Detailed Information on the
Commodity Purchase Services (Section 32) Assessment

Developing outcome-based annual and long-term performance measures, including baselines and targets that demonstrate progress towards a long-term programmatic outcome.

Developing, as part of the commodity purchase process, an economic analysis that considers the long-term effects of commodity purchases on over-production and over-supply.

Developing basic, uniform criteria for commodity diversion and surplus commodity purchases and completing action to correct management deficiencies identified through audit reviews.

Identify new and improved methods and processes for commodity purchases to strengthen program delivery.

Measure: Percentage of commodities purchased under surplus removal authority for three out of five successive years.

Explanation:The percentage of total commodities purchased under annual surplus removal for which there were several successive prior yearly surplus purchases. If a commodity was purchased under surplus removal authority in 3 out of the last 5 years, including the year being measured, then that commodity is included in the percentage. A higher percentage means a higher incidence of successive surplus purchases. (Excludes legislatively mandated buys.) Note: There was an unusually low percentage of successive purchases in 2005 due to a reduction in total surplus commodity purchases due to the Program s response to the President s request for hurricane relief support.

Measure: Percentage of commodities that were purchased under surplus removal in the current year plus one or two of the preceding years.

Explanation:The percentage of total annual surplus removal commodities for which there were several successive prior yearly surplus purchases. If a commodity was purchased under surplus removal authority in the current year and also in one or two of the preceding years, then that commodity is included in the percentage. A higher percentage means a higher incidence of successive surplus purchases. (Excludes legislatively mandated buys.) Note: There was an unusually low percentage of successive purchases in 2005 due to a reduction in total surplus commodity purchases due to the Program s response to the President s request for hurricane relief support.

Measure: Dollar administrative cost per bid received

Explanation:This measure is a cost-efficiency metric. It is the administrative costs for CPP divided by the number of bids received. Target years use budgeted costs for the administrative cost portion. CPP expects the costs to stabilize until WBSCM begins its implementation, at which point (approximately 2010), CPP expects to receive more bids due to WBSCM's making the process easier and to be able to process the bids more efficiently (and therefore, less costly) due to the system.

Is the program purpose clear?

Explanation: The program has three purposes identified in its authorizing statute, but lacks a rationale in support of these purposes. The program also lacks evidence of a design or methodology for determining diversion, normal channels of trade or commerce, or normal production for domestic consumption required by the statute. Instead, removal of surplus commodities is determined on a case-by-case, commodity-by-commodity basis which can distort the market, absent market based standards. In addition, each year AMS transfers the majority of the funds available to the program to the Food and Nutrition Service (FNS) to support the school lunch program. The basis of this transfer is unclear and the methodology for calculating this amount is not transparent.

Evidence: (7 U.S.C. 612c) Section 32 of the Act of August 24, 1935 states, "There is appropriated for each fiscal year beginning with the fiscal year ending June 30, 1936 an amount equal to 30 per centum of the gross receipts from duties collected under the customs laws during the period January 1 to December 31....Such sums shall be maintained in a separate fund and shall be used by the Secretary of Agriculture only to (1) encourage the exportation of agricultural commodities and products thereof...(2) encourage the domestic consumption of such commodities or products by diverting them, by the payment of benefits or indemnities or by other means, from the normal channels of trade and commerce.....; and (3) reestablish farmers' purchasing power by making payments in connection with the normal production of any agricultural commodity for domestic consumption. The sums appropriated under this section shall be devoted principally to perishable non-basic agricultural commodities (other than those receiving price support) and their products."

Does the program address a specific and existing problem, interest, or need?

Explanation: The Section 32 program was created to help stabilize the market through three broad objectives: to encourage export of agricultural commodities, to encourage domestic consumption of agricultural products, and to reestablish farmers' purchasing power by making payments in connection with the normal production of agricultural commodities. To address overproduction, the program uses Section 32 funds to purchase surplus commodities from the marketplace as a means of aligning supply and demand. As a secondary action, AMS donates these surplus commodities to domestic feeding institutions.

