VENDED PROGRAMS SFSP FY 05

What is a Food Service Management Company? Any organization (including commercial for profit companies, schools, or private nonprofit organizations) which provides unitized meals under a contract with a program sponsor.

Definition of Food Service Management Company Vended Sponsor A sponsor: Which contracts with any commercial enterprise, SFA or non profit organization for preparing unitized meals, with or without milk, for use in the SFSP, or for managing a sponsors food service operations in accordance with the limitations set forth in 7CFR and the Administrative Guidance for Sponsors.

Why purchase meals from a FSMC? No food preparation facility; Lack of trained personnel to prepare meals; No site or equipment available for food preparation or storage; Unable to properly store and transport meals to sites.

Vended Sponsors Must ensure that program procedures and guidelines are met. Remain legally responsible for the food service operation Adhere to contract with FSMC. (Contract is not with USDA or SA)

Vended Sponsors Should… Pay particular attention to delivery, storage, and time restrictions; Have alternate menu plans Monitor field trips closely Ensure food quality and service Maintain acceptable communications – phone and/or radio for delivery issues

FSMCs Cannot… Order meals for sponsor Maintain sponsor records Submit claims Train and monitor admin and site staff Enforce corrective action Announce availability of program meals Approve F/R applications Prepare program application

To Bid or Not to Bid??? Contact the State agency for an approved vendor list. If you are a private on profit organization and your food service contract is over $100,000, you must meet the competitive bid process requirement established by State bid law. If you are a governmental organization and your food service contract is $7,500 or more, you must meet the competitive bid process requirement established by State bid law.

Invitation to Bid and Contract 7CFR 225.6(h)(2) uA standard prototype is provided by the State agency. (FNS-688) u It contains information and forms used for submitting a bid. u Upon acceptance by both parties it may become the contract.

Five Steps of the Competitive Bid Procedure The sponsor must: - prepare an Invitation for Bid (IFB) package; - publicly advertise IFB not less than 14 days before bids are opened; - notify State agency at least 14 days before the bid opening if contract is valued over $100,000 - publicly open and post all bids which are submitted; - submit required documents to the State agency; - receive approval from State agency before accepting or contracting with the FSMC.

Documents to Submit to the State Agency Copies of the bid packet/contract; - Copies of all bids received; - A certificate of independent price determination; - A statement concerning the sponsors reason for selecting the chosen Food Service Management Company. These must be submitted and approved by State agency prior to contract acceptance and award.

IFB must include… Cycle menu approved by SA Food specs and meal quality standards Special meal requirements or dietary modifications Statement requiring compliance with SFSP regulations Nonfood items essential for meals Location of sponsor sites and estimated range of meals required

Bid Bond Required if value of contract is over $100,000 Between 5-10 % of the value of the contract Bonding company must be listed on US Dept Treasury circular 570

Bid Specifications Sponsor Responsibilities Site Information – name, address, delivery locations, times of meal service, days of operation Cycle Menu Meal Requirements Reimbursable Meals - sponsor required to pay only for eligible meals Quality Control Unitized meals Meal Range Adjustments

Ensuring Food Quality and Service Sponsor Representatives: Must provide a list of all approved sites, the number of meals to be served, and the times of meal service to the FSMC; Must inform the FSMC of cancelled or terminated sites; Must agree to pay FSMC for meals delivered in accordance with the contract; Must document problems with the vendor

Ensuring Food Quality and Service Train Site Staff to: o Count meals when they are delivered o Contact sponsor reps if changes in the number of meals ordered need to be adjusted o Note discrepancies on the delivery receipt that both site and delivery person sign; o Inspect food items delivered by FSMC; o Reject unacceptable food items; o Contact sponsor rep if there are problems with the vendor

Food Service Management Company Requirements FSMCs intending to vend to SFSP sponsors are required to: Register and be approved by the SA Have all applicable Health Dept certifications and inspections up to date and deficiencies corrected SA inspection Records must be maintained for current year + three years

FSMC Requirements (cont.) - use the contract developed by the State agency for bid process (7 CFR 225.6(h)(2)); -- ensure meals conform to the cycle menus and meal quality standards and specifications; - deliver meals to the sponsors sites at the times set forth in the contract; - be aware that changes in the number of meals ordered shall be made by the sponsor;

FSMC Requirements (cont.) refrain from subcontracting meals, with or without milk, or for the assembly of the meal; - submit invoices promptly at the end of each month as required by the sponsor; - be responsible for any excess costs the sponsor incurs by obtaining meals from another source (7 CFR (h)(2)(xiii)).

FSMC Requirements Contract Responsibility – Private contract between FSMC and the sponsor USDA/SA has no jurisdiction over contract execution

Special Account (7CFR 225.6(f)) Sponsor deposit payments received from SA in a special account Both sponsor and FSMC must authorize any check drawn from the account Ensures that FSMC receives payment for eligible meals.

Awarding the Contract Responsive and responsible bidder Use services of minority-owned businesses Should award at least 2 weeks before the program begins

Awarding the Contract SA approval – contracts > $100,000 Performance Bond – required from a surety co listed in Dept of Treasury Circular 570 if >$100,000 Bond must be no 25% of value of the contract. Must be available to sponsor within 10 days of contracts award Award conference

Administering the Contract Food Service Sites Approved Meal Levels Adjusting Meal Deliveries Planning Delivery Routes Communication Reimbursement Administrative Reviews

Sponsor Disallowances Excess meals Allowing meals to be eaten off site Failure to serve meals as a unit Claiming meals served to adults

Sponsor Disallowances Serving meals outside approved timeframes Serving meals in excess of approved levels

FSMCs Disallowances Delivering non unitized meals Delivering spoiled meals Delivering meals outside designated delivery times Delivering meals with components less than required Delivering meals with missing components Changing menus or unapproved substitutions

Default of Contract Either party may break the contract with a 30 day advance notice Sponsor may terminate due to non performance

Default of Contract Notify FSMC and surety company of specific non performance If FSMC takes no immediate CA, surety co will find another FSMC FSMC liable for difference in price

Best Sponsor – Vendor Relationships Understand and follow regulations Understand both parties responsibilities Good Communications