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There are different types of contracts for school food services. Please read the following carefully if you are considering contracting for the first time, or have questions regarding the solicitation and contract procedures/processes.

Food Service Management Company: National School Lunch Program regulations under Title 7, Code of Federal Regulations (7 CFR), Section 210.2 define a food service management company (FSMC) as “a commercial enterprise or a nonprofit organization which is or may be contracted with by school food authority (SFA) to manage any aspect of the school food service.” A company is considered an FSMC if it performs one, all or a combination of the following services:

  • Providing consulting services
  • Developing menus and menu production records
  • Preparing, delivering, and/or serving meals
  • Organizing and maintaining program documents (such as daily meal counts, menus, and menu production records)
  • Preparing claims for SFA approval and submission
  • Purchasing food, supplies, and/or equipment
  • Providing program guidance and training
  • Provide staff to work onsite in an SFA facility
  • Maintaining bookkeeping records
  • Implementing other activities that would normally be performed by the SFA

Food Service Management Company – Vended Meals: National School Lunch Program regulations under Title 7, Code of Federal Regulations (7 CFR), Section 210.2 define a food service management company (FSMC) as “a commercial enterprise or a nonprofit organization which is or may be contracted with by school food authority (SFA) to manage any aspect of the school food service.” However, the SFA does not have the kitchen facilities for meals to be prepared on site. Therefore, the SFA requires the FSMC to be able to perform one, all or a combination of the services outlined above, but prepare the meals off-site at an FSMC owned/leased facility and deliver the meals in either bulk or individually pre-packaged units.

Vended Meals Company: Companies preparing and delivering meals to SFAs are meal vendors. In this capacity, a meal vendor may also develop menus and menu production records. Should additional services be provided, such as the activities listed under the FSMC definition above (usually performed by the SFA when contracting with a meal vendor), such services may constitute food service management and would need to be solicited and procured as such.

Meal vendors may not perform any of the following services:

  • Access individual student meal eligibility
  • Act as an employee of, or agent for, the SFA
  • Collect claim data
  • Collect meal payments
  • Conduct point of service meal counts
  • Provide program oversight
  • Provide staff to work onsite in an SFA facility

Please contact the Nutrition Department procurement team for further information and clarification: (800) 545-7892

Provided below are links to the forms and documents to assist you in completing a successful procurement or contract renewal.

If you are not sure which type of contract the SFA currently has, are considering contracting for the first time, or have questions regarding the solicitation and contract procedures/processes, call the Nutrition procurement team at (217) 782-2491 or (800) 545-7892 (in Illinois), or email nutritionprocurement@isbe.net​.​​

 Rules and Regulations

Bid Document Development

Federal regulations (2 CFR 200.319(a)) prohibit the awarding of contracts to any person or entity that develops or drafts specifications, requirements, statements of work, invitations for bids, requests for proposals, contract terms and conditions or other procurement documents. In failing to fulfill its responsibilities to draft its own specifications and procurement documents, a Sponsoring Organization which copies a list of features or evaluation and ranking criteria drafted by a potential vendor and then permits that potential vendor to submit a bid has violated federal regulation 2 CFR 200.319(a). This pertains to all child nutrition program procurements, including software acquisitions. 

Bid Procedures

Each Sponsoring Organization is required to have procurement procedures in place that reflect applicable state and local laws and regulations, provided that procurements made with Child Nutrition Programs funds adhere to the standards set forth in the federal regulations. Sponsoring Organization procedures must also include a written code of standards of conduct meeting the minimum standards of 2 CFR 200.318 and 2 CFR 200.326, as applicable.

Bid Protest

Any action that diminishes open and free competition seriously undermines the integrity of the procurement process and may subject a Sponsoring Organization to bid protests. Sponsoring Organizations are responsible for properly responding to protests and concerns raised by potential contractors. Pursuant to  2 CFR 200.318(a) and 2 CFR 200.318(k)​, SFAs must have protest procedures in place to handle and resolve disputes relating to their procurements and must in all instances disclose information regarding a protest to the Illinois State Board of Education Nutrition Department.

