Policies and Procedures

Indiana Committee for the Purchase of Products and Services of Persons with Severe Disabilities

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POLICY 1. Definitions

Sec. 1. Policy

(a) The Committee for the Purchase of Products and Services of Persons with Severe Disabilities is established by PL-63, Acts of 1976, (IC 16-32-2) for the purpose of enhancing employment opportunities for persons with severe disabilities employed by qualified not-for-profit agencies by supplementing rather supplanting existing work hours with state use work opportunities.

Sec. 2. Definitions as used in these Policies

(a) “Apportioned on an Equitable Basis” means a method developed and utilized by the Committee to ensure broad input and competitive participation of all eligible work centers.

(b) “Capability Analysis” is a factual self-evaluation and review of a given work center’s technical and financial potential and/or ability to manufacture a product or provide a service under the Act.

(c) “Central Coordinating Agency (CCA)” means a not-for-profit agency, operated in the interest of Work Centers and people with disabilities they serve. The CCA is responsible for the successful implementation of the State Use Program.

(d) “Committee” or “State Use Law Committee” means the Committee
for the Purchase of Products and Services of Persons with Severe Disabilities as established by the State Legislature PL-63, Acts of 1976, (IC 16-32-2).

(e) “Direct Labor” means all work required for preparation, processing and packaging of a product or work directly related to performance of a service, excluding supervision, administration, inspection and/or shipping.

(f) “Enhance Employment Opportunities” means an increase in disposable income, work hours and training opportunities through contracts obtained through the State Use Program.

(g) “Fair Market Price” means the approved price for products and/or services provided by certified Work Centers which will ensure the recovery of costs for providing approved product and/or service. These costs include but are not limited to direct labor, raw materials, overhead and transportation.

(h) “Fiscal Year” means the twelve month period beginning July 1st and ending June 30th.

(i) “Initial Certification Forms” means the document issued and approved by the Committee and upon completion by the work center, qualifies the not-for-profit agency to participate in activities under the Act.

(j) “Standards” means standards adopted by the Secretary of Family and Social Services. Currently, to participate in the State Use Program an agency must be accredited by the Commission on Accreditation of Rehabilitation Facilities (CARF).

(k) “Competitive Employment” means work performed at, or exceeding, the minimum wage earnings level in a bonafide corporation, partnership, business, industry and/or commercial establishment.

(l) “Priority Waiver” means a procedure utilized to ensure that items currently being produced and presented in the catalogs of Prison Industries are excluded from being placed in the State Use Law Products and Services Catalog. These items must have been approved prior to July 1, 1996.

(m) “Products and Services Catalog” means a compilation of the commodities and/or services available by work centers and which have been approved by the Committee.

(n) “Products and Services Suitable for Use” means any items, commodities and/or services which are needed by the appropriate state and/or local government purchasing authorities and can be supplied by a given Work Center.

(o) “Qualified Not-For-Profit Agency” means any agency which:

1. Complies with Indiana laws governing private not-for-profit corporations.
2. Is certified by the Wage and Hour Division of the U.S. Department of Labor.
3. Meets or exceeds the Commission on Accreditation for Rehabilitation Facilities (CARF).
4. Designated as an approved Work Center by the Committee.

(p) “Severely, Disabled” means a person whose disability when viewed within the extent of their adjustment or recovery from the physical and/or mental disability, is at such a productive level to preclude normal competitive employment without the identified and needed intervention and/or support services.

(q) “State Agency and/or Units of Local Government” means any entity of the Legislative, Judicial or Executive branch of state government and/or any city, town or county unit which purchased commodities and/or services.

(r) “State Use Law” commonly used name IC 16-32-2 which establishes the Committee to develop, monitor and report efforts of state agencies and units of local government regarding the purchase of products and services of persons with disabilities employed by qualified not-for-profit agencies.

(s) “Work Center” means a qualified not-for-profit agency as described in paragraph (o). This description formally described a State Use Marketing Outlet (SUMO).

(t) “Work Center” means a charitable organization or institution conducted not-for-profit for the purpose of carrying out a recognized program of rehabilitation for persons with disabilities and/or providing such individuals with remunerative employment or occupational rehabilitation activity of an educational therapeutic and/or vocational nature.

Sec. 3. Recommendations

(a) All individuals, particularly those concerned with purchasing, are encouraged to recommend to the Committee commodities and services which appear to be suitable for procurement by the state and/or units of local government through the State Use Program.