Evidence: USDA Press Release dated April 14, 2006. "USDA Announces Purchase of up to $5 million lamb roasts"

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: Although commodity purchases are made by other agencies within USDA as well as at the State and local level, no other program procures the non-price supported commodities that AMS purchases for nationwide distribution. The program has evolved to function cooperatively with other related USDA programs. Purchase planning is coordinated with the Farm Service Agency (FSA), FNS, and State agencies responsible for delivering meals through the National School Lunch Program (NSLP) and other Federal food and nutrition programs to identify outlets for the foods purchased.

Evidence: AMS is the only agency that purchases non-price supported commodities (in large-quantities and in storable form) and supplies them to domestic nutrition programs. FSA purchases price-support commodities for distribution domestically and internationally. FNS contracts with AMS to purchase non-price support commodities for the National School Lunch Program (NSLP) that do not meet market-support criteria and distributes funds directly to States and school districts so that they can purchase specific foods in smaller quantities or in further-processed form.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: A lack of uniform or basic criteria for surplus commodity purchases represents a fundamental programmatic design flaw. While there is an economic analysis for each commodity purchase, the analysis does not do so in the context of long-term planning that would reduce the need for consistently high levels of purchases. Instead, the program functions to create incentives for over-production of commodities, and thereby serves to distort the market for these goods. In addition, the NSLP is a mandatory program and it is unclear what benefit is derived from having the funds transferred from the Section 32 account to FNS as opposed to from the Treasury's General Fund. The program has established new long-term and annual measures to monitor requests for subsequent year pruchases and plans to assist the industry find alternative solutions.

Evidence: In instances where the program has repeatedly purchased from the same groups year after year, the program could inadvertently be encouraging poor planting and planning decisions. Currently, the program purchases whatever commodities are in surplus and the industries have responded by continuing to over plant for the benefit of the government purchases. AMS monitors the reliance of commodity producing groups on surplus removal buys over time, and plans to institute mechanisms that will encourage and/or assist producers in identifying problems and finding alternatives to continued requests for assistance with purchases. However, currently no mechanisms exist.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The program procures agricultural commodities for the Child Nutrition program's National School Lunch program (schools and ultimately schoolchildren are the beneficiaries) and purchases surplus commodities for donation to domestic food assistance programs that serve low income groups (homeless shelters and senior citizen centers are the intended beneficiaries). AMS purchases commodities and contracts with industry partners to deliver orders for FNS through the National School Lunch program. While this action does not contribute to the program's underlying purpose, AMS demonstrates timeliness and efficiency when procuring commodities for FNS. Surplus commodity purchases help to temporarily restore farmer's purchasing power and increase the domestic consumption of agricultural commodities, but do so in the context of a government sponsored subsidy. This action can contribute to the unintended consequence of farmer's planting solely for the benefit of government purchasing activity. As a result, repeated purchases of the same commodity should be closely monitored to reduce the possibility of influencing planting decisions.

Evidence: AMS specialists work with potential vendors and FNS to develop specifications for each product that will be purchased. AMS assesses market conditions and determines the availability and anticipated prices of commodities. AMS also works with FNS to determine recipient preferences.

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: According to PART guidance the program must have at least two, outcome based long-term performance measures (in some cases output proxy measures may be acceptable). The program has one long-term measure: (1) percentage of commodities purchased under surplus removal authority for three out of five successive years. This output measure tracks repeated commodity purchases over several years which may provide an indication of chronic oversupply among certain commodities.

Evidence: This measure will be reflected in the new AMS Strategic Plan (scheduled for revision beginning in 2006). The program cannot receive credit for this question because it has only developed one acceptable long-term measure. Additional long-term measures are necessary to obtain further credit.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: CPP has developed baselines and with targets for the measure identified in response to Question 2.1. This measure will become operational in 2006.

Evidence: The program's target for the successive purchasing measure is a 4% reduction in the percentage of commodities purchased under surplus removal authority for three out of the past five successive years by 2010 (from a baseline of 39% in 2004 to a goal of 35% in 2010). Once additional long-term measures have been developed, baselines and targets in support of these measures can be developed.

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The program has developed the following annual measure: 1.) the percentage of commodities that were purchased under surplus removal in the current year and either one or two of the preceding years (this annual output measure is related to the long-term surplus removal measure). In addition, the program monitors several other indicators that are used track the program's purchasing efficiency such as the percentage of on-time delivery of products purchased for the NSLP and the percentage of products purchased in accordance with FNS specifications. On-time delivery and compliance with purchasing specifications should be as close to 100 percent as possible, therefore they are not - strictly speaking - PART-approved efficiency measures; however they are important indicators for internal program management.

