80_FR_48444 80 FR 48289 - Request for Information: SNAP and WIC Seeking Input Regarding Procurement and Implementation of Electronic Benefit Transfer (EBT) Services; Extension of Comment Period

80 FR 48289 - Request for Information: SNAP and WIC Seeking Input Regarding Procurement and Implementation of Electronic Benefit Transfer (EBT) Services; Extension of Comment Period

DEPARTMENT OF AGRICULTURE
Food and Nutrition Service

Federal Register Volume 80, Issue 155 (August 12, 2015)

Page Range48289-48292
FR Document2015-19794

The Food and Nutrition Service (FNS) is interested in identifying ways to stimulate increased competition in the Electronic Benefit Transfer (EBT) marketplace and identify procurement or systems features that are barriers to new entrants. FNS is also seeking suggestions which will improve procurement of the delivery of EBT transaction processing services through modifications to, or replacement of, the existing business model. The procurement and implementation of EBT systems by State agencies administering the Supplemental Nutrition Assistance Program (SNAP) and Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) needs to be sustainable for all parties involved. The landscape of EBT is in a heightened state of change, due in part to the recent decision by one of three primary companies providing EBT transaction processing services for SNAP and WIC to no longer solicit or accept any new prepaid card business, including for SNAP and WIC EBT services. In addition, there are numerous EBT projects moving toward the October 1, 2020, statutorily-mandated deadline for WIC Program implementation. This Request for Information (RFI) seeks to obtain input from EBT stakeholders and other financial payment industry members and interested parties, regarding options and alternatives available to improve the procurement and current operational aspects of EBT. In this document, FNS has posed various questions to prompt stakeholder responses. We intend to consider and follow up on the alternatives and suggestions that appear to be most viable from both a technical and a cost/benefit standpoint. Interested stakeholders are invited to respond to any or all of the questions that follow, and to identify issues which may not be listed. FNS is extending the comment period to provide additional time for interested parties to review this Request for Information.

Federal Register, Volume 80 Issue 155 (Wednesday, August 12, 2015)
[Federal Register Volume 80, Number 155 (Wednesday, August 12, 2015)]
[Notices]
[Pages 48289-48292]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-19794]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

[FNS-2015-0013]


Request for Information: SNAP and WIC Seeking Input Regarding 
Procurement and Implementation of Electronic Benefit Transfer (EBT) 
Services; Extension of Comment Period

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Notice; Extension of Comment Period.

-----------------------------------------------------------------------

SUMMARY: The Food and Nutrition Service (FNS) is interested in 
identifying ways to stimulate increased competition in the Electronic 
Benefit Transfer (EBT) marketplace and identify procurement or systems 
features that are barriers to new entrants. FNS is also seeking 
suggestions which will improve procurement of the delivery of EBT 
transaction processing services through modifications to, or 
replacement of, the existing business model. The procurement and 
implementation of EBT systems by State agencies administering the 
Supplemental Nutrition Assistance Program (SNAP) and Special 
Supplemental Nutrition Program for Women, Infants, and Children (WIC) 
needs to be sustainable for all parties involved.
    The landscape of EBT is in a heightened state of change, due in 
part to the recent decision by one of three primary companies providing 
EBT transaction processing services for SNAP and WIC to no longer 
solicit or accept any new prepaid card business, including for SNAP and 
WIC EBT services. In addition, there are numerous EBT projects moving 
toward the October 1, 2020, statutorily-mandated deadline for WIC 
Program implementation.
    This Request for Information (RFI) seeks to obtain input from EBT 
stakeholders and other financial payment industry members and 
interested parties, regarding options and alternatives available to 
improve the procurement and current operational aspects of EBT. In this 
document, FNS has posed various questions to prompt stakeholder 
responses. We intend to consider and follow up on the alternatives and 
suggestions that appear to be most viable from both a technical and a 
cost/benefit standpoint.
    Interested stakeholders are invited to respond to any or all of the 
questions that follow, and to identify issues which may not be listed.
    FNS is extending the comment period to provide additional time for 
interested parties to review this Request for Information.

DATES: The comment period for the notice that was published on June 23, 
2015 (80 FR 35932) has been extended from August 24, 2015 to October 
24, 2015. To be assured of consideration, comments must be received on 
or before October 24, 2015.

ADDRESSES: Comments may be submitted through the Federal eRulemaking 
Portal at www.regulations.gov. Follow the online instructions for 
submitting comments electronically. Comments can also be mailed or 
delivered to: Andrea Gold, Director, Retailer Policy and Management 
Division, Supplemental Nutrition Assistance Program, Food and Nutrition 
Service, U.S. Department of Agriculture, 3101 Park Center Drive, Room 
424, Alexandria, Virginia 22302.
    All comments submitted in response to this notice will be included 
in the record and will be made available to the public at 
www.regulations.gov. Please be advised that the substance of the 
comments and the identity of the individuals or entities commenting 
will be subject to public disclosure.

FOR FURTHER INFORMATION CONTACT: Andrea Gold, Director, Retailer Policy 
and Management Division, Supplemental Nutrition Assistance Program, 
(703) 305-2434, or via email at andrea.g[email protected].

SUPPLEMENTARY INFORMATION:

Background

    All SNAP State agencies and some WIC State agencies conduct EBT 
using magnetic stripe cards similar to debit or credit cards. Almost 
all EBT systems today are integrated such that all of the service 
requirements are provided within a single system to the relevant State 
agencies, often referred to as a turnkey system. Over the years, some 
States have obtained SNAP EBT services by contracting for individual 
EBT service components to one or more service providers (such as 
authorization platform, retailer management, transaction switching, 
client help desk services, and card production). A few State agencies 
have performed certain EBT services themselves, to control costs or 
meet the needs of State operations. These State-operated services may 
include such functions as transaction authorization, retailer training 
and management, EBT card distribution, and management and customer 
service.
    In the WIC Program, several of the State agencies use smart card or 
chip

