BESB_Final_Appendix_E


APPENDIX E. Compliance Re: Statewide Vending Machine Contract for Food and Beverages (PSA 99-541).
*Contract Section*	*Page*	*Requirement/Option*	*Status*
Vend Prices + Price Changes	3	Unit vend prices enumerated in Attachment C to remain fixed for at least one year; requests to increase/decrease unit vend prices must be submitted in writing to BESB for approval	Same prices are still in effect
Products Vended	3	BESB is to receive detailed product listings of all items to be vended, updated annually, and subject to BESB's review and approval	BESB has not received new lists since the start of the contract, although at least one new product is being offered by the contractor.
Financial Reports and Audits	4	After close of fiscal year, contractor to provide (1) detailed sales report by month within 30 days and (2) copy of financial statements and schedules audited by independent CPA within 75 days; BESB can audit financial records that apply to agreement any time during term of agreement during normal business hours	(1) BESB receives sales reports within 15 days for locations it receives the commissions from -- BESB does not get information on schools (2) BESB received audit for FY 02 in December 2002; audits for prior years were never prepared BESB has never audited any of the contractor's financial records -- occasionally asks for meter slips and spot checks those against printed reports
Refund Policy	4	Contractor must establish/maintain prompt refund policy, which shall become part of agreement, and provide copy to BESB for approval	BESB considers refund description contained in the contract to be the policy
Insurance + Continuous Coverage	4	Contractor must maintain workers comp and general liability insurance >$1 million and furnish certificate of insurance on anniversary date	BESB receives a copy of the certificate every year
Subcontracting + Personnel	5+8	Contractor cannot assign, transfer, or sublet any location without written permission from BESB All subcontractors must be approved by BESB prior to beginning work	BESB maintains list of approved subcontractors -- it does not require specific information about a company before approving them, relying instead on contractor to recommend reliable subcontractors; BESB has not prepared written evaluations of the contractor or any subcontractors -- BESB may send written inquiry to contractor if a problem occurs
Location Termination	5	BESB can terminate current or future locations with 30+ days notice, if blind operator will manage and operate machines	No locations have been terminated under this provision
Non-Compliance	5-6	If BESB advises in writing that contractor is not conducting operations in accord with agreement, contractor will have 30 days to rectify conditions -- if not rectified at that time, BESB may terminate PSA on 30 days written notice to contractor	BESB has never given the contractor written notification of conditions not in accord with the contract
Changes to the Machine Population	6	Contractor to notify BESB of the addition/loss of existing or new machines or locations	BESB makes initial contact for new location -- contractor submits paperwork with identification numbers for any machines installed/removed but details regarding schools are not reported to BESB
Performance Bond	6	Contractor must provide initial performance surety of $630,000 (based on estimated annual commission value), which shall be reviewed and updated annually by BESB and contractor	BESB does not know the current status of the performance surety
General + Machines + Sales Counters	7	Contractor must provide new or like new vending machines in locations agreeable to customer, BESB, and contractor -- machines shall be ADA accessible and equipped with financial and product audit functions	Contractor has provided new machines -- BESB checks on machines when it is in the field and estimates a majority of existing locations it receives commissions from have been visited; occasionally BESB staff are present at installation of a machine
Identification Sticker/BESB	7	Each machine is to bear a prominent sticker (the design of which was approved by BESB) indicating portion of profit provides opportunities for blind people in Connecticut	Several attempts have been made to produce a sticker design acceptable to BESB, but none has been approved yet -- current emphasis is on a new design for the machine fronts
Maintenance + Repairs	7	All vending machines are to be kept clean, sanitary, and in good operating condition	BESB indicated it has received no complaints from any location about cleanliness -- staff check on this when they are in the field
Service Refills	8	Machines are to be refilled as needed, with the frequency based on sales demand and determined jointly by BESB and the contractor	BESB relies on contractor and subcontractors to determine frequency that machines are refilled -- if BESB receives complaint about empty machine, it contacts the contractor
Commission Payments	8	Contractor must electronically remit commission payments monthly by 15^th day of the following month	At start of contract, payments made by check -- since 2001, most payments made electronically; payments have been late multiple months -- December 2001 consulting report commissioned by BESB found payments an average of 10 days late throughout the first 11 months of 2000
Delinquent Commissions + Late Penalties and Interest	8	Late commission payments are cause for terminating the contract, and are subject to a 10% penalty plus 1½% interest per month	BESB has never assessed the contractor a penalty or charged interest for late payments
Sales Reports	8	Detailed sales reports must be submitted by the 15^th day of the month, preferably in an electronic format acceptable to BESB	BESB said reports received on time, but consultant review of first 11 months of 2000 indicated reports were an average of 10 days late -- contractor began submitting electronic reports in October 2002
Key Account Manager	9	An account manager is to be assigned to serve as liaison to BESB -- during start-up period, person will be assigned to BESB's central office	Same individual has been account manager since start of contract -- he was on-site when contract began
Attachment B item 4	10	Vending training to be conducted for BEP blind operators and staff at least twice a year	Contractor provides occasional technical assistance upon request
Attachment B item 5	10	BEP to obtain vending machines free or at cost for life of contract and receive repair assistance for BESB owned equipment	BESB receives machines at no charge
Attachment B item 6	10	Vending machines are to be installed on schedule or site will receive day's worth of beverages free	All installations have been on schedule
Attachment B item 7	10	Contractor to provide marketing support and analysis for BEP blind managed or operated locations	Representatives of contractor visit sites operated by blind vendors and make suggestions regarding product placement and operations
Attachment B item 8	10	Contractor to provide standard, discounted rate for manager/operator run locations	Contractor provides discounted rate
BESB = Board of Education and Services for the Blind BEP = Business Enterprise Program PSA = personal service agreement Sources of data: PSA 99-541, program review committee staff interviews with BESB staff, and DiSanto Bertoline & Company, P.C., Board of Education and Services to the Blind Consulting Report, December 31, 2000.