2-02 Vendor Selection Criteria

2.02 Vendor Selection Criteria

Effective Date: 08/01/2025

PURPOSE:

To outline the minimum requirements Vendors must meet in order to be eligible for authorization and continued participation in the WIC Program.

DEFINITIONS:

Fiscal quarter means each consecutive three (3) month period of the fiscal year, which begins on October 1. Fiscal quarters begin on October 1, December 1, March 1, and June 1, respectively.

Full-line Vendor means a Vendor who is authorized to provide all WIC-approved foods in exchange for WIC benefits. Full-line Vendors may be grocers or grocers with on-site pharmacies.

Grocer means a full-line Vendor that does not have an on-site pharmacy.

Grocer with Pharmacy means a full-line Vendor that has a pharmacy on-site.

Pharmacy Vendor means a Vendor who is authorized to provide only WIC-approved formulas and nutritionals in exchange for WIC benefits. Pharmacy Vendors may be grocers with on-site pharmacies or stand-alone pharmacies.

Specialty store means a store that sells a specialized line or category of products. For example, a vegetarian store or a co-op selling primarily local products.

Stand-alone Pharmacy means a pharmacy that is not connected to or contained within a grocery store.

Supply chain disruption means a shortage of WIC supplemental foods that limits WIC participants’ ability to reasonably purchase WIC foods within a state agency’s jurisdiction, as determined, and declared by the Secretary of Agriculture. Disruptions include but are not limited to: labor shortages, temporary business disruptions, delays in the availability of products, production issues, a mismatch between supply and demand, or other shortages and/or recalls impacting WIC supplemental foods.

Unique format store means a store that deviates in some way from the traditional model of other stores owned by the same company and thus may not carry the same range of products. For example, a small format store or community market owned by a company that typically focuses on supercenters.

WIC-approved foods mean supplemental foods approved by the State for issuance to eligible WIC participants. All WIC-approved foods are listed in the Approved Product List (APL).

WIC nutritionals means medical foods approved by the State that are specifically formulated to provide nutritional support for WIC participants with a qualifying condition.

WIC-accepted supplier means a supplier of WIC-approved foods and/or formulas that is:

1. A Michigan based wholesaler, distributor, or retailer that is licensed to distribute food by the Michigan Department of Agriculture and Rural Development (MDARD);
2. A non-Michigan based wholesaler, distributor, or retailer that is licensed to distribute food by the MDARD equivalent in the jurisdiction in which it is located;
3. A Michigan based pharmacy that is licensed by the Michigan Department of Licensing and Regulatory Affairs (LARA);
4. A non-Michigan based pharmacy that is licensed by the LARA equivalent in the jurisdiction in which it is located; or
5. A manufacturer that is registered with the Food and Drug Administration (FDA).

A regularly updated list of MDARD-licensed sources can be found on the WIC Vendor website at Michigan.gov/WICVendor. Please contact the Michigan WIC program if you have questions about whether a supplier is WIC-accepted.

POLICY:

