the likelihood of product non-conformance and subsequent rejection, costs associated with reacquiring and replacing product are further reduced. These cost reductions benefit the food assistance programs by allowing higher quality products to be procured more economically. Annually, more than 825 million pounds of food products valued at approximately $850 million are purchased by CCC and distributed for use in domestic and international food assistance programs. CCC and its suppliers have spent over $5 million annually on inspection of those products. TQSA aims to reduce the cost of inspection by a minimum of 30-50 percent. During the initial months that a supplier is subject to TQSA requirements, they will be required to submit samples to the appropriate commodity testing laboratory for compliance testing. This requirement is intended to provide supplemental verification of program effectiveness and supplier compliance with TQSA. If deemed appropriate by the contracting office and TQSA staff, the required final product testing by a third party laboratory may be eliminated or reduced. The development of TQSA started in 1997, when CCC began a pilot program to develop a quality management program that would replace traditional end-item inspection. During the two years of the pilot program, FSA staff worked with members of academia, industry, and Government to develop the criteria and determine the effectiveness of the TQSA program. Prior to the implementation of the TQSA procedures, CCC relied almost entirely on end-item inspection to ensure that food purchased for domestic and international food asistance programs met the needs and requirements of the program recipients. Traditional statistical sampling methods and finished product testing gives little consideration to the conditions under which a product is produced, only to the characteristics of the final product. This approach only finds nonconforming product and allows it to be removed from the system, it does not prevent the nonconformance from occurring which avoids problems of non-detection that might apply where there was reliance on end-item inspection. TQSA is based on the proven premise that product conformance can be attained by allowing the supplier to define how production, delivery, and service are handled. USDA's role is to verify that the methods chosen are effective and meet applicable regulatory and contractual requirements, and that the supplier adheres to its stated policies and procedures. Signed at Washington, DC, on October 6, 1999. Keith Kelly, Executive Vice President, Commodity Credit Corporation. [FR Doc. 99-26802 Filed 10-13-99; 8:45 am] BILLING CODE 3410-05-P