New Contracts

Procurement Procedures and Timelines

for Obtaining a Food Service Management Contract

General Procurement Requirements

Federal and state requirements for competitive procurement and contract provisions must be met when a school food authority participating in School Nutrition Programs (SNPs) obtains a contract for management of its food service. Federal procurement standards allow state and local procurement procedures to be used as long as they are consistent with federal requirements. If procurement and contract requirements are not met, a school food authority may be prohibited from paying contract costs from the nonprofit school food service account.

Federal regulations require a school food authority to follow formal procurement procedures to obtain a contract that will exceed $150,000. State law requires public schools to follow formal procurement procedures for contracts that will exceed $100,000.

The Request for Proposals (RFPs) format is usually used (instead of an Invitation for Bids format) to obtain a food service management contract. The RFP format allows the school food authority to award its contract based on a combination of lowest price and how well the proposals meet non-price criteria established by the school food authority.

The documents and templates referred to below are available on the Minnesota Department of Education (MDE) website at School Nutrition Programs / Procurement and Contracts / Food Service Management Contracts (http://education.state.mn.us/MDE/SchSup/FNS/SNP/ProcCont/FoodServManag/index.html).

Procurement Steps and Timelines

1. Draft the Request for Proposals document

Timeline: January or February.

The school food authority selects one of the two versions of RFP for a food service management contract that are available on the MDE website:

RFP for a fixed meal price contract. See details below.
RFP for a cost-reimbursable contract with fixed administrative fees. See details below.

For either RFP template, also use the RFP – Attachments spreadsheet for required attachments to the RFP.

RFP for a Fixed Meal Price Contract

With an RFP for a fixed meal price contract, the proposals from companies will specify the fixed prices to be charged for each meal type. The fixed meal prices are the company’s total charges on a per-meal basis (before using any U.S. Department of Agriculture (USDA) Foods), including management costs and profit. (Since the fixed meal prices do not take into account the value of USDA Foods that may be received during the contract year, the company fully credits the school food authority for the value of USDA Foods as they are received during the contract year.)

In addition to the RFP template, use the RFP-Attachments (Excel) spreadsheet to develop the required attachments to the RFP.

RFP for a Cost-Reimbursable Contract

With an RFP for a cost-reimbursable contract, the proposals from companies will indicate the fixed management fees that the company will charge, and the maximum costs that the school food authority will have to reimburse to the company.

Monitoring of costs: For a cost-reimbursable contract, the school food authority is responsible during the contract year to monitor that the company has requested reimbursements only for actual and allowable costs, after subtracting applicable discounts, rebates, and credits received by the company. Reimbursement for costs must be limited to the lesser of (1) the maximum per-meal costs in the company’s proposal or (2) the actual reimbursable costs incurred by the company. Also the school food authority monitors the value of USDA Foods received by the company, which reduces reimbursable costs.

In addition to the RFP template, the RFP-Attachments (Excel) spreadsheet contains various documents that must be attached for a complete RFP.

Evaluation Criteria

In the RFP (either fixed meal price or cost-reimbursable), the school food authority identifies its evaluation criteria that will be used to award points for the non-price portions of each proposal. Attach the evaluation criteria to the RFP.

Sample evaluation criteria are provided in the RFP-Attachments spreadsheet. The school food authority modifies the sample criteria as needed and assigns the maximum number of points for each criterion.
• The number of points assigned to price must be higher than the number of points assigned to any other criterion. Points are usually distributed so that total maximum points are 100.

Procurement of Automated Eligibility System

If an RFP will include requesting the company to act as the school’s procurement agent for acquiring an automated eligibility system, contact the MDE-Food and Nutrition Service (FNS) for additional provisions that must be included in the RFP.

2. (Optional) Send draft RFP to MDE for review

The school food authority may send its RFP to MDE-FNS for review prior to distributing to companies. Two weeks should be allowed for response. An estimated response date may be requested.

3. Advertise and distribute the RFP

Timeline: March

The school food authority must advertise the RFP in at least one public notice in a newspaper of general circulation in the area of the school food authority. The notice must provide a general description of the scope of work, how to request a copy of the RFP, and information on the pre-proposal meeting (see number 5 below) and the deadline for proposals (see number 6 below).

• A prototype Legal Notice is attached to the RFP templates.

The school food authority also must distribute the RFP to known vendors that may be interested in submitting proposals.

• Refer to the Contact List of management companies that are known to be interested in submitting proposals for food service management contracts in Minnesota.
• A prototype Letter to Food Service Management Company is attached to the RFP templates.