[[Page 48290]]

card systems, sometimes referred to as off-line systems, while others 
have chosen an on-line system using a magnetic stripe reader. The trend 
in WIC, for State agencies choosing both mag-stripe and smart card 
solutions, is toward contracted EBT services via a turnkey processor.
    Contractors compete for State EBT business in a comparatively small 
marketplace. FNS has long encouraged healthy competition in this 
marketplace because the Agency believes it helps to control costs, 
ensures a level playing field for businesses who are interested in 
supporting EBT delivery processes, and encourages innovation. Two of 
the biggest concerns for FNS and State agencies with the limited 
competition within the EBT market, are the increased risk for 
sustainability of the industry over time, and the impact limited 
competition could have on pricing.
    Up until most recently, in the SNAP EBT environment, there have 
been three dominant primary EBT contractors with State agency EBT 
contracts. In the WIC EBT environment, these same three on-line EBT 
SNAP contractors have also provided EBT on-line services for WIC. There 
are also two other off-line EBT contractors for WIC.
    In January 2014, one of the primary contractors announced that the 
firm would no longer solicit or accept any new prepaid card business, 
which includes their EBT services. The firm is in the process of 
fulfilling its existing contracts but is not pursuing any further 
business in this area. As a result, only two of those three active 
primary EBT contractors remain in the market. There has been a new 
entrant to the SNAP market, a company that has been active in the WIC 
market; however, at this time, it is unclear whether any other firms 
will choose to enter this market. State agencies have acquired EBT 
service through one of two major approaches: Procurements dedicated to 
a single State agency, and multi-state procurements. The latter 
approach leverages pricing through economies of scale and standardizes 
requirements and contract provisions in a way that can reduce the 
burden on contractors of responding to separate contract solicitations 
by many State agencies. Typical contracts have a base period such as 5 
years with several optional extension years, but there are situations 
where State procurement rules dictate a shorter timeframe with limited 
renewals. Due to the burden to develop re-procurements and manage the 
potential transition to a new contractor when an incumbent does not win 
award, it is not unusual to see a State agency choose to exercise the 
optional years, resulting in contract lengths of 7-10 years. It is safe 
to say that FNS and State agencies are interested in the best value and 
service for EBT projects regardless of the size of a specific State 
agency.
    The Agricultural Act of 2014, Public Law 113-79 (the Act) has also 
brought important changes to the SNAP EBT landscape that impacts States 
and SNAP EBT contractors looking forward.
    That legislation removed the requirement for States and their 
contractors to provide no cost point-of-sale (POS) devices to all 
authorized SNAP retailers who were not already using a commercial 
payment provider. The Act also changed manual voucher processing used 
when retailer sales do not warrant the cost to receive a POS device 
from the government and for back up during system outages and 
disasters.
    On the WIC side, while there is no new legislation at play, most of 
the 90 WIC State agencies are beginning to convert to an EBT delivery 
model to meet the October 1, 2020, deadline mandated by the Healthy 
Hunger-Free Kids Act of 2010, Public Law 111-296. These State agencies 
are acquiring services from the on-line and off-line contractors.
    In sum, EBT services have developed a pricing model that has 
evolved since the early projects were initiated in the 1980s. 
Currently, contractors will bid to provide all the services, including 
cards, benefit account management, purchase authorization, customer 
service, retailer equipage and settlement to food retailers for a 
single cost for each household or case served in a month. Sometimes 
retailer equipage, pay-phone surcharges for toll-free calls and other 
fees have been separated from the case-month price. This pricing model 
allows for fluctuations in caseload related to economic changes or 
other growth factors. To the degree other pricing models exist, they 
have not taken root within either SNAP or WIC to date. Pricing can be, 
and often is, set up in tiers to reduce the case-month fee when certain 
caseload thresholds are reached either due to increases (or decreases) 
in household participation or if multiple State agencies have 
contracted together for economies of scale with the same requirements 
and contract standards. The major functional components of on-line EBT 
for SNAP and WIC are outlined in Appendix A, and off-line smart card 
WIC EBT is described in Appendix B.

Request for Information

    This RFI seeks to obtain input from EBT stakeholders, other 
financial payments industry members and other interested parties 
regarding options and alternatives available to improve the procurement 
and operational aspects of EBT. FNS has posed various questions below 
to prompt stakeholder responses, and, before those, has also noted a 
few primary concerns and key objectives for this effort.

Primary Concerns

     Less available competition and potential that smaller 
State agencies may not receive affordable proposals, or even any 
proposals, in response to State agency solicitations.
     An increase in procurement activity and system conversions 
by SNAP State agencies as those using the services of the departing 
company migrate to the remaining processors.
     Significant increase in procurement activity and system 
implementation by WIC State agencies leading up to the October 1, 2020, 
deadline for WIC State agencies to convert to an EBT delivery system.
     Management of risks associated with greater activity in a 
shorter period of time.

Main Objectives

    FNS is inviting stakeholder input on how the opportunities and 
risks associated with these changes can best be recognized and managed. 
There are two main objectives:
    1. Increased competition for EBT services, including that which can 
possibly be achieved through changes or alternatives to the current 
business model.
    2. More stability and sustainability for this market, including 
that which can possibly be achieved through alternative pricing models 
and contract terms.

Questions

    The Agency will consider all comments, and plans to follow up on 
alternatives and suggestions that appear to be most viable from both a 
technical and a cost/benefit standpoint. Responses will help inform any 
future actions or guidance issued by the Agency, including guidance to 
States on issuing EBT Requests for Proposals (RFPs).
    Interested stakeholders are invited to respond to any or all of the 
following questions, and to identify other issues which may not be 
listed. Responses which clearly reference the pertinent question below 
would facilitate FNS' review of the stakeholder feedback.