Competition

2 CFR 200.319 Competition (a) All procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Some of the situations considered to be restrictive of competition include but are not limited to:

  1. Placing unreasonable requirements on firms in order for them to qualify to do business;
  2. Requiring unnecessary experience and excessive bonding;
  3. Noncompetitive pricing practices between firms or between affiliated companies;
  4. Noncompetitive contracts to consultants that are on retainer contracts;
  5. Organizational conflicts of interest;
  6. Specifying only a “brand name” product instead of allowing “an equal” product to be offered and describing the performance or other relevant requirements of the procurement.

Third Party Contracting – Public Act 095-0241

Public Act 095–0241, effective Aug. 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.

 SFA Responsibilities When Contracting for Meals and/or Services

​For School Food Authorities (SFA) that contract with a Food Service Management Company (FSMC), Vendor, another SFA and/or any other type of contractor, the SFA must maintain responsibility for the overall operation of the Programs. The SFA cannot relinquish their control or responsibility for the administration of the meal programs to a contractor. It is important that the SFA understand that the agreement with the State Agency to administer the Child Nutrition Programs (CNP), is between the State Agency and the SFA, not the contractor. The contractor may work as an agent or perform certain portions of an SFAs tasks but there are some limitations and the SFA is ultimately responsible for adhering to all applicable federal and state rules and regulations. Per USDA Guidance​PDF Document, the SFA must remain responsible for:

  • Preparation of Solicitation and Contract Documents
    The SFA must prepare all solicitation documents, evaluation, and scoring criteria for contract award and obtain State Agency approval of the contract prior to contract execution, if applicable. Contractors that develop or draft specifications, requirements, statements of work, or invitation for bids or requests for proposals must be excluded from competing for such contracts, as per 2 CFR 200.319(a).

  • State Agency Monitoring (Administrative, Resource Management & Procurement Reviews)
    SFAs must be the responsible party in resolving findings resulting from program reviews and audits. The SFA must be involved in the review process and are responsible for the submission of any required corrective actions. The SFA is held responsible for any areas of noncompliance and subsequent fiscal action found during an Administrative Review (AR). However, since State Agencies agreement is with the SFA, the SFA may recoup funds from the contractor for related program violations.

  • Control the Quality, Extent and Nature of Food Service
    The SFA must retain control of the quality, extent, and general nature of the food service and the prices to be charged to the children for meals. This includes retaining control of the nonprofit school food service account and overall financial responsibility for the Programs operated; establishing all prices for all meals served under the nonprofit school food service account (e.g., pricing for reimbursable meals and non-program foods and meals, i.e., a la carte food services, adult meals, and other food service Programs operated, as applicable); developing the 21-day cycle menu in accordance with the meal pattern requirements for all Programs operated; conveying menu adjustment requirements to the FSMC; and monitoring implementation of those adjustments. Additionally, any refunds, rebates, discounts, and credits received from processors must be paid to the SFA for return to the nonprofit food service account.

    Nonprofit school food service account (7 CFR 210.2) means the restricted account in which all of the revenue from all food service operations conducted by the school food authority principally for the benefit of school children is retained and used only for the operation or improvement of the nonprofit school food service. This account shall include, as appropriate, non-Federal funds used to support paid lunches as provided in §210.14(e)​, and proceeds from nonprogram foods as provided in §210.14(f).

  • Signature Authority
    The SFA must retain signature authority on the agreement between the SFA and the State agency to participate in the Programs operated, including the SFA’s free and reduced-price policy statement and the Claim for Reimbursement.

  • FSMC Performance Monitoring
    When the SFA contracts with a Food Service Management Company (FSMC), the SFA must conduct performance management of the FSMC contract through periodic on-site monitoring of the contracted requirements, as per 7 CFR 210.8(a)(1), 7 CFR 210.16(a)(3), and 7 CFR 250.54(c).


