FSMC Sample Proposal and Contract
Nutrition Services Division Management Bulletin
|Purpose: Policy, Action Required, Beneficial Information|
National School Lunch Program and School
|Attention: Food Service Directors, Superintendents, Business Officials, Administrators, and Executive Directors||Date: December 2013|
|Subject: Sample Request for Proposal and Model Contract for Food Service Management Companies|
|Reference: Title 7, Code of Federal Regulations, sections 210.19(a)(5) and 210.21|
The California Department of Education (CDE) is issuing this Management Bulletin (MB) to notify School Food Authorities (SFAs) participating in the federal School Nutrition Programs (SNP) of the availability of a sample Request for Proposal (RFP) and model contract for soliciting the services of a Food Service Management Company (FSMC). The sample RFP and contract are not to be construed as a “prototype,” but are intended as an illustrative sample to assist SFAs to comply with applicable federal and California state procurement requirements.
The CDE’s Nutrition Services Division (NSD) and Legal Division (LD) developed this sample RFP and model contract in response to the U.S. Department of Agriculture’s (USDA) regulation requiring state agencies and SFAs to comply with the procurement standards of Title 7, Code of Federal Regulations (7 CFR) Section 210.21 regarding procurement, generally stated at 7 CFR Section 210.21(a):
State agencies and school food authorities shall comply with the requirements of this part and 7 CFR part 3016 or 7 CFR part 3019, as applicable, which implement the applicable Office of Management and Budget Circulars, concerning the procurement of all goods and services with nonprofit school food service account funds. [Note: Effective October 1, 2015, Title 7 Code of Federal Regulations, parts 3016 and 3019 have been superseded by Title 2, Code of Federal Regulations, Part 200.]
Definition of School Food Authority and Food Service Management CompanyAn SFA is defined in 7 CFR Section 210.2 as a governing body which is responsible for the administration of one or more schools; and has the legal authority to operate the SNPs therein or be otherwise approved by Food and Nutrition Service (FNS) to operate the SNPs.
An FSMC is defined in 7 CFR Section 210.2 as a commercial enterprise or a nonprofit organization which is or may be contracted with by the SFA to manage any aspect of the school food service.
School districts and county offices of education contracting with an FSMC may not eliminate or adversely affect staff and/or positions of any classified food service personnel and FSMC staff may not supervise classified food service personnel (California Education Code [EC] sections 45103.1[a] and 45103.5).
An FSMC typically provides such services as:
- Full service operation of the food service program
- Inventory management
- Preparation, delivery, and service of meals
Companies that merely provide vended meals (preparation and delivery) are not FSMCs under 7 CFR Section 210.2. While there is not a current preapproval requirement for vended meal contracts, SFAs participating in the federal school nutrition programs must still follow federal procurement regulations to obtain the services provided under these types of contracts.
How to Use the Sample Request for Proposal and Contract
SFAs seeking the services of an FSMC may use the sample RFP and model contract. SFAs may, to some extent, modify these samples to develop a solicitation for services that meets their needs. For example, if the FSMC will not manage the USDA Foods program, the contract language in Section V of the Model Contract may need to be modified or eliminated. The CDE’s School Food Service Contracts Unit (SFSCU) will work with SFAs to refine their solicitation to allow the SFA to acquire the desired FSMC services and comply with required regulations. However, certain clauses in the sample RFP and model contract are required and may not be modified or eliminated. These clauses are highlighted in the model contract. Note: The preceding sentence has been stricken because it is no longer valid. Once the CDE approves the SFA’s changes to the sample RFP/contract, the SFA may release both the RFP and contract to potential contractors. After the SFA has completed the solicitation process and selected an FSMC, the SFA must submit the proposed contract and all supporting documents to the CDE for approval prior to executing the contract.
Although negotiation is part of the solicitation process, potential contractors may not write or alter the RFP and contract, develop solicitation documents, or conduct the proposal process if their firm or a subsidiary plans to submit a proposal. If a potential contractor performs any of these functions it jeopardizes the bid process and renders the proposer ineligible to compete (7 CFR Section 3016.60). [Note: Effective October 1, 2015, Title 7 Code of Federal Regulations (7 CFR), Section 3016.60 has been superseded by Title 2, Code of Federal Regulations, Section 200.319[a].]
SFAs that allow a potential contractor to perform any of these functions and then awards the contract to that company may not use cafeteria funds to pay for the services provided under that contract.
The CDE does not intend this sample RFP and model contract to be a “prototype,” inclusive of all terms, provisions, and program requirements applicable to FSMC procurements and contracts. The SFA remains solely responsible for ensuring that their procurement documents comply with all applicable laws, program instructions, and guidance materials. SFA officials should carefully review and understand these materials before submitting them to the CDE for approval. The SFA should consult with their legal counsel regarding any proposed procurement methods or contract language.