[[Page 48291]]

Procurement

    1. Do State agency procurements provide sufficient information 
about the operational characteristics of their EBT projects for new 
entrants to the EBT market? If not, are there alternatives for 
potential vendors to obtain the information needed?
    2. How do State Agency requirements, (such as call center response 
standards, transaction processing requirements, card issuance 
timeframes and adjustment policies), compare to commercial practices? 
Would adjusting some of these requirements to closely resemble the 
commercial world increase the interest of potential new vendors, or 
impact contract costs or willingness of current vendors to bid? If so, 
what requirements or practices should be considered?
    3. Are the amounts for liquated damages and penalty clauses 
currently required by State agencies reasonable? If not, what would be 
more reasonable amounts or ways for State agencies to safeguard against 
such problems as project delays, unscheduled system downtime, and 
below-standard processing times, etc.?
    4. Can more economies of scale be realized without increasing 
complexity through any of the following:
    a. Multi-state shared services for commercial call center services, 
card production and delivery, training and other services?
    b. The inclusion of more agencies/programs?
    5. Are there requirements for vendor experience that are necessary 
to establish minimum qualifications to bid to provide EBT services? Are 
there requirements you have seen that should not be used because you 
believe that they unnecessarily limit competition?
    6. Would any vendors be interested in providing select service 
components (i.e. call centers, transaction processing, training, etc.) 
if there were an option to offer proposals for one or some rather than 
all of the service components? What pricing model(s) would work best 
for separate services when not bundled into the cost per case month 
pricing (CPCM)?
    7. What alternative procurement models might State Agencies 
consider to ensure they receive viable competitive bids?
    8. Should State agencies pursue coalition procurements with the 
benefits they bring, such as economies of scale, or does it tend to 
limit competition or discourage new entrants into the marketplace?

Pricing

    9. Does the impact of the EBT vendor assuming development and 
implementation costs before they begin processing transactions pose a 
major barrier to entering the market?
    10. Are there ways to separate EBT system development/startup costs 
from operational costs to reduce risk for new entrants when bidding on 
a project? If so, what are they? \1\
---------------------------------------------------------------------------

    \1\ SNAP procurements involve acquiring an operational process 
with costs for start-up activities included in the monthly 
operational cost-per-case-month. WIC procurements are conversions 
from paper to electronic delivery with deliverables and milestones 
for start-up that may be priced separately.
---------------------------------------------------------------------------

    11. Are there other changes to the CPCM pricing model that would 
encourage potential vendors to enter the EBT market?
    12. The tiered pricing model involves tiers within the CPCM pricing 
model, adjusted at smaller or larger intervals for different caseload 
levels. How can State consortia which want to procure together better 
realize economies of scale given their varying caseload sizes, and 
still benefit from a blended CPCM price based on their collective 
caseload volumes?
    13. Are there pricing models other than the CPCM model that would 
be advantageous in reducing pricing risk to the vendor and still 
maintain sustainable prices for the State agencies? How can the 
disadvantages to State agencies in forecasting expenses be overcome, if 
costs are no longer tied to caseload levels?

Managing Risk

    Several stakeholders have advised FNS that too many procurements 
occurring in close succession may increase the risk that smaller State 
Agencies may receive fewer or even no bids, as vendors will devote 
scarce resources to preparing proposals for the most potentially 
profitable customers. Similarly, if too many implementations or 
conversions are scheduled in close succession, it may mean that vendors 
will not have sufficient technical resources to assign their top team 
to each one. Both of these situations represent risks which FNS would 
like to help State Agencies manage and mitigate.
    14. Besides sharing known and estimated RFP release dates and 
conversion dates, what can FNS do to help State Agencies manage these 
risks and ensure smooth transitions?

Other Questions

    15. Are there other areas or issues that we have not specifically 
asked for a response on which you would like to offer comment related 
to the two main objectives of this RFI?

    Dated: August 6, 2015.
Audrey Rowe,
Administrator, Food and Nutrition Service.

Attached: Appendix A: EBT Functions for Online SNAP and WIC EBT
    Appendix B: EBT Functions for Offline WIC EBT Cards (Smart 
Cards)
    Appendix C: Web sites to RFP and other EBT information:

Appendix A--EBT Functions for On-Line SNAP and WIC EBT

    (1) Account setup and benefit authorization--support for on-line 
accounts for SNAP or WIC households authorized to receive benefits;
    (2) Card issuance and participant training--provide cards, 
equipment (PIN pads, card readers and training materials);
    (3) Participant account maintenance--receive daily and monthly 
benefit updates from State agency systems, aging benefits and 
reporting;
    (4) Transaction processing--approval or denial of food purchases 
made at authorized SNAP and WIC retailers/vendors; WIC processing 
includes, but is not limited to, matching of food item UPC, price 
and quantity;
    (5) Customer service--24 x 7 toll-free call support with help 
desk customer service representatives and Interactive Voice Response 
and web portal services inquiries related to purchase activities and 
balances from cardholders, merchants and State agency staff;
    (6) Retailer participation--support commercial third party 
switching services and installation and maintenance of payment 
terminals in smaller retail locations. Manual backup vouchers for 
authorizations during system interruptions or for low volume SNAP 
merchants;
    (7) EBT settlement--daily payment to authorized retailers for 
approved purchases; reconciliation via reports and data file 
exchanges, WIC also includes food item detail;
    (8) EBT reporting--administrative and batch data exchange for 
reporting card account activities by card number and retail 
location; daily financial settlement reporting and reconciliation; 
and,
    (9) Disaster Benefit Services (SNAP only)--providing card and 
benefit services for natural disasters.

Appendix B--EBT Functions for Offline WIC EBT (Smart Cards)

    WIC off-line EBT processing relies on State agencies to load a 
smart card chip with WIC food balances that can be read in grocery 
store lanes. Card and Personal Identification Number (PIN) support 
is provided by the State agency using the clinic system that tracks 
and determines participant benefits. Purchases are authorized off-
line in the grocery lane (without an on-line authorization) and a 
daily claim file is sent to the WIC EBT host for processing payment

[[Page 48292]]

to the WIC vendors. A hot card file, reconciliation file and 
authorized product list (APL) (containing the list of approved 
Universal Product Codes (UPC) and price look-up (PLU) codes called 
the APL file) are provided to the WIC grocer via the EBT host (an 
FTP server).
    (1) EBT host processing--processing of daily WIC claim files 
containing WIC transaction purchases, editing for Not-to-Exceed 
price limits, and pick-up of hot card, APL and reconciliation files 
to authorized WIC retail vendors.
    (2) Retail vendor equipage & integrated support (State agency 
option)
    (3) Customer Service (State agency option)--toll-free call 
center support including customer service representatives, 
Interactive Voice Response (IVR) and/or web portal services for 
cardholder and retailer and State agency staff inquiries.
    (4) EBT Reporting--administrative and batch data to support all 
processing and authorization activities.
    (5) Settlement and Reconciliation--similar to SNAP settlement 
but also includes food product information.