    SFA performance monitoring of the FSMC should encompass determining whether the food service operation is in conformance with the SFA-FSMC agreement to operate the Program in accordance with Program regulations. Contract language should also confirm the SFA's responsibility to implement internal controls as required under 7 CFR 210.8(a) and to ensure resolution of Program review and audit findings. Monitoring also includes:

    • Ensuring all contract provisions are being fulfilled, such as local health and sanitation requirements.
    • Keeping records for menus, standardized recipes, production records, reimbursable meals served for all Programs operated, non-program revenues and expenses, and paid lunch equity calculations, if included.
    • Invoicing has all required supporting documentation submitted to the SFA.
    • Ensuring monthly invoice contains applicable USDA Food Credits.
    • Monthly monitoring of USDA Foods allocated and received to ensure USDA foods are being maximized in daily menus and on track for a utilized goal and credit to the district of 100% by the end of the contract year.
    • Monitoring functions may vary depending on the SFA-FSMC contract requirements.

  • Professional Standards and SFA Required Staffing
    The SFA must have a SFA appointed Food Service Director, even if they contract their food service and/or operations, the SFA must have a staff member employed directly by the SFA that is deemed the SFA Food Service Director. This SFA Food Service Director must complete the USDA annual training requirements for a Director and must ensure that training requirements are completed and tracked for all other food service staff, including contracted staff. For more information on the required training hours and topics visit the USDA Professional Standards Guidance​PDF Document.

    The SFA must have a sufficient number of knowledgeable staff to:
    • Develop, conduct and evaluate the competitive procurement process.
    • Negotiate with the contract representatives.
    • Conduct performance management of the contract through on-site monitoring of the contracted requirements.
    • Use and ensure crediting of USDA Foods to the nonprofit food service account.
    • Coordinate with the contractor on behalf of the SFA in all aspects of Program and local education agency (LEA) operations, review Claims for Reimbursement.
    • Control the food service operations.
    • Perform the responsibilities that must be retained by the SFA.

  • Free and Reduced-Price Meal Process
    The SFA must maintain responsibility for the implementation of free and reduced-price policy in accordance with 7 CFR 245. Such responsibilities include conducting hearings related to such determinations and verification of applications for free and reduced-price meals. An employee of the contractor may act as an agent for the SFA/LEA and perform, on behalf of the SFA, various aspects of the application, certification, and verification process of eligibility for school meal programs, if a provision for this service is included in the scope of the original solicitation. The company’s employee must comply with all requirements for these processes, including limited disclosure of individual eligibility information. However, the SFA is ultimately responsible for ensuring that all requirements are met and that the household eligibility determinations are accurate. The information related to household eligibility remains the property of the SFA and cannot be used by the contractor for any reasons other than determination of eligibility.

  • USDA Foods
    The SFA must retain title to all USDA Foods and ensure that all USDA Foods received by the SFA are made available to the contractor, including processed USDA Foods and that the value of the USDA Foods in processed end products accrue only to the benefit of the SFA's nonprofit school food service and are fully utilized therein. This provision also applies to any refunds, rebates, discounts, and credits received from processors. The SFA must ensure that the contractor has credited it for the value of all USDA Foods received for use in the meal service in the school year. The SFA must ensure compliance with 7 CFR 250.50 – 250.54.
  • Health Certification
    The SFA must ensure the contractor maintains applicable health certification(s) and assures that all State and local regulations are being met by a contractor in preparing or serving meals at an SFA facility.

  • Establishment of an Advisory Board
    The SFA must establish and maintain an advisory board composed of parents, teachers, and students to assist in menu planning.

Resources

 Three Step Solicitation Submission Process

​School Food Authorities (SFAs) are required to adhere to a three-step submission and review process to ensure compliance with all federal and state regulations and statutes when soliciting a FSMC and/or Vended Meals Contract. All documents must be accompanied by the appropriate submission form as follows.

Depending on a variety of factors, SFAs should allow for ample time to research and determine what they want their meal programs to look like, draft their solicitation documents, complete Step 1 below, conduct their solicitation process, and then complete Steps 2 and 3 below. 

Required forms, other template forms, and helpful procurement resources are available on this webpage. SFAs can also reach out to our procurement staff at nutritionprocurement@isbe.ne​t or (800) 545-7892.

