07 VENDOR AGREEMENTS

(1) The Department utilizes a retail purchase food delivery system in which participants obtain approved foods by transacting vouchers at local WIC vendors. The WIC vendor must comply with federal regulations and the policies and procedures found in the WIC Vendor Handbook. The Department is not obligated to pay for any voucher accepted by a vendor who was not authorized at the time of the voucher was accepted. (2) A potential WIC vendor must be a grocery store or pharmacy as defined in 1200-15-2-.01, Definitions, which operates at a permanent fixed location. Each such location requires a separate vendor agreement. Apart from initial authorization, a grocery store must also be actively participating in, and currently conducting, Food Stamp Program transactions in accordance with the regulations in 7 CFR Part 278 before authorization by the Department as a WIC vendor. Any authorized WIC vendor, participating in the WIC Program as of January 1, 2004, who does not meet these requirements shall have up to six (6) months to comply. Failure to comply shall result in termination of the WIC Vendor Agreement. The Program requires a WIC vendor, at both initial and subsequent authorizations, not be under a disqualification or civil money penalty issued by the Food Stamp Program, another State WIC Agency, or the Tennessee WIC Program, unless denying such authorization would create an undue hardship for participants attempting to transact vouchers. Such decision related to hardship shall rest solely with the Department per 7 CFR Part 246.18(a)(1)(iii)(B) which prohibits the WIC vendor’s right to appeal. The Department does not require pharmacies to participate in the Food Stamp Program. If, however, a pharmacy was previously disqualified from the Food Stamp Program or is currently authorized and it has been issued a civil money penalty, it must inform the Department when applying for authorization as a WIC vendor. (3) A potential vendor may apply by submitting a completed and signed Vendor Application for Authorization to Participate in the Tennessee WIC Program to the designated Program staff person in the appropriate region. Pharmacies receive written notification of waived requirements. Initial applications may be submitted at anytime. (4) An incomplete or inaccurate application shall be returned within fifteen (15) calendar days of its receipt, unless the only item missing is the Food Stamp Authorization, which has been applied for but not received. The application shall be processed, but the vendor shall not be authorized until a copy of the Food Stamp Authorization has been provided. If the potential vendor does not resubmit a corrected application within fifteen (15) calendar days from receipt of the return letter, the application shall be considered denied. Receipt of the return letter shall be presumed to occur within three (3) business days of the date of mailing unless undeniable proof of later receipt is presented. If a resubmitted application is returned two (2) additional times for being incomplete or inaccurate, it shall be considered denied. In each instance, when an application has been denied, a new application shall not be accepted for six (6) months from the date of the denial. (5) A potential vendor must demonstrate good business integrity, based on facts known by the Department and representations made on the application. Unless denying authorization as a vendor would create a hardship for participants’ vouchers to be redeemed, if any owner, officer, or manager has been convicted of or had a civil judgment entered against them within the previous six (6) years for any activity indicating a lack of business integrity, the application shall be denied. (6) The Department has established appropriate criteria, including those described in paragraph (7) below, to use in the decision to determine authorization of a vendor. The potential vendor may not ask the Department for a hearing or administrative review regarding the appropriateness of these criteria, which include, but are not limited to: competitive price and price limitations, minimum variety and quantity of approved foods, business integrity, status of Food Stamp Program authorization, the majority of annual total gross sales being in staple food, and a history of Food Stamp Program transactions (except for initial authorization). However, the vendor may appeal a decision to deny authorization as a vendor as described in section 1200-15-2-.10, Appeals and Administrative Reviews. Pharmacies are exempt from the staple food requirement. (7) The application is subject to verification of the minimum stock requirement, competitive prices with other vendors of similar size in a peer group, and a positive compliance history with sanitation authorities. If the minimum stock is not available and/or competitive prices can not be verified during the Vendor Representative’s first visit to the store’s location, there will be a second unannounced visit within fifteen (15) calendar days. If the minimum stock requirement and/or verification of competitive prices are still not met, the application will be considered denied and a new application will not be accepted again for six (6) months from the date of the denial. Pharmacies are exempt from minimum stock and competitive pricing requirements. (8) The Department may not authorize a potential vendor if it determines that the previous ownership has sold the store in order to circumvent a WIC sanction. This includes selling to a relative by blood or marriage or to any individual or organization for less than the fair market value. The subsequent buyer cannot be authorized as a vendor, unless such sale was conducted as an arms length transaction. (9) The final decision to approve or deny the application will be made within sixty (60) days from the date of receipt of the completed application. (10) Once approved, the store must execute a WIC Vendor Agreement with the Department. The vendor will be authorized to accept vouchers fifteen (15) days following the completion of WIC training provided by the Department. The training must be attended by an owner or an owner’s authorized designee. (11) At least one person representing the vendor must participate in annual training. (12) The WIC Vendor Agreement will be terminated if the Department determines the vendor provided false information in connection with its application. (13) The Department may reassess any authorized vendor at any time during the current WIC Vendor Agreement period using the vendor selection criteria in effect at the time of the reassessment. The agreement for a vendor that does not meet the selection criteria must be terminated as stated in 7 CFR Part 246.12(h)(3)(xxiv) and the WIC Vendor Agreement. (14) The WIC Vendor Agreement does not constitute a license or a property interest. If the vendor wishes to continue to be authorized beyond the period of its current agreement, the vendor must reapply for authorization. (15) The WIC Vendor Agreement shall be terminated if the vendor is disqualified from the Program. (16) The Department must provide the vendor with as much advance notice as possible regarding changes to federal and State Program statutes, rules, and regulations, before implementing such changes. (17) The Department will provide not less than fifteen (15) calendar days advance written notice of expiration prior to the expiration date of the WIC Vendor Agreement. The vendor must apply for reauthorization prior to this expiration date. However, neither the Department nor the WIC vendor has an obligation to enter into a new agreement. The Department shall consider the vendor’s satisfactory compliance with the previous agreement before making its’ decision. (18) The vendor may not ask the Department for an administrative review regarding either the expiration of the WIC Vendor Agreement or the appropriateness of the current criteria used by the Department at the time of reauthorization as stated in 7 CFR Part 246.18(a)(1)(iii) and the WIC Vendor Agreement. (19) During the term of the WIC Vendor Agreement, either the Department or the WIC vendor may terminate for cause, after providing not less than fifteen (15) calendar days advance written notice. Authority: T.C.A. §§4-5-202, 4-5-204, and 68-1-106. Administrative History: Original rule filed June 20, 1985; effective July 20, 1985. Repeal and new rule filed August 24, 2000; effective November 7, 2000. Repeal and new rule filed February 8, 2002; effective April 24, 2002. Amendment filed July 1, 2004; effective September 14, 2004.