Appendix C--Web sites to RFP and Other EBT Information

SNAP EBT Status--http://www.fns.usda.gov/ebt/general-electronic-benefit-transfer-ebt-information
WIC EBT Status--http://www.fns.usda.gov/wic/wic-ebt-activities
WIC Technology Partners (Provides links to new and updated 
solicitations)--http://www.wictechnologypartners.com/solicitations/RFP-B2Z12017/index.php

[FR Doc. 2015-19794 Filed 8-11-15; 8:45 am]
 BILLING CODE 3410-30-P



                                                                             Federal Register / Vol. 80, No. 155 / Wednesday, August 12, 2015 / Notices                                          48289

                                                  available for inspection in the FSIS                    DEPARTMENT OF AGRICULTURE                                FNS is extending the comment period
                                                  Docket Room.                                                                                                  to provide additional time for interested
                                                                                                          Food and Nutrition Service                            parties to review this Request for
                                                  Additional Public Notification
                                                                                                                                                                Information.
                                                     FSIS will announce this notice online                [FNS–2015–0013]
                                                                                                                                                                DATES: The comment period for the
                                                  through the FSIS Web page located at                                                                          notice that was published on June 23,
                                                  http://www.fsis.usda.gov/wps/portal/                    Request for Information: SNAP and
                                                                                                          WIC Seeking Input Regarding                           2015 (80 FR 35932) has been extended
                                                  fsis/topics/regulations/federal-register/                                                                     from August 24, 2015 to October 24,
                                                  federal-register-notices.                               Procurement and Implementation of
                                                                                                          Electronic Benefit Transfer (EBT)                     2015. To be assured of consideration,
                                                     FSIS also will make copies of this
                                                                                                          Services; Extension of Comment                        comments must be received on or before
                                                  Federal Register publication available
                                                                                                          Period                                                October 24, 2015.
                                                  through the FSIS Constituent Update,
                                                                                                                                                                ADDRESSES: Comments may be
                                                  which is used to provide information
                                                                                                          AGENCY: Food and Nutrition Service                    submitted through the Federal
                                                  regarding FSIS policies, procedures,
                                                                                                          (FNS), USDA.                                          eRulemaking Portal at
                                                  regulations, Federal Register notices,
                                                  FSIS public meetings, and other types of                ACTION: Notice; Extension of Comment                  www.regulations.gov. Follow the online
                                                  information that could affect or would                  Period.                                               instructions for submitting comments
                                                  be of interest to constituents and                                                                            electronically. Comments can also be
                                                                                                          SUMMARY:    The Food and Nutrition                    mailed or delivered to: Andrea Gold,
                                                  stakeholders. The Update is                             Service (FNS) is interested in
                                                  communicated via Listserv, a free                                                                             Director, Retailer Policy and
                                                                                                          identifying ways to stimulate increased               Management Division, Supplemental
                                                  electronic mail subscription service for                competition in the Electronic Benefit
                                                  industry, trade groups, consumer                                                                              Nutrition Assistance Program, Food and
                                                                                                          Transfer (EBT) marketplace and identify               Nutrition Service, U.S. Department of
                                                  interest groups, health professionals,                  procurement or systems features that are
                                                  and other individuals who have asked                                                                          Agriculture, 3101 Park Center Drive,
                                                                                                          barriers to new entrants. FNS is also                 Room 424, Alexandria, Virginia 22302.
                                                  to be included. The Update also is                      seeking suggestions which will improve                   All comments submitted in response
                                                  available on the FSIS Web page. In                      procurement of the delivery of EBT                    to this notice will be included in the
                                                  addition, FSIS offers an electronic mail                transaction processing services through               record and will be made available to the
                                                  subscription service, which provides                    modifications to, or replacement of, the              public at www.regulations.gov. Please be
                                                  automatic and customized access to                      existing business model. The                          advised that the substance of the
                                                  selected food safety news and                           procurement and implementation of                     comments and the identity of the
                                                  information. This service is available at               EBT systems by State agencies                         individuals or entities commenting will
                                                  http://www.fsis.usda.gov/wps/portal/                    administering the Supplemental                        be subject to public disclosure.
                                                  fsis/programs-and-services/email-                       Nutrition Assistance Program (SNAP)                   FOR FURTHER INFORMATION CONTACT:
                                                  subscription-service. Options range from                and Special Supplemental Nutrition
                                                  recalls to export information to                                                                              Andrea Gold, Director, Retailer Policy
                                                                                                          Program for Women, Infants, and                       and Management Division,
                                                  regulations, directives, and notices.                   Children (WIC) needs to be sustainable
                                                  Customers can add or delete                                                                                   Supplemental Nutrition Assistance
                                                                                                          for all parties involved.                             Program, (703) 305–2434, or via email at
                                                  subscriptions themselves and have the                      The landscape of EBT is in a
                                                  option to password protect their                                                                              andrea.gold@fns.usda.gov.
                                                                                                          heightened state of change, due in part               SUPPLEMENTARY INFORMATION:
                                                  accounts.                                               to the recent decision by one of three
                                                  USDA Nondiscrimination Statement                        primary companies providing EBT                       Background
                                                     USDA prohibits discrimination in all                 transaction processing services for                      All SNAP State agencies and some
                                                  its programs and activities on the basis                SNAP and WIC to no longer solicit or                  WIC State agencies conduct EBT using
                                                  of race, color, national origin, gender,                accept any new prepaid card business,                 magnetic stripe cards similar to debit or
                                                  religion, age, disability, political beliefs,           including for SNAP and WIC EBT                        credit cards. Almost all EBT systems
                                                  sexual orientation, and marital or family               services. In addition, there are                      today are integrated such that all of the
                                                  status (Not all prohibited bases apply to               numerous EBT projects moving toward                   service requirements are provided
                                                  all programs). Persons with disabilities                the October 1, 2020, statutorily-                     within a single system to the relevant
                                                  who require alternative means for                       mandated deadline for WIC Program                     State agencies, often referred to as a
                                                  communication of program information                    implementation.                                       turnkey system. Over the years, some
                                                  (Braille, large print, and audiotape)                      This Request for Information (RFI)                 States have obtained SNAP EBT services
                                                  should contact USDA’s Target Center at                  seeks to obtain input from EBT                        by contracting for individual EBT
                                                  (202) 720–2600 (voice and TTY). To file                 stakeholders and other financial                      service components to one or more
                                                  a written complaint of discrimination,                  payment industry members and                          service providers (such as authorization
                                                  write USDA, Office of the Assistant                     interested parties, regarding options and             platform, retailer management,
                                                  Secretary for Civil Rights, 1400                        alternatives available to improve the                 transaction switching, client help desk
                                                  Independence Avenue SW.,                                procurement and current operational                   services, and card production). A few
                                                  Washington, DC 20250–9410 or call                       aspects of EBT. In this document, FNS                 State agencies have performed certain
                                                  (202) 720–5964 (voice and TTY). USDA                    has posed various questions to prompt                 EBT services themselves, to control
                                                  is an equal opportunity provider and                    stakeholder responses. We intend to                   costs or meet the needs of State
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                  employer.                                               consider and follow up on the                         operations. These State-operated
                                                                                                          alternatives and suggestions that appear              services may include such functions as
                                                    Done at Washington, DC on: August 6,                  to be most viable from both a technical               transaction authorization, retailer
                                                  2015.                                                   and a cost/benefit standpoint.                        training and management, EBT card
                                                  Alfred V. Almanza,                                         Interested stakeholders are invited to             distribution, and management and
                                                  Acting Administrator.                                   respond to any or all of the questions                customer service.
                                                  [FR Doc. 2015–19748 Filed 8–11–15; 8:45 am]             that follow, and to identify issues which                In the WIC Program, several of the
                                                  BILLING CODE 3410–DM–P                                  may not be listed.                                    State agencies use smart card or chip