Step 1

  • Complete and submit the following documents to ISBE Nutrition procurement staff.
    • ​​Step 1 Submission FormWord Document​​​
    • ​All solicitation documents (solicitation main document and all exhibits)
  • ISBE procurement staff will provide written notification to the SFA authorizing the SFA to begin the solicitation process.
  • Allow a minimum of 30 calendar days for ISBE to review.

Step 2

Step 3

 Food Service Management Company Contract Prototypes

All solicitation for contract prototypes is for use by a school food authority (SFA) initiating a new contract with an FSMC to provide meal services for the Child Nutrition Programs. The document, provided by the Illinois State Board of Education Nutrition Department, will assist the SFA in obtaining competitive bids/proposals and awarding the contract to the lowest, responsible, and responsive contractor.

There are two procurement methods available: The Invitation for Bid and Contract (IFB) and the Request for Proposal (RFP). When an SFA is contracting for their food service there are a lot of factors to consider when determining what is the best procurement method for your SFA. The SFA needs to determine their needs, goals, and priorities prior to determine which procurement method best suits the situation. Please review the RFP Vs. IFB Comparison ChartPDF Document for more information. 

If an SFA wants to utilize the RFP method, Illinois Public Act 102-1101 states that an RFP procurement method can only be used IF a good faith effort is made on behalf of the school district to give preference to ALL five of the items listed in the bill. It is up to the SFA to define these five items and include scorable parameters that are not simply yes or no as the RFP process is more than just a simple ranking tool to determine a preferred provider.

Whether you choose to utilize the IFB or the RFP procurement method, your final contract will only be as good as your solicitation was written, the requirements of your final contract, and how well the contract is managed by the SFA.

SFAs have a fundamental responsibility to be effective stewards of the taxpayers' money. The nonprofit school food service account must be used for expenses that are necessary and reasonable for child nutrition program operations and improvements. This includes, but is not limited to, food, equipment, supplies, and program personnel. School Nutrition Programs (SNP) funds must not be used for expenditures that are not directly related to the SNP operation and improvement. All expenditures must be reasonable, allowable, allocable, adequately documented, and justifiable. ISBE procurement staff are always available as a resource, and the SFA should work closely with their legal staff to ensure all requirements of the procurement process, award, and management of the contract are in compliance and fiscally responsible. Continuous management of your contract is an extremely important component and requirement of contracting for food service.

FSMC Contract vs FSMC- Vended Meals Contract- Which prototype to use?

There are two Food Service Management Company (FSMC) prototypes available below. The Prototype for FSMC Contract should be used if the School Food Authority is seeking a commercial enterprise or a nonprofit organization to manage any aspect of the school food service with meals being prepared on site in the school(s) facilities. The Prototype for FSMC-Vended Meals contract should be used if the School Food Authority is seeking a commercial enterprise or a nonprofit organization to manage any aspect of the school food service but does not have school(s) kitchen facilities that allow for meals to be prepared on site and therefore requires the FSMC to be able to manage the school food service but pre-pare the meals off-site at an FSMC owned/leased facility and deliver the meals in either bulk or individually pre-packaged units.

Invitation for Bid and Contract (IFB)

Request for Proposal (RFP) 

After the FSMC Contract Award

When the SFA contracts with a Food Service Management Company (FSMC), the SFA must conduct performance management of the FSMC contract through periodic on-site monitoring of the contracted requirements, as per 7 CFR 210.8(a)(1),  7 CFR 210.16(a)(3), and 7 CFR 250.54(c). 

SFA performance monitoring of the FSMC should encompass determining whether the food service operation is in conformance with the SFA-FSMC agreement to operate the Program in accordance with Program regulations. Contract language should also confirm the SFA's responsibility to implement internal controls as required under 7 CFR 210.8(a) and to ensure resolution of Program review and audit findings. Monitoring also includes: 

  • Ensuring all contract provisions are being fulfilled, such as local health and sanitation requirements.
  • Keeping records for menus, standardized recipes, production records, reimbursable meals served for all Programs operated, non-program revenues and expenses, and paid lunch equity calculations, if included. 
  • Invoicing has all required supporting documentation submitted to the SFA.
  • Ensuring monthly invoice contains applicable USDA Food Credits. 
  • Monthly monitoring of USDA Foods allocated and received to ensure USDA foods are being maximized in daily menus and on track for a utilized goal and credit to the district of 100% by the end of the contract year.
  • Monitoring functions may vary depending on the SFA-FSMC contract requirements.​​

