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FFVP Fees in Food Service Mgmt. Company Contracts


Nutrition Services Division Management Bulletin
Purpose: Policy, Beneficial Information
To: School Nutrition Program Sponsors Number: USDA-SNP-39-2012
Attention: Food Service Directors and Business Officials Date: November 2012
Subject: Fresh Fruit and Vegetable Program Fees in Food Service Management Company Contracts
Reference: U.S. Department of Agriculture, Food and Nutrition Service, Policy Memo SP 33-2012: Fresh Fruit and Vegetable Program Fees in FSMC Contracts http://www.fns.usda.gov/cnd/governance/policy.htm

This Management Bulletin (MB) provides guidance for school food authorities (SFA) that allow their contracted food service management company (FSMC) to charge a fixed fee to the Fresh Fruit and Vegetable Program (FFVP) grant. This guidance is outlined in the U.S. Department of Agriculture (USDA), Food and Nutrition Service (FNS), Policy Memo SP 33-2012: FFVP Fees in FSMC Contracts.

The current USDA FFVP Handbook for Schools indicates that allowable FFVP costs can be broken into two categories: administrative and operational. Sponsors can access the FFVP Handbook for Schools Web document at http://www.fns.usda.gov/sites/default/files/handbook.pdf. Operational costs are the main costs of running the FFVP, and include:

It is important to note that SFAs must use the majority of FFVP funds on the purchase of fresh fruits and vegetables, direct labor, and small supplies. The remaining funds, which cannot exceed 10 percent, must be devoted to planning and managing the program. SFAs are encouraged to fully review all non-food costs as to reasonableness. SFAs must submit FFVP claims that are allowable, verifiable, and fully documented. SFAs must report minimal labor costs in a manner that clearly distinguishes operational and administrative costs, and the actual time allocated to the FFVP. Please refer to the USDA FFVP Handbook and policy memoranda for more information on allowable costs and how to claim them.

Prior to executing an FFVP contract with an FSMC, the SFA must carefully review all contractual provisions allowing the FSMC to charge costs other than actual costs of fresh fruits and vegetables. SFAs are mandated to adhere to the cost limitations within the FFVP, specifically that administrative costs shall not exceed 10 percent of the overall grant.

SFAs must ensure that FSMC contracts include provisions that require the FSMCs to provide full and detailed documentation of allowable costs. The SFA should then use this information provided by the FSMC as a basis for its reimbursement claim under the FFVP (e.g., labor costs, administrative costs, and invoiced costs of fresh fruits and vegetables, etc.). If the FSMC does not provide this information, the SFA is encouraged to exercise one of two options: consider running the FFVP separately from its existing FSMC contract; or relinquish its grant funding. Please remember that any material changes to an existing contract will necessitate that the SFA rebid the contract. A material change to a contract is a modification that exceeds the terms of the original solicitation and resulting contract, and that is substantial enough that had other bidders been aware of the change during the bidding process, they might have bid differently.

In order to claim reimbursement under the FFVP, SFAs are required to comply with the following guidance:

If you have any questions regarding this MB, please contact the School Food Service Contracts Unit at 916-319-0636.

Questions:   Nutrition Services Division | 800-952-5609
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