4. Select evaluation committee

Timeline: March.

At least three persons should be selected for the evaluation committee. Do not select individuals who may have a conflict of interest. The evaluation committee members will attend the pre-proposal meeting and any presentations, and evaluate the non-price portions of the proposals.

5. Pre-proposal (on-site) meeting with interested companies

Timeline: March or April.

A mandatory pre-proposal meeting should be held onsite for interested companies. If the meeting is mandatory, only companies that have attended the meeting may submit proposals. The pre-proposal meeting provides an opportunity for the school food authority to answer questions and provide clarifications, and to conduct a facility tour, preferably while the food service is in operation.

It should be stated at the meeting that information provided orally from the school food authority is not official until provided in writing to all companies that have received the RFP. Inform companies that all contact with the district must be through the designated district representative. Any other contact with district personnel, administration, vendors, contractors, or board members will disqualify their proposal.

The pre-proposal meeting should not be held until interested companies have had an opportunity to review the RFP, so a couple of weeks should be allowed between distribution of the RFP and the meeting. The meeting should be held at least two weeks prior to the deadline date that needs to be set for companies’ proposals, so that companies have time to thoroughly develop their proposals and request any clarifications.

Companies may request clarifications regarding the RFP before, during or after the pre-proposal meeting. Clarifications must be provided in writing to all companies that have received the RFP, and should be provided within a week of the request. The school food authority may issue needed clarifications at any time, although it is recommended that clarifications not be issued during the last week before the proposal deadline. However if a late issue arises that must be clarified, the proposal deadline can be extended.

6. Deadline for companies to submit proposals

Timeline - April. Allow at least two weeks after pre-proposal meeting and at least one week after any final clarifications.

At the scheduled date and time specified as the deadline for proposal submission, the proposals are opened and read aloud. Proposals either conform to the requirements of the RFP and are accepted for consideration, or are rejected for being non-responsive to the RFP. All proposals become the property of the school food authority. No access to proposals can be provided to companies until the contract is awarded.

7. Evaluate proposals; award contract; draft contract

Timeline: April or May. Allow at least two weeks after proposal deadline for evaluation, award of contract and drafting contract.

The evaluation committee evaluates and ranks the non-price portions of the proposals, based on the criteria that were listed in the RFP. Maintain documentation of each person’s evaluation and the final decision. The Point Calculator and Instructions, available from the RFP – Attachments spreadsheet, should be used to record the points awarded to each proposal.

• Non-price portions of the proposals (materials, references, presentations) should be evaluated before reviewing the price proposals.
• The Point Calculator calculates the number of points to award to each proposal for price. The evaluator enters the number of points that have been awarded for each non-price criterion, and the Point Calculator then shows the total number of points awarded to each proposal.

The contract is awarded to the responsible company that has submitted a proposal that is responsive to the RFP and has received the highest number of points based on all criteria.

The standard SNP Food Service Management Contract (either fixed meal prices or cost-reimbursable) provided by MDE must be used as the primary contract document between the school food authority and company. The school food authority may attach an additional document to the contract to add or modify provisions as needed, subject to review of the additional provisions by MDE.

General requirements for food service management contracts:

• The school food authority is responsible for drafting management contract provisions.
• Financial terms must be either fixed meal prices or reimbursement of costs plus fixed management fees.
• Effective dates of the management contract must be within the school year, usually July 1 - June 30.
• The contract may be renewed for additional school years by mutual agreement of the school and the company, without a new procurement, only if the original contract provides for contract renewal and specifies the economic index that will be used to adjust prices/fees for future renewals.
• The original contract may also require that the meal equivalency factor be updated when a contract is renewed, so that the number of “meal equivalents” to be paid for is adjusted when the contract is renewed.

School board approval may be obtained based on the draft contract, pending MDE review. Or school board approval may be obtained after MDE review.

8. Send draft contract and procurement documentation to MDE for review

Timeline – by May 2014.

Send:

Draft contract (may be signed by company but not by school).
Completed Procurement Description Form including attachments.

To:

E-mail to mde.fsmc@state.mn.us.
Or fax to 651-582-8501, attention FSMC Review.
• Do not mail.

FNS will respond either that the contract meets program requirements and may be signed, or will specify changes that are required prior to signature. Allow two weeks for MDE response.

9. Send signed final contract to MDE

Timeline: May

If necessary, redraft contract provisions as directed by MDE.

Obtain signatures to final contract. E-mail or fax a signed copy to MDE as directed above.

Last revised January 2014