 Vended Meals Contract Prototype

The prototype Invitation for Bid and Contract is for use by a School Food Authority (SFA) initiating a new contract with a meal vendor to provide meal services for the Child Nutrition Programs. The document, provided by the Illinois State Board of Education Nutrition Department, will assist the SFA in obtaining competitive bids and awarding the contract to the responsible bidder whose bid is responsive and lowest in price.

The prototype provided below should be used for vended meal contracts only. In a vended meals contract, the contractor provides the meals only, which are generally pre-packaged/pre-plated meals, and does not manage any aspect of the school food service or employ any of the food service personnel. However, if the contractor’s employees are responsible for the management of the program and/or the final preparation and/or serving of the pre-packaged/pre-plated school meals, the contract becomes a food service management company contract and is no longer considered a vended meals contract. If that is the case, you need to use the Invitation for Bid and Contract Prototype for FSMC Contracts —Vended Meals (Pre-packaged/Pre-plated).

If you are not sure which type of contract you have or you are considering contracting for the first time, please contact the Nutrition Department’s procurement team for further information and clarification at (800) 545-7892.

To ensure continued funding and compliance with federal and state regulations and statutes regarding procurement, it is extremely important for you to download and read the instructions thoroughly prior to downloading the contract prototype.

 Informal Bidding Procedures – Vended Meals Contract

​If your contract for vended meal services will not be in excess of $250,000 annually, you may use informal bidding procedures to procure the meal services contract.

The following steps must be part of the informal bidding procedures:

These documents will be kept on file for potential audit purposes. In addition, submission of these documents to our office will be required as part of the approval process for your application for participation in the School Nutrition Programs.​​​​​

 Contract Renewal

​School Food Authorities (SFAs) must ensure food service management or vended meals contract language indicates the duration of the contract is no longer than one year. Additionally, options for yearly renewal of a contract must not exceed four additional one-year extensions. Since the decision to renew the contract is an affirmative decision made by both parties to the contract each year, either party, for any reason, may decide not to exercise the renewal option. If the contract is not renewed, the SFA must either conduct a new procurement or self-operate its food service.

The basis for renewing the contract, including price increase provisions, if any, must be stated in the contract and be based on a measurable index such as the Consumer Price Index for All Urban ConsumersPDF Document. School officials should ensure that price increases are within the terms of the contract. These documents are updated annually at the start of the new calendar year.

A copy of the executed renewal along with all applicable contract certification forms must be submitted prior to the approval of your program participation for each fiscal year. Renewals may be mailed, faxed, or emailed to:​

Mail: Nutrition Department, Procurement
Illinois State Board of Education
100 N. First St. W270
Springfield, IL 62777-0001
Email:nutritionprocurement@isbe.net ​
Fax: (217) 524-6124​​​​

 Contract Amendments

Contract amendments are not allowable without prior approval from the ISBE Nutrition Department.

Prior to amending a contract, the SFA must first contact the Nutrition Department’s procurement team to determine if the contract revisions constitute a material or substantive change to the contract.

A material change is defined as a change that, had other bidders/proposers known of the change at the time of they submitted their responses, would have caused them to bid/propose differently. 2 CFR 200.324(b)(5) identifies that when a contract modification changes the scope of a contract or increases the contract amount by more than the Simplified Acquisition Threshold (currently set at $250,000), the SFA must make available upon request for review, procurement documents such as requests for proposals or invitations for bids, and/or independent cost estimates. The State Agency (ISBE) must then determine if the amendment is approved for a one-year renewal, or if a re-solicitation is required at the end of the current contract period. State or local acquisition thresholds may be more restrictive, and that the most restrictive threshold applies.