POLICY 2. State Use Law Committee

Sec. 1. Membership

Under the Act, the Committee is composed of eight (8) members as follows: Director of the Division of Disability, Aging and Rehabilitative Services; the Commissioner of the Department of Administration; the Commissioner of the Department of Health; the Director of the Division of Mental Health; the Executive Director of the Governor’s Planning Council for People with Disabilities; and three (3) members appointed by the Governor to represent the public-at-large is required by the Act to designate a staff member to serve as Executive Secretary to the Committee.

Sec. 2. Responsibility

It is the Committee’s responsibility to administer the Act, the purpose of which is to enhance employment opportunities for persons with severe disabilities by encouraging state agencies and units of local government to purchase products and services made by persons with severe disabilities employed by qualified not-for-profit agencies referred to as Work Centers.

Sec. 3. Duties and Powers

The Committee shall have all of the following powers and duties:

(a) Request from any agency of the State, or any unit of local government, information with respect to product specification and service requirement which it determines are suitable for the qualified, not-for-profit agencies (Work Centers) to provide to the State or units of local government.

(b) Establish, publish and distribute a Products and Services Catalog (procurement list) of those commodities and services which it approves.

(c) Determine the fair market price for all products and services provided by the qualified not-for-profit agencies. The price to be established shall recover the cost of materials, labor, overhead and delivery. The Committee shall also review the fair market prices from time to time in accordance with changing cost factors.

(d) Make any rules and regulations necessary regarding specifications of products and/or services and time of delivery and fair market price.

(e) Encourage diversity in products and services provided by qualified not-for-profit agencies.

(f) Request a quarterly report from each participating qualified not-for-profit agency describing the volume of sales for each product or service sold under the provision of the Act and the number of workers with disabilities and earnings on these contracts.

(g) Prepare and distribute an annual report to include contracts issued, sales revenues generated and the impact and effectiveness of the program.

(h) Meet quarterly.

(i) Establish rules and regulations regarding the efficient and effective implementation of this Act.

(j) Establish procedures designed to ensure that coordination and collaboration exists between the State Use Program, and the Department of Correction, Industries and Farms Programs.

(k) Supervise and monitor the activities delegated to the Central Coordinating Agency to carry out the intent and activities set forth by this Act.

Sec. 4. Procurement List

The Committee shall distribute to all known purchasing officers of state agencies and/or units of local government a catalog which lists all commodities and services that can be purchased from qualified not-for-profit agencies.

(a) For commodities, the catalog should include the item’s description, specifications and other pertinent information.

(b) For services, the catalog list should identify the type of service to be provided, the area(s), where available and other pertinent information.

Sec. 5. Fair Market Price

The Committee shall determine the fair market price for products and services. The qualified not-for-profit agencies shall request price changes from the Committee through the Central Coordinating Agency (CCA). The Central Coordinating Agency shall analyze the data and submit a recommended fair market price to the Committee along with the necessary detailed justification to support the recommend price.

Sec. 6. Executive Secretary

(a) The Director of Division of Disability, Aging and Rehabilitative Services (DDARS) shall appoint a staff member to serve as the Executive Secretary for the Committee.

(b) Said appointee shall serve as a non-voting member of the Committee.

(c) The Executive Secretary shall maintain for all Committee transactions including at least:

1. Correspondence File
2. Minute Book – including meeting agenda
3. Approved Products, Services and Specifications
4. Other Records as the Committee shall so dictate
5. Approved Fair Market Prices

POLICY 3. Central Coordinating Agency

Sec. 1.

At the December 9, 1977 Committee meeting, it was decided to utilize a recognized not-for-profit organization to assist the Committee in implementing the law. The Indiana Association of Rehabilitation Facilities (IN-ARF) was appointed as the Central Coordinating Agency (CCA). Its affiliated corporation ARF-IN was appointed in July of 1989 and will serve as long as it meets the Committee’s goals and objections.

Sec. 2. Responsibilities.

The Central Coordinating Agency (CCA), with guidance and monitoring by the Committee, shall carry out the following duties delegated to facilitate the implementation of this Act.

(a) Represent all qualified not-for-profit agencies as defined in IC 16-32-2, helping to fulfill the mission of the Committee.