                                             VerDate Sep<11>2014   18:16 Aug 11, 2015   Jkt 235001   PO 00000   Frm 00003   Fmt 4703   Sfmt 4703   E:\FR\FM\12AUN1.SGM   12AUN1


                                                  48290                      Federal Register / Vol. 80, No. 155 / Wednesday, August 12, 2015 / Notices

                                                  card systems, sometimes referred to as                  agency choose to exercise the optional                Request for Information
                                                  off-line systems, while others have                     years, resulting in contract lengths of 7–               This RFI seeks to obtain input from
                                                  chosen an on-line system using a                        10 years. It is safe to say that FNS and              EBT stakeholders, other financial
                                                  magnetic stripe reader. The trend in                    State agencies are interested in the best             payments industry members and other
                                                  WIC, for State agencies choosing both                   value and service for EBT projects                    interested parties regarding options and
                                                  mag-stripe and smart card solutions, is                 regardless of the size of a specific State            alternatives available to improve the
                                                  toward contracted EBT services via a                    agency.                                               procurement and operational aspects of
                                                  turnkey processor.
                                                                                                             The Agricultural Act of 2014, Public               EBT. FNS has posed various questions
                                                     Contractors compete for State EBT
                                                  business in a comparatively small                       Law 113–79 (the Act) has also brought                 below to prompt stakeholder responses,
                                                  marketplace. FNS has long encouraged                    important changes to the SNAP EBT                     and, before those, has also noted a few
                                                  healthy competition in this marketplace                 landscape that impacts States and SNAP                primary concerns and key objectives for
                                                  because the Agency believes it helps to                 EBT contractors looking forward.                      this effort.
                                                  control costs, ensures a level playing                     That legislation removed the                       Primary Concerns
                                                  field for businesses who are interested                 requirement for States and their                        • Less available competition and
                                                  in supporting EBT delivery processes,                   contractors to provide no cost point-of-              potential that smaller State agencies
                                                  and encourages innovation. Two of the                   sale (POS) devices to all authorized                  may not receive affordable proposals, or
                                                  biggest concerns for FNS and State                      SNAP retailers who were not already
                                                  agencies with the limited competition                                                                         even any proposals, in response to State
                                                                                                          using a commercial payment provider.                  agency solicitations.
                                                  within the EBT market, are the                          The Act also changed manual voucher
                                                  increased risk for sustainability of the                                                                        • An increase in procurement activity
                                                                                                          processing used when retailer sales do                and system conversions by SNAP State
                                                  industry over time, and the impact                      not warrant the cost to receive a POS
                                                  limited competition could have on                                                                             agencies as those using the services of
                                                                                                          device from the government and for                    the departing company migrate to the
                                                  pricing.                                                back up during system outages and
                                                     Up until most recently, in the SNAP                                                                        remaining processors.
                                                                                                          disasters.                                              • Significant increase in procurement
                                                  EBT environment, there have been three
                                                  dominant primary EBT contractors with                      On the WIC side, while there is no                 activity and system implementation by
                                                  State agency EBT contracts. In the WIC                  new legislation at play, most of the 90               WIC State agencies leading up to the
                                                  EBT environment, these same three on-                   WIC State agencies are beginning to                   October 1, 2020, deadline for WIC State
                                                  line EBT SNAP contractors have also                     convert to an EBT delivery model to                   agencies to convert to an EBT delivery
                                                  provided EBT on-line services for WIC.                  meet the October 1, 2020, deadline                    system.
                                                  There are also two other off-line EBT                   mandated by the Healthy Hunger-Free                     • Management of risks associated
                                                  contractors for WIC.                                    Kids Act of 2010, Public Law 111–296.                 with greater activity in a shorter period
                                                     In January 2014, one of the primary                  These State agencies are acquiring                    of time.
                                                  contractors announced that the firm                     services from the on-line and off-line                Main Objectives
                                                  would no longer solicit or accept any                   contractors.
                                                  new prepaid card business, which                                                                                 FNS is inviting stakeholder input on
                                                                                                             In sum, EBT services have developed                how the opportunities and risks
                                                  includes their EBT services. The firm is
                                                                                                          a pricing model that has evolved since                associated with these changes can best
                                                  in the process of fulfilling its existing
                                                                                                          the early projects were initiated in the              be recognized and managed. There are
                                                  contracts but is not pursuing any further
                                                                                                          1980s. Currently, contractors will bid to             two main objectives:
                                                  business in this area. As a result, only
                                                                                                          provide all the services, including cards,               1. Increased competition for EBT
                                                  two of those three active primary EBT
                                                  contractors remain in the market. There                 benefit account management, purchase                  services, including that which can
                                                  has been a new entrant to the SNAP                      authorization, customer service, retailer             possibly be achieved through changes or
                                                  market, a company that has been active                  equipage and settlement to food retailers             alternatives to the current business
                                                  in the WIC market; however, at this                     for a single cost for each household or               model.
                                                  time, it is unclear whether any other                   case served in a month. Sometimes                        2. More stability and sustainability for
                                                  firms will choose to enter this market.                 retailer equipage, pay-phone surcharges               this market, including that which can
                                                  State agencies have acquired EBT                        for toll-free calls and other fees have               possibly be achieved through alternative
                                                  service through one of two major                        been separated from the case-month                    pricing models and contract terms.
                                                  approaches: Procurements dedicated to                   price. This pricing model allows for
                                                                                                          fluctuations in caseload related to                   Questions
                                                  a single State agency, and multi-state
                                                  procurements. The latter approach                       economic changes or other growth                         The Agency will consider all
                                                  leverages pricing through economies of                  factors. To the degree other pricing                  comments, and plans to follow up on
                                                  scale and standardizes requirements and                 models exist, they have not taken root                alternatives and suggestions that appear
                                                  contract provisions in a way that can                   within either SNAP or WIC to date.                    to be most viable from both a technical
                                                  reduce the burden on contractors of                     Pricing can be, and often is, set up in               and a cost/benefit standpoint.
                                                  responding to separate contract                         tiers to reduce the case-month fee when               Responses will help inform any future
                                                  solicitations by many State agencies.                   certain caseload thresholds are reached               actions or guidance issued by the
                                                  Typical contracts have a base period                    either due to increases (or decreases) in             Agency, including guidance to States on
                                                  such as 5 years with several optional                   household participation or if multiple                issuing EBT Requests for Proposals
                                                                                                          State agencies have contracted together
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                                                  extension years, but there are situations                                                                     (RFPs).
                                                  where State procurement rules dictate a                 for economies of scale with the same                     Interested stakeholders are invited to
                                                  shorter timeframe with limited                          requirements and contract standards.                  respond to any or all of the following
                                                  renewals. Due to the burden to develop                  The major functional components of on-                questions, and to identify other issues
                                                  re-procurements and manage the                          line EBT for SNAP and WIC are                         which may not be listed. Responses
                                                  potential transition to a new contractor                outlined in Appendix A, and off-line                  which clearly reference the pertinent
                                                  when an incumbent does not win                          smart card WIC EBT is described in                    question below would facilitate FNS’
                                                  award, it is not unusual to see a State                 Appendix B.                                           review of the stakeholder feedback.


