Hiring a Food Service Management Company (FSMC)

1. Hiring a Food Service Management Company (FSMC) Geriann Headrick, Program Specialist Child and Adult Nutrition Services – DOE December 2018

2. Terminology • Agency – Governing body which has responsibility for administration of one or more entities, and has legal authority to operate Child Nutrition Programs. • State Agency (SA) – South Dakota Department of Education – Child and Adult Nutrition Services (CANS) • Request for Proposal (RFP) – Type of solicitation document used for the formal procurement method of competitive proposals. • Food Service Management Company (FSMC) – A commercial enterprise or a nonprofit organization that enters into a contract with an Agency to manage any aspect of the Child Nutrition Programs.

3. Topics • State Agencies role in the contracting process • Items to consider • Fixed Price FSMC RFP • Timeline • Agencies completion of RFP • Evaluation of FSMC Proposals by the Agency • SA’s approval of FSMC Proposal • Requirement to monitor the FSMC Contract

4. Responsibilities • The SA administers the USDA Child Nutrition Programs in South Dakota • The Agency is responsible for Operating the Child Nutrition Programs in agreement with its annual application with the SA. • The Agency is responsible for all FSMC contractual agreements.

5. State Agencies Role • Oversight of Child Nutrition Programs • Provide technical assistance to Agencies • Required prototype Fixed Price RFP • Review and approve all FSMC contracts and supporting documents PRIOR to contract execution • Administrative Review • Procurement Review

6. How Does the Process Start? • A FSMC has approached the Agency. • The Agency has contact with another Agency that is contracting with a FSMC.

7. State Agency • USDA Guidance Manual, “Contracting with FSMCs: Guidance for SFAs https://www.fns.usda.gov/updated-guidance-contracting-food-service-management • List of FSMC’s operating in the State of SD

8. Team Decision • Analyze current food service operation • Financial Factors: • Current programs, feeding sites, participation • Food costs, labor costs, total costs • US Foods (Commodities) • Profit/loss statement • Operational Factors: • Facilities • Equipment • STAFF

9. Team Decision • Visit Agencies contracting with different FSMCs • Food Choices/Quality/Appearance • Sanitation • Staffing • Student Acceptability • Cost of Services

10. Agency Decides to Pursue FSMC Proposals

11. Procurement • Agency must use competitive procurement procedures in compliance with Federal (2 CFR 200), State and local procurement regulations. • Full and Open Competition • Agency Consults with their legal authority throughout the process.

12. Obtaining the RFP • Contact SA to request the required Fixed Price FSMC RFP • Agencies are REQUIRED to use the State RFP prototype for hiring a FSMC. • Agencies are not allowed to create their own. • RFP is updated annually to reflect current USDA policy. • Available November 1

13. Fixed Price FSMC Contract • Fixed Price FSMC contracts in SD • FSMC charges a set price per meal type • Includes operational and administrative costs • Food • Labor • Expendable equipment • FSMC’s administrative costs and profit

14. Fixed Price FSMC Contract • Ala Carte sales are converted to meal equivalents for billing purposes • RFP/Contract allows for an annual economic cost adjustment provision tied to a public standard index

15. Fixed Price FSMC Contract • One Year Contract – Effective Date: July 1 End Date: June 30 • Option for up to four annual renewals • Termination Clause for cause or convenience

16. Fixed Price FSMC Contract • Contains provisions detailing the FSMC responsibilities in managing the Food Service program in accordance with Child Nutrition Regulations, the Agency - SA agreement, and the goals the Agency hopes to achieve. • Identifies responsibilities of both the Agency and FSMC.

17. Timeline • November 1 – RFP available • December 1 – Deadline for requesting RFP prototype • Start completing the information, it takes time. • January 15 Submit completed RFP package to SA for approval • Be available to make modifications

18. Timeline • March 1 – Due date for RFP public notification. Send notification to FSMCs operating in SD. • 60 calendar day – Solicitation period after notification made public. • 10-14 days after notification a pre-proposal meeting on site.

19. Timeline • Agency establishes the due date/time for proposals to be received for the RFP. • May 15 - Deadline for SA to receive RFP/Contract/required information. • SA MUST approve the Contract before it can be signed and implemented. • July 1 – Start of the new program year and the FSMC contract.