(b) Be directly accountable to the Committee for the Purchase of Products and Services of Persons with Severe Disabilities (State Use Law Committee) for all matters relative to the implementation of the Act.

(c) Review the capabilities and evaluate the qualifications of eligible Work Centers as defined by law, and to provide the Committee with pertinent data and recommendations concerning the Work Centers, their manufacturing and/or service production capabilities and any other information required by the Committee in order to certify eligibility.

(d) Recommend to the Committee, in addition to suggested prices, suitable products and/or services for procurement from all participating Work Centers.

(e) Distribute orders from state and/or local purchasing agencies among participating Work Centers within policy guidelines established by the Committee.

(f) Maintain necessary records and data on participating Work Centers to enable the CCA to allocate orders in an equitable manner of process.

(g) Monitor Work Centers’ activities to ensure compliance with specifications in the products of commodity and/or performance of a service compliance with IC 16-32-2 and subsequent policies, guidelines and regulations as adopted by the Committee.

(h) Submit to the Committee as necessary, and as market conditions change, a recommend price change (fair market price) for assigned and approved products and/or services.

(i) Submit to the Committee on an annual basis, or as otherwise requested by the Committee, a comprehensive report which shall contain at least the following:

1. All financial transactions of the CCA, generated by implementation of the Act. These transactions will be recorded in a separate account.
2. Assurance from a certified public accountant that said separate account has been established and meets with generally accepted accounting principles and procedures.
3. A copy of the annual audit performed by a certified public accountant.
4. Activity reports of the Work Centers regarding their significance of the number of job stations created for people with disabilities; the volume of sales generated and earnings of workers with disabilities; and the number of competitive job placements as a result of State Use activities.
5. Other data and information as requested by the Committee.

(j) Research and identify suitable products and services which might be provided by Work Centers.

(k) Prepare a catalog of products and services, describing the various products and services available.

(l) Assist in distributing the catalog.

(m) Make its financial records available to the Committee for inspection at any reasonable time and with due notification.

(n) Develop a procedures manual for each functional activity performed as requested by the Committee.

Sec. 3. Assignment of Product and/or Service

(a) Any Work Center proposing a product or service via the CCA will have priority on its assignment unless the product has been previously assigned. Service contracts require the following:

(b) The CCA if requested will review the economic of a new contract or business and/or another preferential purchasing program. The Committee will assign products or services based on items (a) and (b) above.

(c) The Work Center proposing a product and/or service should complete action to place it on the approved list within sixty (60) days. If, within sixty (60) days, the Work Center has not completed action, the Committee may reassign the product and/or service to another Work Center capable of producing the product or performing the service within thirty (30) days. Priority in assignment will be determined by the order in which the Work Centers proposed the product and/or service.

Sec. 4. Distribution of Orders

The CCA shall distribute orders from the various state and/or local purchasing units to Work Centers which the Committee has approved to produce the specific product or perform the particular service. When the Committee has approved two (2) or more participating agencies to produce the same product or perform the same service, the CCA shall distribute orders among those approved Work Centers in a fair and equitable manner, based primarily on the capability to produce/provide as assessed.

Sec. 5. Fees

(a) The fees (commission) the CCA shall charge work centers for facilitating their participation under the Act shall not exceed the rate approved and reviewed from time to time by the Committee.

(b) The CCA shall prepare a written agreement for payment for the fee (commission) which will be executed by each designated Work Center.

(c) The written agreement, discussed in part 3.5(b), shall contain a provision to rebate to the CCA the commission from the Work Centers.

POLICY 4. Work Centers’ Participation

Sec. 1. General

To participate in State Use activities, a work center shall be represented by the CCA and comply with statutory requirements and all Committee policies and procedures.

Sec. 2. Procedures for Qualification

(a) To qualify for participation, a Work Center or State Use Marketing Outlet will submit to the Committee, through the Central Coordinating Agency, the following documents, transmitted by a letter signed by an officer of the corporation, and/or chief administrator for the corporation:

1. A legible copy of the Certificate of Incorporation granted by the Secretary of State.
2. A legible copy of the Internal Revenue Service certificate indicating that the corporation has been approved as a not-for-profit organization.
3. A legible copy of the most current certificate granted by the United States Department of Labor.
4. A written statement that the Work Center subscribes to a philosophy of least restrictive environment and for these purposes affords the option to people with disabilities to select a Work Center as a viable alternative to normal competitive employment outside the Work Center. This alternate employment environment shall be integrated with able bodied persons who will not exceed 49% of the direct labor work force.