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                                                                             Federal Register / Vol. 80, No. 155 / Wednesday, August 12, 2015 / Notices                                                  48291

                                                  Procurement                                             Pricing                                                  response on which you would like to
                                                                                                             9. Does the impact of the EBT vendor                  offer comment related to the two main
                                                     1. Do State agency procurements                                                                               objectives of this RFI?
                                                  provide sufficient information about the                assuming development and
                                                  operational characteristics of their EBT                implementation costs before they begin                    Dated: August 6, 2015.
                                                  projects for new entrants to the EBT                    processing transactions pose a major                     Audrey Rowe,
                                                  market? If not, are there alternatives for              barrier to entering the market?                          Administrator, Food and Nutrition Service.
                                                  potential vendors to obtain the                            10. Are there ways to separate EBT
                                                                                                          system development/startup costs from                    Attached: Appendix A: EBT Functions for
                                                  information needed?                                                                                                  Online SNAP and WIC EBT
                                                                                                          operational costs to reduce risk for new
                                                     2. How do State Agency requirements,                 entrants when bidding on a project? If                     Appendix B: EBT Functions for Offline
                                                  (such as call center response standards,                                                                             WIC EBT Cards (Smart Cards)
                                                                                                          so, what are they? 1                                       Appendix C: Web sites to RFP and other
                                                  transaction processing requirements,                       11. Are there other changes to the
                                                  card issuance timeframes and                                                                                         EBT information:
                                                                                                          CPCM pricing model that would
                                                  adjustment policies), compare to                        encourage potential vendors to enter the                 Appendix A—EBT Functions for On-
                                                  commercial practices? Would adjusting                   EBT market?                                              Line SNAP and WIC EBT
                                                  some of these requirements to closely                      12. The tiered pricing model involves
                                                  resemble the commercial world increase                  tiers within the CPCM pricing model,                        (1) Account setup and benefit
                                                  the interest of potential new vendors, or                                                                        authorization—support for on-line accounts
                                                                                                          adjusted at smaller or larger intervals for
                                                  impact contract costs or willingness of                                                                          for SNAP or WIC households authorized to
                                                                                                          different caseload levels. How can State                 receive benefits;
                                                  current vendors to bid? If so, what                     consortia which want to procure                             (2) Card issuance and participant
                                                  requirements or practices should be                     together better realize economies of                     training—provide cards, equipment (PIN
                                                  considered?                                             scale given their varying caseload sizes,                pads, card readers and training materials);
                                                     3. Are the amounts for liquated                      and still benefit from a blended CPCM                       (3) Participant account maintenance—
                                                  damages and penalty clauses currently                   price based on their collective caseload                 receive daily and monthly benefit updates
                                                  required by State agencies reasonable? If               volumes?                                                 from State agency systems, aging benefits and
                                                  not, what would be more reasonable                         13. Are there pricing models other                    reporting;
                                                                                                                                                                      (4) Transaction processing—approval or
                                                  amounts or ways for State agencies to                   than the CPCM model that would be
                                                                                                                                                                   denial of food purchases made at authorized
                                                  safeguard against such problems as                      advantageous in reducing pricing risk to                 SNAP and WIC retailers/vendors; WIC
                                                  project delays, unscheduled system                      the vendor and still maintain                            processing includes, but is not limited to,
                                                  downtime, and below-standard                            sustainable prices for the State agencies?               matching of food item UPC, price and
                                                  processing times, etc.?                                 How can the disadvantages to State                       quantity;
                                                     4. Can more economies of scale be                    agencies in forecasting expenses be                         (5) Customer service—24 x 7 toll-free call
                                                  realized without increasing complexity                  overcome, if costs are no longer tied to                 support with help desk customer service
                                                                                                          caseload levels?                                         representatives and Interactive Voice
                                                  through any of the following:
                                                                                                                                                                   Response and web portal services inquiries
                                                     a. Multi-state shared services for                   Managing Risk                                            related to purchase activities and balances
                                                  commercial call center services, card                     Several stakeholders have advised                      from cardholders, merchants and State
                                                  production and delivery, training and                   FNS that too many procurements                           agency staff;
                                                  other services?                                                                                                     (6) Retailer participation—support
                                                                                                          occurring in close succession may                        commercial third party switching services
                                                     b. The inclusion of more agencies/                   increase the risk that smaller State                     and installation and maintenance of payment
                                                  programs?                                               Agencies may receive fewer or even no                    terminals in smaller retail locations. Manual
                                                     5. Are there requirements for vendor                 bids, as vendors will devote scarce                      backup vouchers for authorizations during
                                                  experience that are necessary to                        resources to preparing proposals for the                 system interruptions or for low volume
                                                  establish minimum qualifications to bid                 most potentially profitable customers.                   SNAP merchants;
                                                  to provide EBT services? Are there                      Similarly, if too many implementations                      (7) EBT settlement—daily payment to
                                                  requirements you have seen that should                  or conversions are scheduled in close                    authorized retailers for approved purchases;
                                                  not be used because you believe that                                                                             reconciliation via reports and data file
                                                                                                          succession, it may mean that vendors
                                                                                                                                                                   exchanges, WIC also includes food item
                                                  they unnecessarily limit competition?                   will not have sufficient technical                       detail;
                                                     6. Would any vendors be interested in                resources to assign their top team to                       (8) EBT reporting—administrative and
                                                  providing select service components                     each one. Both of these situations                       batch data exchange for reporting card
                                                  (i.e. call centers, transaction processing,             represent risks which FNS would like to                  account activities by card number and retail
                                                  training, etc.) if there were an option to              help State Agencies manage and                           location; daily financial settlement reporting
                                                  offer proposals for one or some rather                  mitigate.                                                and reconciliation; and,
                                                  than all of the service components?                       14. Besides sharing known and                             (9) Disaster Benefit Services (SNAP only)—
                                                                                                          estimated RFP release dates and                          providing card and benefit services for
                                                  What pricing model(s) would work best
                                                                                                          conversion dates, what can FNS do to                     natural disasters.
                                                  for separate services when not bundled
                                                  into the cost per case month pricing                    help State Agencies manage these risks                   Appendix B—EBT Functions for Offline
                                                  (CPCM)?                                                 and ensure smooth transitions?                           WIC EBT (Smart Cards)
                                                     7. What alternative procurement                      Other Questions                                             WIC off-line EBT processing relies on State
                                                  models might State Agencies consider to                   15. Are there other areas or issues that               agencies to load a smart card chip with WIC
                                                  ensure they receive viable competitive                                                                           food balances that can be read in grocery
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                                                                                                          we have not specifically asked for a
                                                  bids?                                                                                                            store lanes. Card and Personal Identification
                                                     8. Should State agencies pursue                                                                               Number (PIN) support is provided by the
                                                                                                            1 SNAP procurements involve acquiring an
                                                                                                                                                                   State agency using the clinic system that
                                                  coalition procurements with the benefits                operational process with costs for start-up activities
                                                                                                                                                                   tracks and determines participant benefits.
                                                  they bring, such as economies of scale,                 included in the monthly operational cost-per-case-
                                                                                                          month. WIC procurements are conversions from             Purchases are authorized off-line in the
                                                  or does it tend to limit competition or                 paper to electronic delivery with deliverables and       grocery lane (without an on-line
                                                  discourage new entrants into the                        milestones for start-up that may be priced               authorization) and a daily claim file is sent
                                                  marketplace?                                            separately.                                              to the WIC EBT host for processing payment



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                                                  48292                      Federal Register / Vol. 80, No. 155 / Wednesday, August 12, 2015 / Notices

