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A food service management company (FSMC) contract is one in which the contractor manages some aspect of the school food service program. Generally, the FSMC prepares and serves the meals and/or manages the school meal program(s).

In a vended meals contract, the contractor provides the meals only (generally pre-packaged/ pre-plated) and does not manage any aspect of the school food service. However, if the contractor's employees are responsible for the management of the program and/or for the final preparation and/or serving of pre-packaged/pre-plated school meals, the contract becomes a FSMC contract and is no longer considered a vended meals contract. If that is the case, you should click on the red box below.

If you are not sure which type of contract you have or you are considering contracting for the first time, please contact our office for further information and clarification (800-545-7892).

To obtain the prototype contract forms and documents, please click on the appropriate link below.

 Third Party Contracting — Public Act 095–0241

Public Act 095–0241, effective August 17, 2007, outlines additional requirements for school districts that choose to contract with a third party for non-instructional services. Regarding school meal services, the legislation impacts school districts with employees who perform services for the school meal program and are considering contracting with a third party to perform those school meal program services. For example, if the school district employs staff to perform various meal service-related tasks, the school district is required to implement new procedures as part of the contract solicitation and award process. Links to the Public Act and the summary of the requirements are provided below.

 State Agency Responsibilities

When a school food authority (SFA) contracts with a food service management company (FSMC), the state agency is required to annually review each contract to ensure the contract meets all regulatory requirements. Each state is required to conduct an on-site review of each SFA contracting with a FSMC to determine the SFA's compliance with all provisions and standards set forth in regulations. The state agency's on-site review of the SFA-FSMC operation must be conducted once every five years and be sufficient in scope to ensure compliance.​

 School Food Authority Responsibilities

The National School Lunch Program regulation 210.16 permits a school food authority to contract with a food service management company to manage its school food service operations; the regulations prohibit delegation of certain duties. It is the SFA's responsibility to ensure its food service operation is in conformance with the SFA's agreement under the program.

The SFA is responsible for:

  • Observing the limits on the use of nonprofit food service revenues including the use of nonprofit food service account funds to pay only allowable costs regardless of the costs billed by the FSMC;
  • Determining and verifying the eligibility of children for free and reduced-price meals;
  • Ensuring only reimbursable meals are included on the claim for reimbursement regardless of the number of meals billed by the FSMC; and
  • Not permitting the accrual of all income and expenses to the FSMC.

A school food authority is required to have specific procedures in place to determine the validity of meals claimed for reimbursement. To ensure the validity of meal counting and claiming systems at the schools under its jurisdiction, the SFA must conduct an on-site review of each school prior to February 1 of each school year. If the review identifies problems with a school's meal counting or claiming procedures, the SFA shall ensure the school implements corrective action and, within 45 days of the review, the SFA must conduct a follow-up, on-site review to determine if the corrective action resolved the problems. Whether a SFA self-operates its food services or uses a food service management company, the SFA must conduct the on-site review and remains responsible for ensuring deficiencies are identified and effective actions are taken to correct any deficiencies found.​​​​

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