All amendments must be documented, reviewed, and approved by the State agency (ISBE) prior to execution 2 CFR 210.16(a)(10) to ensure that the SFA has not made a material change to the contract and has incorporated all State agency required changes into the amendment. No modification or amendment to this contract shall become valid unless it is made in writing, signed by all parties, and receives prior approval by the State agency (ISBE). Regulations governing procurement in the NSLP, SBP, and SMP, require State agencies to review contracts (and supporting documentation) prior to the execution (i.e. prior to signature) of the contract to ensure that contracts containing unallowable terms and conditions and amendments that may be material in nature are removed prior to the contract being executed. Unallowable costs shall not be paid from the nonprofit food service account.

Some amendments to contracts that may be considered material and thus require a re-solicitation include:

  • Adding other SFAs, or unaffiliated schools (to include new schools to be constructed within the SFA during the contract duration and potential contract renewals) not included in the original solicitation.
  • Adding more Child Nutrition Programs not included in the original solicitation and contract.
  • Changing a fixed price/meal fee for management and/or administration, or a fixed price/meal fee tied to a standard index, such as the Consumer Price index, without a price adjustment clause.
  • Adding the requirement for the Vendor/ Food Service Management Company to cover the cost of labor, or to transition the cost of labor from the SFA to the Vendor/ Food Service Management Company without a provision in the original solicitation and contract that includes the labor transition with specifics for how this will occur.
  • Adding requirements for the Vendor/ Food Service Management Company to purchase/invest in equipment, point of service system, or remodel/renovate facilities for the SFA that were not planned, specified, or included in the original solicitation and contract.
  • Changing the value of a guaranteed return, or failure to achieve a breakeven status, or qualifying these by limits in relation to the value of the administrative/management fee(s).
    • Any guaranteed return promised by the Vendor/ Food Service Management Company must remain in the nonprofit food service account. If the contract contains such guarantees, the contract should also contain language that ensures that the Vendor/ Food Service Management Company bears responsibility for failure to meet those goals. Returns cannot be contingent upon multi-year contracts as Vendor/ Food Service Management Company contracts are for one year with the option for up to four one-year renewals. If the option for renewal is to be considered each year, the best practice is to specify in the original solicitation the SFAs expectations of the guarantee for each renewal year option, if changes in the guarantee will be allowed.

While this list is not exclusive of changes SFAs and Vendors/ Food Service Management Company’s often consider during a contract renewal option, these changes are amendments to the contract, not a contract renewal. Therefore, State agency (ISBE) and SFA staff must take great caution not to approve contract amendments when these changes should be re-solicited. Contract renewals are extensions of the original contract based on the terms and conditions of the original solicitation; contract amendments that change the scope of the contract or exceed the value of the Simplified Acquisition Threshold (valued at $250,000), are subject to approval by the State agency (ISBE) or FNS (USDA).

If you have questions regarding a contract amendment, please contact the Nutrition Department procurement team at (217) 782-2491 or (800) 545-7892 (in Illinois), or nutritionprocurement@isbe.net​.​

 Contract Rebidding

School Food Authorities have the option to re-bid the food service management or vended meal contract at any time. Neither party may make or impose material changes to an existing contract during the contract year or as part of the annual contract renewal process. If it is determined that material or substantive changes are necessary, the SFA must conduct a new procurement and re-bid the contract or may choose to self-operate its food service.

Circumstances which require an SFA to re-bid the contract include:

  • Expiration of the existing contract and renewals; and/or
  • Addition of a program, such as the After-School Supper Program.

In addition, examples of material or substantive changes which could require the SFA to re-bid the contract include:

  • The scope of the contract has substantially changed;
  • Major changes to the formula for determining meal equivalen​cy;
  • Major shift in responsibilities for SFA/FSMC staff; and/or
  • Revision to the fixed-price contract pricing structure and/or terms for price increases becomes necessary.

Finally, the SFA should re-bid the contract if the existing contractor has not fulfilled the contract to the SFA's satisfaction.

School food authorities are required to meet state and local procurement regulations that conform to federal procurement and program regulations when developing the bid solicitation and awarding the contract. Regarding the procurement process, SFAs cannot include contract provisions that restrict competition or prevent companies from bidding on the meal services.

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