Evidence: The program's new annual measure will be included in the agency's new strategic plan, scheduled for revision beginning in 2006. PART guidance requires, and the program will need to develop, additional annual measures that tie to long-term measures and support the underlying purpose of the program.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: The targets for the program's surplus commodity measure are to reduce the percentage of commodities that were purchased under surplus removal authority in the current year and either one of the two preceding years by 4% in 2010 (from a baseline of 41% in 2004 to a goal of 37% in 2010). It remains unclear though whether these targets are sufficiently ambitious. Like the long term measure, this annual measure is an output (measuring repeated purchasing activity as opposed to a long-term outcome preferred by PART guidance.

Evidence: The program has developed a baseline and annual targets for the measure described in Question 2.3. This measure is explained in the measures section and includes a baseline and targets extended to 2010.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The process of reviewing and improving specifications for commodities is a collaborative effort, with active participation from many parties. For example, AMS, FSA, and FNS have partnership agreements that spell out the roles of each agency in the procurement and delivery process, and vendor contracts provide for appropriate pricing, quality, and timely delivery. Per PART guidance, the program must receive a "No" in response to this question because it does not have acceptable annual and long-term performance measures.

Evidence: AMS procurement staff engages in outreach efforts to educate the industry about contract requirements, vendor application procedures, and how to sell to USDA. Contractors meet evolving program goals, including requirements involving food security and food safety. Under the Federal Acquisition Regulation (FAR), vendors must be deemed "responsible" prior to participating in the program. Requirements are spelled out in the AMS Commodity Specification Approval Process, Performance Based Contracting Standards, Contract Compliance Mechanisms, and partnership agreements.

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The program lacks an independent evaluation that meets the criteria established in PART guidance. There appears to be no evidence of independent reviews that meet the scope, objectivity, independence, and regularity criteria required by guidance.

Evidence: There is currently no program evaluation plan or schedule of program evaluations and program documentation describing the type of evaluation, including scope and quality, required by PART guidance. To receive a "Yes" in response to this question, the program must have evaluations that meet all of the following criteria: high in quality, sufficient in scope, unbiased, independent, and conducted on a regular basis. Certain aspects of the program have been reviewed previously. In January 2005, USDA's OIG reported the results of an audit that was highly critical of AMS contract and competitive bidding practices (Report No. 01601-1-KC). In September 2005, USDA's OIG reported the results of an audit that was critical of management controls to ensure compliance with purchase specifications for ground beef (Report No: 01099-31-HY).

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The CPP program budget request lacks an integrated budget and performance presentation that makes clear the impact of funding, policy, or legislative decisions on expected performance of the program (including both direct and indirect cost reporting).

Evidence: FY 2006 Explanatory Notes, USDA's Performance Accountability Report (PAR). Currently, the program lacks an integrated budget and performance presentation that makes clear the impact of funding, policy, or legislative decisions on expected performance.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: Based upon the information provided, it is difficult to assess how effective the program has been at measuring progress towards accomplishing its underlying goals or correcting deficiencies that are preventing the program from achieving its underlying programmatic goals.

Evidence: PART guidance states that a "Yes" requires the program to provide evidence that demonstrates action taken to develop of a limited number of specific, ambitious annual and long-term performance measures that demonstrate progress toward achieving long-term goals.

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Other than asserting that the program regularly collects timely and credible performance information, the program has provided no evidence of the process for collecting performance information, the type of information that it collects, or how this information is used to improve the program's performance. A September, 2005 audit of AMS' management controls for the purchase of ground beef found that although AMS has the authority to suspend suppliers who deviate from program requirements, the agency took no corrective action against suppliers with recurring deviations, numerous commodity complaints, and products that tested positive for prohibited pathogens. These audit findings demonstrate that AMS received, but did not act upon, credible performance information from program partners. AMS is responsible for procuring commodities donated to Federal food assistance programs administered by the Food and Nutrition Service (FNS), such as the National School Lunch Program (NSLP), Child and Adult Care Food Program, and Summer Food Service Program. The products purchased by AMS are provided to children, the elderly and needy families. AMS is responsible for ensuring that the products it procures meet the purchase specifications and that suppliers comply with eligibility requirements. CPP is in the process of implementing OIG recommendations which will strengthen management controls to detect and prevent the purchase of contaminated ground beef and identify potential collusive bidding activities when procuring commodities. In response to the audit findings, AMS is in the process of upgrading its ground beef purchase oversight, implementing a statistical process evaluation, and strengthening its management control procedures to ensure that ground beef is purchased from qualified suppliers, meets quality standards, and is free of pathogens, and that potential collusive bidding is identified, reported, and reviewed.