   (i) A worker with a severe disability for these purposes means any person who is so severely incapacitated by any physical; mental or medical disability that he/she cannot engage in normal competitive employment because of such disability without intervention or support.

   (ii) Direct labor means all work required for preparation, processing, assembly, reforming of raw materials and/or
   packaging of a product or work directly related to performance of a service, excluding supervision, administration, inspection and shipping. Direct labor includes all work performed at the work center.

5. A written statement that the Work Center intends to comply with sections 503 and 504 of the Rehabilitation Act of 1973, as amended.

(b) The Central Coordinating Agency will notify the Committee, in writing, that the Work Center has submitted the required documentation and is eligible to participate. Only the Committee can approve eligibility.

(c) The Committee shall review the documentation and, if acceptable, approve and notify the work center in writing of their approved designation and present each with a certificate.

(d) The procurement procedures established by the Department of Administration shall also apply to the State Use participant. Only Work Centers approved by the Committee are exempted from established laws and rules requiring competitive bidding.

(e) To maintain its qualifications under the Act, each work center approved and/or authorized to participate must continue to meet the requirement as set forth in paragraph 4.1(a)(1-5) respectively of these regulations and shall complete and submit acceptable annual renewal documentation to the CCA by February 15th for the next calendar year.

Sec. 3. Responsibilities

(a) Provide products or perform services in strict accordance with guidelines adopted by the Committee.

(b) Maintain Records

1. Number of increased opportunities for employment for persons with severe disabilities engaged in the production of products or provision of services.
2. The total sales each quarter as a result of State Use contracts and how this impacts or compares to overall agency income.
3. Maintain a file on each individual with severe disabilities which includes a written report prepared by a licensed physician, psychiatrist, and/or qualified psychologist reflecting the nature and extent of the disability or disabilities that cause such person to qualify as a person with disabilities.
4. Maintain a file on each individual with severe disabilities which includes reports of service program evaluation and annual reevaluation of the individual’s capability for normal competitive employment prepared by a person or persons qualified by training and experience to evaluate work potential, interest, aptitudes and abilities of persons with disabilities. These reports verify the fact, based on the most recent evaluation of the individual’s quantity and quality of production and such other factors as may be appropriate, that such person is unable to engage in normal competitive employment because of a mental or physical disability.
5. Request from each participating qualified non-profit agency for persons with disabilities a quarterly report that describes the volume of sales for each product or service sold under this chapter.

(c) Keep records relevant to activities under the Act available for inspection at any reasonable time and due notification.

(d) Submit documentation regarding eligibility for participation in the Act on an annual basis as set forth in section 4.2(f).

(e) Complies with laws governing private not-for-profit corporations.

(f) Work Center must be certified by the Wage and Hour Division of the U.S. Department of Labor.

(g) Meets/exceeds minimum requirements of the Commission of Accreditation for Rehabilitation Facilities (CARF).

(h) Utilizes affirmative action procedures in employment practices.

Sec. 4. Subcontracting

Work Centers – shall seek broad competition from suppliers for raw materials and vital components which are to be included in products and/or services provided under the Act. Work Centers shall inform the CCA before entering into multiyear contracts for raw materials or components used in the products and services approved under the Act.

Sec. 5. Production

In the production of products and provision of services under the Act, a Work Center or an alternative program structures such as a mobile work crew or an enclave shall make an appreciable contribution in direct labor to the reforming of raw materials, the assembly of components or packaging or a combination thereof. Pure jobbing of an item is not permissible. Each case will be reviewed on an individual basis by the Committee and judgements rendered according to the facts presented.

Sec. 6. Violations

(a) Any alleged violations of, or failure to comply with, the initial operating or subsequent operating procedures will be investigated by the Central Coordinating Agency.

(b) The Central Coordinating Agency will notify the Work Center of the alleged violation and afford it the opportunity to submit a statement of facts and evidence.

(c) The Central Coordinating Agency will report the findings to the Committee, together with its recommendations, including a recommendation of whether allocations to the Work Center should be suspended for a time.

(d) In review of a case, the Committee may request the submission of additional evidence or may hold an inquiry into the matter.

(e) Pending a decision by the Committee, the Central Coordinating Agency may be directed by the Committee to temporarily suspend orders to the Work Center.