Nutrition Services Division Management Bulletin
To: Residential Child Care Institutions (RCCIs)
Attention: Food Service Directors
Date: February 1999
|From: School Nutrition Programs|
Subject: Contracting with Executive Management Services for Food Service Management
This management bulletin transmits the U. S. Department of Agriculture (USDA), Food and Nutrition Service, All Points Bulletin (APB) SP-99-08 stating that USDA has determined that Executive Management Services (EMS) is a Food Service Management Company (FSMC). EMS is a private, for-profit company that assists RCCIs to develop and operate their school meal programs. The APB further describes the requirements for payment of services provided by a FSMC with the money received from meal reimbursements under the National School Lunch Program and School Breakfast Program. Food service revenues are the funds received from meal reimbursements through the National School Lunch Program or School Breakfast Program.
RCCIs may contract with a FSMC to manage any aspect of their
food service operation. However, in order to pay the FSMC with
food service revenues, you may only obtain the services through
what is called competitive procurement. For contracts over
$100,000 [$150,000 as of 2013], this involves publicly announcing the need for service and inviting
companies to submit their written offers describing how they can
meet your needs.
$100,000 [$150,000 as of 2013] or less may be procured using a less formal
procedure of contacting a minimum of three companies that provide
this type of service. From these contacts, you will select a company.
A record of the names and phone numbers of the companies you contacted,
the information they gave you about their services, and the reason
for your selection must be available in your files. If the services
are less than $100,000 [$150,000 as of 2013] you cannot pay for the services of a FSMC
with food service revenues unless the three price quotes are obtained
before you select the company.
Please refer to the School Nutrition Programs Guidance Manual, Section 9000, for detailed information regarding procurement procedures and FSMC contract requirements.
Be aware that if food service revenues are not used to pay for the services of a FSMC, you must closely monitor your net cash resources to ensure that they do not exceed the limit. Net cash resources are all funds received for meal reimbursements minus your meal program expenses. Federal regulations allow you to have the equivalent of only three months of food service expenditures in the food service account. Any amount over that would require you to use the funds for improvements in your food service program, such as improving food quality. If you do not take action to reduce the amount of money in your food service account, the state is required to reduce the amount of reimbursement.