Evidence: USDA OIG Audit (Report No: 01099-31-HY). PART guidance states that a "Yes" answer needs to explain and provide evidence of each of the following: the program regularly collects high-quality performance data, including data from key program partners, relating to program goals; the program uses that information to adjust program priorities, allocate resources, or take other appropriate management actions; the program considers the performance of the program partners as well when assessing progress on key program activities; and the program has collected the baseline performance data necessary to set meaningful, ambitious performance targets. OIG recommendations with respect to ground beef (Report No. 01099-31-Hy) and potential collusive bidding practices (Report No. 01601-1-KC) will be implemented by September 30, 2006. Three audit finding remain outstanding. With regard to the remaining three OIG recommendations, AMS believes: (i) it has an adequate process to evaluate repetitive violations but is considering possible measures to provide a reasonable assessment of overall supplier performance (consistent with FAR); (ii) it has adequate controls to ensure that contracts are only awarded to eligible suppliers (the OIG recommendation was based on a one-time occurrence at program initiation); and (iii) it has fully implemented requirements and processes that address all other issues raised. Program procurement employees were trained by Department of Justice attorneys to identify collusive bidding behavior by vendors. CPP will provide evidence that it has implemented all of the management decisions contained in the audit reports to receive credit for action taken in regard to the OIG recommendations.

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: A recent USDA OIG audit (#1 citation in evidence) found that AMS did not exercise its contractual authority to suspend suppliers with recurring non-conformances, commodity complaints, and positive pathogen test results. This lapse occurred because AMS did not have a process for accumulating, summarizing, reviewing, and analyzing cumulative data to assess a suppliers' overall performance to determine continued eligibility. In addition, AMS did not establish criteria for determining when repeat violations warranted additional corrective actions. These audit findings illustrate how the absence of performance standards can make it difficult to hold program partners accountable for their performance. As a result, plants with a history of non-conformance remained in the AMS Commodity Program and were awarded additional contracts to produce ground beef products for use in the NSLP and other Federal nutrition programs. In addition, another recent audit (#2 citation in evidence), found that AMS needs to strengthen internal controls that are necessary to hold staff as well as program partners accountable for cost and performance results. The audit found that AMS does not use any automated software mechanism to evaluate historical vendor bid data by commodities for patterns of potential antitrust violations and collusive bidding activity. This evidence indicates the need for several program changes to ensure the program identifies managers who are responsible for achieving key program results; establishes clearly defined or quantifiable performance standards for those managers; and establishes specific performance standards for program partners when program partners contribute to the achievement of programmatic goals to meet the standard for a "Yes" as required by guidance. To date, there is no evidence of an AMS supplied food-related disease outbreak.

Evidence: USDA OIG Audit (Report No: 01099-31-HY) and USDA OIG Audit (Report No. 01601-1-KC). PART guidance states that a "Yes" answer needs to clearly explain (and provide evidence) for how the program accomplishes each of the following: identifies managers who are responsible for achieving key program results, establishes clearly defined or quantifiable performance standards and accountability for those managers, and establishes specific performance standards and accountability for program partners when program partners contribute to the achievement of program goals. AMS is in the process of implementing recommendations contained in both of the audits cited in evidence.

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: Funds are obligated consistently with the overall program plan to ensure that a limited amount of unobligated funds remain at the end of the year; the program establishes a schedule for obligating funds that corresponds to the overall level of funding available for commodity purchasing; and adequate procedures exist for reporting actual expenditures, comparing them against the intended use, and taking timely and appropriate action to correct audit findings when funds are not spent as intended.