20. Agency Completes RFP • The RFP details the Agencies current and anticipated foodservice needs: • Programs agency currently participates in • Feeding sites: • Enrollment, Grade Levels, Kitchen Types • Number of Serving Periods • Meal Times • Number of Operating days • Programs planned in the future • Material Change

21. Agency Completes RFP • Foodservice Budget • Labor Costs • Food Costs • Other Costs • Revenue • US Foods Entitlement/Actual Usage • Reimbursement Claims • Current/Anticipated Paid Student/Adult Meal Prices and Ala Carte Prices • Charge Policy

22. Agency Completes RFP • Food Service Staff • FSMC will have a Food Service Director • Food Service Staff – can be either Agency staff or FSMC staff • Agency is required to have a Contract Manager, or Food Service Director • Must meet Professional Standards requirements.

23. Agency Completes RFP • Current program • What would you like to keep or change • Are there services, menu choices, or customer surveys the Agency is requesting?

24. Agency RFP Development • Agency may request a specified guaranteed year-end balance in the non-profit foodservice account. • Replace or purchase new equipment

25. Agency Completes RFP • Proposal award criteria is specified in the RFP/Contract. • Agency assigns points to each criteria. • Price must be the highest scored criteria.

26. RFP Package Submitted to SA • Entire RFP packet, including all exhibits and attachments, must be submitted to the SA for approval PRIOR to publishing in the newspaper. • Notification must appear once and emailed to all FSMC contacts on the SA provided list.

27. Solicitation Period • 60 calendar days from public notification date until due date for proposals. • Pre-proposal on-site meeting • SFA documents and responds to questions from FSMCs throughout the solicitation period. • Share with all potential respondents.

28. Due Date for Proposals • Proposals must be received by the date and time specified in the RFP. • Proposals can be opened at that time, but no information is announced.

29. Proposal Evaluation Committee • Committee Members – Familiar with the goals of the agency and requirements of the RFP. • Experience in the following is beneficial: • School Food Service • Financial Management • Evaluating Proposals

30. Proposal Evaluation Committee • Reviews proposals on completeness • Scores each proposal independently without comparison to other proposals. • Only scoring criteria listed in the RFP can be used.

31. Proposal Evaluation Committee • Proposals failing to address all requirements of the RFP are considered unresponsive. • Proposals containing services or items not requested in the RFP are considered overly responsive.

32. Awarding the Contract • Award made to the FSMC whose proposal is the most advantageous to the Agency. • Cost has to be the primary factor. • SA approval of RFP/Contract is required BEFORE the contract can be signed/implemented.

33. Contract • July 1 – Start of the School Year (SY) and initial year of the FSMC Contract. • Agency required to monitor contract • On-site visits to ensure compliance with program regulations • Monthly review of FSMC billing • Monthly credit received for US Foods • Establishment of Advisory Board

34. Specific Challenges • Determining what public index to use and defining • Fixed Price Contract, II. General Terms and Conditions, C. Fees • List what public index is to be used and where to find it. • Bureau of Labor Statistics www.bls.gov/cpi

35. Specific Challenges

36. Specific Challenges

37. Specific Challenges • Due date for proposals versus opening of proposals. • Definition of “Other” in scoring matrix. • Unpaid Balance Policy and the FSMC.

38. Questions? This Photo by Unknown Author is licensed under CC BY-SA-NC

39. In Conclusion • Involve various people at your agency throughout the entire process. • Talk to other agencies that have gone through the process. • Use your attorney. • Start early!!! • Contact CANS office if you have questions: • 605-773-3413 • doe.schoollunch@state.sd.us • geriann.Headrick@state.sd.us or 605-773-4718 direct line

40. Resources • www.fns.usda.gov • 7 CFR Part 210.16 Food Service Management Companies • USDA memo SP 05-2011, Crediting and Use of Donated Foods in Contracts with Food Service Management Companies • Contracting with Food Service Management Companies: Guidance for School Food Authorities • CANS office • Other Agencies

41. Training Confirmation Please send an email to courtney.martin@state.sd.us Titled: Hiring a Food Service Management Company A certificate of completion will be emailed back to you.