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Revenue from Nonprogram Foods in FSMC Contracts


Nutrition Services Division Management Bulletin

Purpose: Policy, Beneficial Information

To: All School Nutrition Program Sponsors

Attention: Food Service Directors and School Business Officials

Number: SNP-06-2017

Date: May 2017

Reference: U. S. Department of Agriculture Policy Memoranda SP 39-2011, SP 13-2014, and SP 20-2016; Title 7, Code of Federal Regulations, Section 210.14(f); Subsection 12(q) of the Richard B. Russell National School Lunch Act amended by Section 206 of The Healthy Hunger-Free Kids Act of 2010; Management Bulletins USDA-SNP-36-2012 and SNP-12-2014

Subject: Revenue from Nonprogram Foods for FSMC—Updated Guidance


This Management Bulletin (MB) provides updated guidance from the U.S. Department of Agriculture (USDA) Policy Memorandum SP 20-2016: Nonprofit School Food Service Account Nonprogram Food Revenue Requirements about the new USDA requirement for fixed-price food service management company (FSMC) contracts to provide essential nonprogram food cost information.

This policy memo is located on the USDA Food and Nutrition Service (FNS) web page at https://www.fns.usda.gov/nonprofit-school-food-service-account-nonprogram-food-revenue-requirements and provides updated questions and answers regarding Assessing Compliance with Nonprogram Revenue Requirements.

The USDA policy memo SP 20-2016 provides nonprogram food guidance for FSMCs in Question No.14. Specifically, the policy memo states that in School Year (SY) 2016–17, the USDA requires all school food authorities using FSMC fixed-price contracts to comply with the nonprogram food requirements set forth in Title 7, Code of Federal Regulations, Section 210.14. If your fixed-price FSMC contract, awarded on a per meal basis, does not contain the food cost data needed to determine the revenue for the nonprogram food, then your next solicitation or contract extension for an FSMC fixed-price contract must include language that clearly identifies the requirement for respondents to provide essential nonprogram food cost information.

For example, the language in the solicitation or contract extension should require the FSMC to annually provide current food costs for reimbursable meals, food costs for nonprogram foods, revenue from nonprogram foods, and total revenue. Nonprogram foods include a la carte, catering, vending, stores operated by students, or any other sales generated through the nonprofit school food service account.

The language in the solicitation or contract extension should require the FSMC to annually provide historical information on the type and value of nonprogram foods and meals to be offered in other food service operations such as catering.

Contact Information

If you have any questions regarding this subject, please contact your Procurement Resources Unit (PRU) contract specialist. You can also contact the PRU by email at SFSCONTRACTS@cde.ca.gov to be directed to your contract specialist.

Questions:   School Nutrition Programs Unit | 800-952-5609
Last Reviewed: Monday, August 5, 2019
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