Texas Department of Agriculture
The Food Service Management
Company Contracting Process
Food and Nutrition Division
Texas Department of Agriculture
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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
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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
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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
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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
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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
 Cost Reimbursable
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RFP/Contract Process (cont.)
Fixed Meal Rate option:
 FSMC charges a fee per meal
 FSMC, at SFA’s choice, may have full
purchasing authority
 FSMC prepares and serves meals
 FSMC may control staff management
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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.
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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
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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) 839-5437 for vendor list
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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
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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 reevaluation and final approval
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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
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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
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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
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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, rebid its FSMC service or cancel the
contract
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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 year’s food service
budget
 TDA Contract Renewal Checklist
 Anti-Collusion Affidavit
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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
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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
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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
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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 bidprocess
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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
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Conclusion
If you have any questions about using a
FSMC, please call 888-TEX KIDS (888839-5437)
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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. 20250-9410 or call (800)
795-3272 or (202) 720-6382 (TTY). USDA is an equal
opportunity provider and employer.
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