                                                  to the WIC vendors. A hot card file,                    opportunities in rural communities,                   Department of Commerce (the
                                                  reconciliation file and authorized product list         maintain the health and resiliency of the             Department) initiated an administrative
                                                  (APL) (containing the list of approved                  Nation’s forests, and advance                         review of the antidumping duty order
                                                  Universal Product Codes (UPC) and price
                                                                                                          sustainability in the built environment.              on polyethylene terephthalate film,
                                                  look-up (PLU) codes called the APL file) are
                                                  provided to the WIC grocer via the EBT host                On October 10, 2014, USDA                          sheet and strip (PET film) from Brazil.1
                                                  (an FTP server).                                        published official competition rules in               On February 6, 2015, the Department
                                                     (1) EBT host processing—processing of                the Federal Register in Notice 79 FR                  published, in the Federal Register, a
                                                  daily WIC claim files containing WIC                    61275. The competition rules note that                notice of revocation of the antidumping
                                                  transaction purchases, editing for Not-to-              the Prize Purse is a combined pool from               duty order on PET film from Brazil,
                                                  Exceed price limits, and pick-up of hot card,           the Competition Partners of $2 million                effective November 10, 2013.2
                                                  APL and reconciliation files to authorized              and that the Prize Purse may increase,                Accordingly, this administrative review
                                                  WIC retail vendors.                                                                                           covers Terphane Ltda. and Terphane
                                                                                                          but will not decrease. The rules also
                                                     (2) Retail vendor equipage & integrated
                                                  support (State agency option)                           state that any increases in the Prize                 Inc. (collectively, Terphane) for the
                                                     (3) Customer Service (State agency                   Purse will be posted on the                           period of review (POR) November 1,
                                                  option)—toll-free call center support                   Competition Web site                                  2013, through November 9, 2013. As we
                                                  including customer service representatives,             (www.tallwoodbuildingcompetition.org)                 currently have no evidence of any
                                                  Interactive Voice Response (IVR) and/or web             and published in the Federal Register.                reviewable entries, shipments or sales of
                                                  portal services for cardholder and retailer             The Softwood Lumber Board has                         subject PET film by Terphane during the
                                                  and State agency staff inquiries.                       committed an additional $1 million to                 POR, we are issuing a preliminary no
                                                     (4) EBT Reporting—administrative and                                                                       shipment determination.3
                                                                                                          support the competition. By way of this
                                                  batch data to support all processing and
                                                  authorization activities.                               notice, USDA is informing the public                  FOR FURTHER INFORMATION CONTACT:
                                                     (5) Settlement and Reconciliation—similar            that the combined competition prize                   Tyler Weinhold or Robert James, AD/
                                                  to SNAP settlement but also includes food               purse is now $3 million in accordance                 CVD Operations, Office VI, Enforcement
                                                  product information.                                    with the competition’s official rules.                and Compliance, International Trade
                                                                                                             The Prize Purse will be used to fund               Administration, U.S. Department of
                                                  Appendix C—Web sites to RFP and                         one or more awards; the number of                     Commerce, 14th Street and Constitution
                                                  Other EBT Information                                   awards made will depend on the                        Avenue NW., Washington, DC 20230;
                                                  SNAP EBT Status—http://www.fns.usda.gov/                estimated amount of Eligible Expenses                 telephone: (202) 482–1121 or (202) 482–
                                                    ebt/general-electronic-benefit-transfer-ebt-          proposed by the winning Project                       0649, respectively.
                                                   information                                            Proponent Team(s). Award(s) will be                   SUPPLEMENTARY INFORMATION:
                                                  WIC EBT Status—http://www.fns.usda.gov/                 made to the winning Project Proponent
                                                   wic/wic-ebt-activities
                                                                                                          Team(s) to cover incremental costs of                 Scope of the Order
                                                  WIC Technology Partners (Provides links to
                                                   new and updated solicitations)—http://                 transitioning their building from a                     The products covered by this order
                                                   www.wictechnologypartners.com/                         traditional structure to a wood structure,            are all gauges of raw, pre-treated, or
                                                   solicitations/RFP-B2Z12017/index.php                   i.e., those costs incurred only because of            primed PET film, whether extruded or
                                                  [FR Doc. 2015–19794 Filed 8–11–15; 8:45 am]
                                                                                                          the Project Proponent Team’s innovative               co-extruded. PET film is classifiable