Evidence: AMS Commodity Purchase Services has financial controls to track the availability of funds, reimbursements, and expenditures and adheres to requirements set forth by the Office of the Chief Financial Officer and the Foundation Financial Information System (FFIS). The AMS budget office allocates funds to program management who are responsible for obligating funds in a timely manner and verifying entries into the accounting system as required by the agency's Funds Control Directive. Each quarter, the budget office reviews the program's appropriation, spending, and balances and provides reports of the status of funds to program management and the AMS Administrator. These actions track the appropriation and obligation of funds. The program plan with regard to unobligated funds permits year end carryover balances to be available for commodity purchases. Unobligated balances are often caused by authorizations which have not materialized. However, the use of unobligated balances helps prevent the program from over obligating resources and becoming anti-deficient.

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The program's current efficiency measure deals with the how timely and at what cost the government can procure agricultural commodities. The program has one approved efficiency measure: 2) administrative costs ($) per bid received. The costly and time consuming process for procuring commodities led AMS to develop a web-based system - WBSCM, to streamline the ordering and delivery process and reduce procurement cost. The WBSCM system will result in a significant process cycle time improvement, from the current 24 days to eventually 5 days. Additionally, administrative cost per bid has decreased from approximately $4,500 in FY03 and FY04 to slightly over $4,000 in FY05. CPP expects the costs to stabilize at approximately $4,300 until WBSCM begins its implementation, at which point CPP expects processing bids will be less costly due to the system.

Evidence: It is important that the program has developed an efficiency measure, but this measure indicates that commodity purchasing is a time consuming and costly program to administer. Until the web-based procurement system has been developed, the program should develop additional ways to increase efficiency in program operations - and reduce administrative cost.

Does the program collaborate and coordinate effectively with related programs?

Explanation: AMS, FNS, and FSA work closely together to coordinate the ordering, procurement, delivery, and payment for purchased commodities. AMS also works with food inspection agencies to ensure the safety of commodities purchased. In addition, AMS works with State, local, and private programs to ensure effective collaboration and coordination.

Evidence: MOU#12-25-MU-292, "USDA Domestic Food Donation Programs Memorandum of Understanding" dated June 11, 1992 (establishing each agency's responsibilities). AMS, FNS, and FSA use a common computer system to buy, inventory, manage, and track delivery of commodities to national food programs. The agencies are in frequent contact with each other to coordinate activities and carry out their respective responsibilities. An oversight committee composed of senior management from AMS, FNS, and FSA ensure coordination of agency functions.

Does the program use strong financial management practices?

Explanation: USDA accounting system (FFIS), a system that meets statutory requirements and which uses appropriate documentation procedures for entries into the accounting system. Financial information is timely and accurate. AMS also holds program management accountable for the financial status of their programs through internal agency directives. A recent USDA OIG Audit found that AMS does not use automated software to evaluate historical vendor bid data by commodity for patterns of potential antitrust violations and also does not perform in-depth trend analysis of historical data necessary to identify indications of collusive bidding activities. The agency concurs with the audit recommendations and is in the process of implementing the audits findings.

Evidence: USDA OIG audit (Report No: 01601-01-KC) entitled, "Agricultural Marketing Service Contract and Competitive Bidding Practices" was performed to assess the sufficiency of the Agricultural Marketing Service's (AMS) internal controls to prevent and detect potential collusive bidding activities and whether identified activities or complaints were properly referred to the Office of Inspector General (OIG) or the U.S. Department of Justice (DOJ). The audit contained four recommendations: 1) coordinate with the Farm Service Agency (FSA) to develop and implement an automated computer software package to analyze historical vendor bid information to determine potentially collusive bidding practices, 2) develop an automated computer software package that can adequately analyze historical vendor bid information to determine collusive bidding practices if a shared system with FSA is not feasible, 3) develop and implement internal procedures for reviewing, analyzing, and reporting commodity bids for indications of collusion to make antitrust enforcement an ongoing feature of AMS commodity procurement activities, and 4) develop a training program to alert staff to the signs of antitrust activities and to stress the importance of preventing and detecting collusion, particularly collusive bidding practices amongst vendors and AMS contractors. In response to the audit, AMS has completed a joint AMS-FSA review of a shared software package to facilitate potential leads as to collusive commodity bidding practices and plans to implement these capabilities in the new WBSCM system being developed and developed and implemented a training program to alert new marketing specialists to potentially collusive bidding activity. AMS has worked diligently with FSA and has made progress in implementing audit recommendations; however, implementation of the web-based procurement system is several years away and procedures need to be developed to address potentially collusive bidding activity in the near-term. CPP is in the process of implementing audit findings and will provide evidence when all of the management decisions contained in the audit reports are implemented.

