1 Texas Department of Agriculture The Food Service Management Company Contracting Process Food and Nutrition Division Texas Department of Agriculture

2 Introduction Target Audience: School Food Authorities (SFA) Purpose: Familiarization with requirements and processes for contracting with Food Service Management Companies (FSMC) Major Areas Covered: Evaluation, advertisement process, Request for Proposal (RFP)/Contract development, RFP/Contract execution, renewal, re-advertise, and cancellation

3 Objectives By the end of this session… Evaluate considerations for contracting List two proposal/contract options Identify necessary documentation to submit List notification requirements for renewal/ cancellation Explain re-advertising requirements Identify documentation deadlines

4 Evaluation Financial Analysis: Profit and loss statements, total cost of operations, direct and indirect costs Exceptional/normal operational concerns: Facilities, equipment, food service staff Intangibles: Management initiatives / experience, future goals and visions

5 RFP/Contract Process SFA requests RFP/Contract packet from the Texas Department of Agriculture (TDA) Packet includes a standardized RFP/Contract RFP/Contract packet available November of each year

6 RFP/Contract Process (cont.) The RFP/Contract specifies the responsibilities of the FSMC and the responsibilities of the SFA The RFP/Contract contains two payment options: Fixed Meal Rate C ost Reimbursable

7 RFP/Contract Process (cont.) Fixed Meal Rate option: FSMC charges a fee per meal FSMC, at SFAs choice, may have full purchasing authority FSMC prepares and serves meals FSMC may control staff management

8 RFP/Contract Process (cont.) Cost Reimbursable Option FSMC charges a fee for general and administrative expenses which covers administrative overhead provided by FSMC and a management fee which is is profit and also bills for direct costs and some indirect costs. SFA has more control over costs SFA maintains control over more aspects of cost, such as purchasing of raw product for meals, however, SFA may delegate purchasing to FSMC.

9 RFP/Contract Process (cont.) SFA submits RFP/Contract to TDA TDA approves or recommends changes Final RFP/Contract to be advertised by SFA must be sent to TDA for approval by by February 15 of each year SFA must: advertise RFP/Contract, and receive, review and evaluate responses

10 RFP/Contract Process (cont.) Federal regulations require: SFAs to use competitive procurement practices Competitive procurement at least once every 5 years State regulations require: SFAs to publicly advertise the RFP/Contract, send it to all TDA approved FSMCs Contact TDA at (888) for vendor list

11 RFP/Contract Process The SFA can then: On a limited basis negotiate with the vendor Complete the RFP/Contract as appropriate The RFP/Contract is designed to meet federal and state requirements, provide free and open competition between FSMCs, and standardize the contracting process so that SFAs are able to evaluate and compare proposals

12 RFP/Contract Process (cont.) The SFA must submit the unsigned RFP/contract to TDA by April 30 of each year TDA may make recommendations or direct changes to the terms listed on the document SFA makes recommended changes and submits revised document to TDA for re- evaluation and final approval

13 RFP/Contract Process (cont.) The SFA and FSMC sign RFP/Contract Signed signature page due to TDA no later than July 1 TDA approves the document If the document is altered without TDA approval, it may result in the SFA not being able to use Child Nutrition funds to pay for its FSMC contract Only after the RFP/Contract is completed may the SFA and the FSMC begin operations

14 RFP/Contract Process (cont.) FSMC Responsibilities: The FSMC must deliver all of the contracted items listed in the RFP/Contract in a timely manner SFA Responsibilities: The SFA maintains ultimate responsibility for all aspects of the Child Nutrition programs

15 RFP/Contract Process (cont.) The Contracting Period: 1 year term SFAs can renew RFP/Contract up to four times (one year at a time) Maximum total contracted period of 5 years

16 RFP/Contract Process (cont.) TDA will provide appropriate documents to SFAs in November of each year At the end of each one year term, SFA may choose to renew original agreement for up to four renewals, re- bid its FSMC service or cancel the contract

17 Renewal Term of contract is from July 1 of school year to June 30 of school year Renewal information due by April 30 of each year Documentation includes: Intent to Renew letter Current and upcoming years food service budget TDA Contract Renewal Checklist Anti-Collusion Affidavit

18 Renewal (cont.) Documentation includes (cont): Methodology for increasing fees Certification Regarding Lobbying Certification Regarding Debarment District Employee Contact Information List of Campuses Served by the FSMC Cooperative purchasing agreements Amendments and other documentation

19 Contract Renewal (cont.) The FSMC and SFA: May change fees, upon mutual agreement, only in accordance with the specifications in the RFP/Contract and at the time of renewal Explanation of the fee change methodology must accompany renewal application

20 Contract Renewal (cont.) TDA must approve the renewal documentation before the start of each school year Without TDA approval, the School Food Authority may not be able to use Child Nutrition funds to pay its FSMC

21 Re-advertising the RFP/Contract SFA may choose to re-bid the RFP/Contract at the end of the one year term SFA must follow all steps listed for bid- process

22 Contract Cancellation A SFA must notify TDA if it decides to return to a self-operated food service program The notification must be: in writing signed by SFA on official school letterhead

23 Conclusion If you have any questions about using a FSMC, please call 888-TEX KIDS ( )

24 Texas Department of Agriculture Our services are provided through the Texas Department of Agriculture s Food and Nutrition Program funded by the U.S. Department of Agriculture, Food & Nutrition Division. In accordance with federal law and U.S. Department of Agriculture policy, this institution is prohibited from discriminating on the basis of race, color, national origin, sex, age or disability. To file a complaint of discrimination, write: USDA, Director, Office of Adjudication and Compliance, 1400 Independence Avenue, SW, Washington, D.C or call (800) or (202) (TTY). USDA is an equal opportunity provider and employer.