Section 210.19(a)(5) of 7 CFR states:
Each State agency shall review each contract amendment (including all supporting documentation) between a school food authority and food service management company to ensure compliance with all the provisions and standards set forth in this part before execution of the amended contract by either party.
When School Food Authorities Should Submit Their Solicitation Documents
Since school years begin on July 1, so do most FSMC contracts. Considering the length of time required to conduct a solicitation process and obtain CDE approval, SFAs should submit their solicitation documents to the CDE at least 125 calendar days prior to the anticipated execution date of the contract. SFAs using the sample RFP and model contract are not exempt from CDE approval prior to posting a public notice of intent to release the solicitation.
The CDE proposes the following steps and timeline (using calendar days) for the RFP and contract approval process during which the SFSCU’s contract specialists will provide assistance and support:
- SFA submits initial RFP package to CDE
- CDE reviews and approves RFP documents (90 days)
- SFA advertises RFP and allows a minimum of 21 days for FSMCs to submit proposals
- SFA evaluates proposals and awards contract (7 days)
- SFA and FSMC negotiate contract terms determined by the SFA (7 days)
- SFA submits all solicitation documents and proposed contract to CDE
- CDE reviews and approves the proposed contract (30 days)
- SFA incorporates contract terms as recommended by CDE (5 days)
- SFA executes contract (5 days)
- SFA submits copy of executed contract to CDE
- CDE reviews and approves executed contract, requests changes if executed contract differs from approved proposed contract (7 days)
In August each year, the SFSCU will notify SFAs that have expiring contracts that their contract is due to be rebid. The notification will include a Procurement Questionnaire that SFAs are required to complete and return to the SFSCU. The SFSCU will respond by giving the SFA a due date for submitting the solicitation package. The SFSCU sent three letters dated August 16, 2013, October 14, 2013, and December 3, 2013, to SFAs with contracts expiring in June 2014, notifying them of their January 2, 2014, submission deadline. It must reach the SFSCU no later than this date, and annually thereafter by the end of the first week in January in order to provide sufficient time for review and approval prior to implementing the contract. SFAs may submit their solicitation package by e-mail to SFSCONTRACTS@cde.ca.gov, or by mail to the SFSCU at:
Nutrition Services Division
California Department of Education
1430 N Street, Suite 4503
Sacramento, CA 95814-5901
Under 7 CFR sections 210.24, 215.15, and 220.18, the CDE may withhold program funds (reimbursement) from an SFA that is noncompliant with any section of the applicable program and procurement regulations. To prevent the withholding of federal and state meal reimbursement, the CDE recommends that SFAs ensure compliance with all applicable federal and state program and procurement regulations, statutes, and policies.
Reminder About Competitive Procurement RequirementAll SFAs planning to utilize the services of an FSMC are required to conduct a competitive proposal process. A competitive proposal process provides open and free competition and eliminates potential restrictions to such competition. Federal guidelines require SFAs to conduct their procurement using either an informal or formal procurement process. The one-year contract value determines which procurement process should be used. If the one-year value of the contract is at or above the small purchase threshold, SFAs must use the formal procurement process. SFAs may use the informal procurement process if the one-year contract value is below the small purchase threshold. All procurements paid from cafeteria funds must be competitive.
The small purchase thresholds for various SFA types are listed below.
- Public school districts and county offices of education, for the 2013 calendar year: $83,400
This amount is annually adjusted by the State Superintendent of Public Instruction. The annual Bid Threshold Adjustment Letter is posted on the CDE Finance and Grants Accounting Correspondence Web page at http://www.cde.ca.gov/fg/ac/co/
- Charter and private schools: $150,000 (federal threshold)
- City and county governments: The lesser of the federal threshold ($150,000) or their respective local small purchase threshold
Opportunity to Provide Feedback
SFAs may obtain a copy of the CDE sample RFP and model contract from the CDE FSMC Procurement Web page at http://www.cde.ca.gov/ls/nu/sn/fsmcproc.asp or by sending a request to SFSCONTRACTS@cde.ca.gov.
The CDE will accept suggestions and feedback regarding the sample RFP and model contract after it has been posted to the CDE Web site. Suggestions and feedback may be e-mailed to the SFSCU at SFSCONTRACTS@cde.ca.gov until January 10, 2014.
If you have questions about the information provided in this MB, please contact your School Food Service Contract Specialist. You can find your county specialist by downloading the form Caseload, located under Applications, Download Forms, in the Child Nutrition Information and Payment System (CNIPS) Web site at https://www.cnips.ca.gov or you can contact Debbie Reeves by phone at 916-319-0636 or by e-mail at firstname.lastname@example.org for assistance.
If you have questions about USDA Foods relating to your FSMC Contract, please contact Jeremy Pagan, Manager, Distribution and Processing Unit, by phone at 916-324-7132 or by e-mail at email@example.com.
You may also call 800-952-5609 and ask for the School Food Service Contracts Unit or send an e-mail to SFSCONTRACTS@cde.ca.gov.