Has the program taken meaningful steps to address its management deficiencies?

Explanation: A recent USDA audit determined that adequate management controls were not in place and functioning to ensure that ground beef was purchased from qualified suppliers and met quality standards. Specifically, the audit found shortcomings with AMS' accountability over products contaminated with microbes, corrective actions, and its sampling procedures, all of which are examples of weaknesses within AMS' management control system. To receive consideration for a "Yes" to this question, CPP will provide evidence when all of the recommendations contained in the OIG audit have been fully implemented.

Evidence: USDA OIG Audit (Report No: 01099-31-HY). PART guidance states that a "Yes" answer needs to clearly explain and provide evidence that the program: has a system for identifying and correcting program management deficiencies and uses the system to make necessary corrections within agreed upon timeframes. According to the guidance, a program that does not review program management activities and make corrections to eliminate identified deficiencies would receive a "No". AMS is in the process of implementing recommendations contained in the audit related to ground beef purchase specifications such as upgrading ground beef purchase oversight, implementing a statistical process evaluation, and is strengthening its management control procedures to ensure that ground beef is purchased from qualified suppliers.

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The program is instituting a long-term measure to show progress in surplus removal. While this long-term measure is new, CPP has data that provides an indication of progress to date, on the basis of which it has set baselines and future targets. Per PART guidance, the program must receive a "No" in response to this question because it does not have an adequate number of long-term measures that support the purpose of the program and work toward long-term programmatic goals.

Evidence: The program's long-term measure looks to assess the reduction in commodities purchased under surplus removal authority for three out of the past five successive years (from a baseline of 39% in 2004 to a goal of 35% in 2010).

Does the program (including program partners) achieve its annual performance goals?

Explanation: The program has developed the following acceptable annual measure: 1.) the percentage of commodities that were purchased under surplus removal in the current year and either one or two of the preceding years (this annual output measure is related to the long-term surplus removal measure). The program also monitors on time delivery of purchased commodities and percentage of commodities purchased that meet FNS specifications, these are internal program management indicators, not acceptable annual performance measures according to the PART guidance.

Evidence: According to PART guidance the program must receive a "No" in response to this question because it does not have adequate annual performance measures.

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The program's current efficiency measure deals with the how timely and at what cost the government can procure agricultural commodities. The program has the following efficiency measure: 1) administrative costs ($) per bid received. The costly and time consuming process for procuring commodities led AMS to develop a web-based system, WBSCM to streamline the process and reduce administrative cost. The WBSCM system will result in a significant process cycle time improvement, from the current 24 days to eventually 5 days. Additionally, administrative cost per bid has decreased from approximately $4,500 in FY03 and FY04 to slightly over $4,000 in FY05. CPP expects the costs to stabilize at approximately $4,300 until WBSCM begins its implementation, at which point CPP expects processing bids will be less costly due to the system.

Evidence: It is important that the program has developed an efficiency measure, but this measure indicates that commodity purchasing is a time consuming and costly program to administer. Until the web-based procurement system has been developed, the program should develop additional ways to increase efficiency in program operations - and reduce administrative cost.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: The program receives a "Small Extent" in recognition its unique role in commodity procurement at the National level, but this score also reflects the fact that the program's current activities may not address its underlying purposes in an efficient and cost effective manner.

Evidence: The program fulfills a unique role for the Federal Government. The Section 32 program is the only nationwide mechanism for the purchase and distribution of non-price supported commodities for schools and domestic feeding institutions (homeless shelters, senior citizen facilities). The purchase of price-supported commodities is carried out by other agencies within USDA. Though, not on a nationwide basis, purchasing of commodities occurs at the State and local level as well.

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Recent USDA OIG audits have reviewed the program's bidding practices and procedures as well as the program's procedures for ensuring compliance with specifications for purchasing ground beef for use on the NSLP. Both audits were critical of the agency's management controls and systems in place to ensure compliance with procedures. However, no independent evaluation has been conducted for the program as a whole.

Evidence: USDA OIG Audit (Reports No: 01099-31-HY & 01601-01-KC) & GAO -03-530.