1. Vendors requesting authorization for participation in the WIC Program must meet all of the applicable WIC Vendor Selection Criteria outlined below. Vendors must continue to meet this selection criteria throughout their contract period.
2. Failure to meet any of the selection criteria may be used as just cause for denial of a WIC Vendor Application for authorization or termination of a current WIC Vendor Contract. (See Exhibit 2.01B WIC Vendor Application, 2.01C WIC Pharmacy Vendor Application, 2.05A WIC Vendor Contract, and 2.05B WIC Pharmacy Vendor Contract.)
3. The Department will review WIC Vendor Applications utilizing some or all of the following selection criteria based on store designation:
   1. All Vendors (Grocer; Grocer with Pharmacy; Pharmacy):
      1. Compliance with competitive prices and price limitations as determined by the Department.^F (See Vendor Policy 2.03 Vendor Peer Groups.)
      2. Lack of any conflict of interest between the Vendor and the local agency or the Department as defined by applicable State laws, regulations and policies.*
      3. Business integrity as determined by the Department. Unless denying authorization of a Vendor applicant would result in inadequate participant access, the Department will not authorize a Vendor applicant if during the past six years the Vendor applicant or any of the Vendor applicant’s current owners, officers, or managers have been convicted of or had a civil judgment entered against them for any activity indicating a lack of business integrity. Activities indicating a lack of business integrity include, but are not limited to, fraud, antitrust violations, embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property, making false claims, and obstruction of justice.*^F
      4. Compliance history with WIC program policies, rules and regulations, as applicable, and compliance with any prior contract with the Department. In the case of stores owned jointly or by corporations, the Department may evaluate past performance of one or more of the same partners, shareholders, directors or officers at other locations.*
      5. Lack of negative history indicating the store was sold by its previous owner in an attempt to circumvent a WIC sanction. The Department will consider such factors as to whether the store was sold to a relative by blood or marriage of the previous owner(s) or sold to an individual or organization for less than its fair market value. The Department may also consider other factors in making its determination.*
      6. Purchase of WIC-approved foods, formulas and medical foods exclusively from WIC-accepted suppliers.^F
   2. Full-line Vendors (Grocer; Grocer with Pharmacy)
      1. Availability of mandatory minimum stock of WIC-approved foods. (See Exhibit 2.02A WIC Vendor Minimum Stock Requirements.)*^F
         1. At its discretion, the Department may allow exceptions to the Minimum Stock Requirements (MSRs). MSR exceptions may be temporary or permanent, as described below:
            1. The Department may allow temporary exceptions to the MSRs for some or all Vendors in instances where normal retail distribution has been deemed unsuccessful (i.e., during federally declared emergency periods and/or supply chain disruptions). (See Vendor Policy 5.07 Compliance During Emergencies & Disruptions.)
            2. The Department may grant select Vendors a permanent exemption from a specific MSR requirement that lasts the duration of the Vendor’s contract. Exemptions may be granted, but are not limited, to ethnic, religious or other unique format and specialty stores. (See Exhibit 2.05D WIC Contract Exemption Form.)
         2. Exceptions to the MSRs may not include the federally required supplemental foods (i.e., two different fruits, two different vegetables, and one approved whole grain cereal) or overrule the requirement to purchase WIC foods from a WIC-accepted supplier.
      2. Documented authorization in the Supplemental Nutrition Assistance Program (SNAP). A WIC Vendor must be in good standing with the USDA Food and Nutrition Service.*^F
      3. Valid license issued by the Michigan Department of Agriculture & Rural Development (MDARD).*
      4. Minimum required volume of WIC transactions. A Vendor that transacts less than $800 in WIC EBT transactions per fiscal quarter will be considered a low volume Vendor, which may indicate lack of demand for that particular store. Vendors will receive a warning the first quarter they are found out compliance with this requirement. If a Vendor is not in compliance with the requirement to transact $800 or more in WIC EBT transactions during the next fiscal quarter, the Vendor will be terminated and disqualified. New Vendors will be evaluated after the first full fiscal quarter of authorization.*
      5. Total WIC sales for any annual period that do not exceed 50% of the Vendor’s total annual food sales.
   3. Pharmacy Vendors (Grocer with Pharmacy; Stand-alone Pharmacy)
      1. Valid Pharmacy License and good standing with the Department of Licensing and Regulatory Affairs (LARA).*
      2. Ability and willingness to order WIC-approved formulas and nutritionals when requested by a WIC participant or WIC program representative.*
4. Any of the above selection criteria followed by an asterisk(*) may be waived for Vendors or Vendor applicants needed to ensure participant access. (See Exhibit 2.05D WIC Contract Exemption Form and Vendor Policy 2.04 Vendor Limitation Policy.)
5. The Department may reassess an authorized Vendor at any time during the Vendor’s contract period using the Vendor Selection Criteria in effect at the time of the reassessment and may terminate contracts with those Vendors that fail to meet them. (See Vendor Policy 2.06 Contract Expiration & Termination.)

^F Indicates a mandatory federal selection criterium.

References:

7 CFR Part 246.12 (g)(h)(t)

Cross-References:

2.03 Vendor Peer Groups

2.04 Vendor Limitation Policy

2.06 Contract Expiration & Termination

5.07 Compliance During Emergencies & Disruptions

Exhibits:

2.01B WIC Vendor Application

2.01C WIC Pharmacy Vendor Application

2.02A WIC Vendor Minimum Stock Requirements

2.05A WIC Vendor Contract

2.05B WIC Pharmacy Vendor Contract

2.05D WIC Contract Exemption Form