                                                                                                          use of wood products in the                           under subheading 3920.62.00.90 of the
                                                  BILLING CODE 3410–30–P
                                                                                                          demonstration structure. Additional                   Harmonized Tariff Schedule of the
                                                                                                          details may be found in the original                  United States.4
                                                  DEPARTMENT OF AGRICULTURE                               Federal Register Notice.                              Methodology
                                                                                                            Authority: 15 U.S.C. 3719.
                                                  Rural Business-Cooperative Service                                                                               The Department is conducting this
                                                                                                            Dated: August 7, 2015.                              review in accordance with section
                                                  Notice of Change to Announcement of                     Lillian Salerno,                                      751(a)(2) of the Tariff Act of 1930, as
                                                  Requirements and Registration for the                   Administrator, Rural Business-Cooperative             amended (the Act). For a full
                                                  U.S. Tall Wood Building Prize                           Service.                                              description of the methodology
                                                  Competition                                             [FR Doc. 2015–19820 Filed 8–11–15; 8:45 am]           underlying our conclusions, see
                                                                                                          BILLING CODE 3410–XY–P                                Preliminary Decision Memorandum.
                                                  AGENCY:  Rural Business-Cooperative                                                                           The Preliminary Decision Memorandum
                                                  Service, USDA.                                                                                                is a public document and is on file
                                                  ACTION: Notice of change to                                                                                   electronically via Enforcement and
                                                                                                          DEPARTMENT OF COMMERCE
                                                  Announcement of Requirements and
                                                  Registration for the U.S. Tall Wood                     International Trade Administration                      1 See Initiation of Antidumping and

                                                  Building Prize Competition.                                                                                   Countervailing Duty Administrative Reviews, 79 FR
                                                                                                          [A–351–841]                                           76956 (December 23, 2014).
                                                  SUMMARY:   The U.S. Department of                                                                               2 See Polyethylene Terephthalate Film, Sheet, and

                                                  Agriculture (USDA) in a cooperative                     Polyethylene Terephthalate Film, Sheet                Strip From Brazil, the People’s Republic of China,
                                                                                                                                                                and the United Arab Emirates: Continuation and
                                                  partnership with the Softwood Lumber                    and Strip From Brazil: Preliminary                    Revocation of Antidumping Duty Orders, 80 FR
                                                  Board and the Binational Softwood                       Results of Antidumping Duty                           6689 (February 6, 2015) (Notice of Revocation).
                                                  Lumber Council is conducting a prize                    Administrative Review; 2013–2014                        3 Terphane is the only respondent in this review.

                                                  competition funding initiative to                                                                               4 For a full description of the scope of the order,
                                                                                                          AGENCY:  Enforcement and Compliance,                  see ‘‘Decision Memorandum for the Preliminary
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                                                  support the demonstration of tall wood
                                                  buildings in the United States. The U.S.                International Trade Administration,                   Results of the Antidumping Duty Administrative
                                                                                                          Department of Commerce.                               Review of Polyethylene Terephthalate Film, Sheet
                                                  Tall Wood Building Prize Competition                                                                          and Strip from Brazil: 2013–2014,’’ from Christian
                                                  (the ‘‘Competition’’) is being conducted                DATES: Effective Date: August 12, 2015.               Marsh, Deputy Assistant Secretary for Antidumping
                                                  to showcase the architectural and                       SUMMARY: In response to requests from                 and Countervailing Duty Operations, to Paul
                                                                                                                                                                Piquado, Assistant Secretary for Enforcement and
                                                  commercial viability of advanced wood                   DuPont Teijin Films, Mitsubishi                       Compliance (Preliminary Decision Memorandum),
                                                  products in tall building construction in               Polyester Film, Inc., and SKC, Inc.                   dated concurrently with these results and hereby
                                                  order to support employment                             (collectively, Petitioners), the                      adopted by this notice.



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Document Created: 2016-09-27 22:26:47
Document Modified: 2016-09-27 22:26:47
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice; Extension of Comment Period.
DatesThe comment period for the notice that was published on June 23, 2015 (80 FR 35932) has been extended from August 24, 2015 to October 24, 2015. To be assured of consideration, comments must be received on or before October 24, 2015.
ContactAndrea Gold, Director, Retailer Policy and Management Division, Supplemental Nutrition Assistance Program, (703) 305-2434, or via email at [email protected]
FR Citation80 FR 48289 

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