Resources

Nutrition and Wellness Programs


Contract Renewal Agreements—Food Service Management Company Contracts



bullet Contract Duration and Renewals

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.

Should either party determine revisions to the contract are necessary, non-material changes are generally made when the contract is renewed. These alterations cannot result in substantive changes to the original contract.

The following changes would normally not constitute a substantive change in the contract:

  • Number of schools—new schools added;
  • Changes in enrollment—decreases and increases in student enrollment and the corresponding change expected in participation;
  • Changes in student/adult meal price—meal price changes (determined by the SFA);
  • Per meal cost increases—cost increases limited to a measurable index; and/or
  • Meal equivalency—minor adjustments to the per meal equivalency as set forth in the contract.

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 Consumers. School officials should ensure that price increases are within the terms of the contract. You must submit a copy of the executed renewal to our office along with all applicable contract certification forms prior to the approval of your program participation for each fiscal year. Renewals may be mailed to the Illinois State Board of Education, 100 North First Street W-270, Springfield, Illinois 62777, or faxed to the Nutrition and Wellness Programs Division at 217-524-6124.

bullet Contract Amendments

Prior to amending a contract, the SFA must determine if the contract revisions constitute a material or substantive change to the contract. To determine if the change is material or substantive, ask the question, “Would bidders have bid differently if the change had existed at the time of bidding?” If the answer is uncertain, contact the Nutrition and Wellness Programs Division to discuss the proposed change. If the answer is, “Yes”, a new procurement must be conducted. If the answer is, “No”, it is possible an amendment may be made to the contract.

However, it is important to keep in mind that revisions cannot be made to the existing contract without first submitting the proposed revisions (amendments) to the Nutrition and Wellness Programs Division for review and receiving notification the proposed amendments are allowable within the regulatory guidelines. In addition, all proposed amendments must be accompanied by written justification regarding the SFA’s determination that the proposed contract revisions do not constitute a material or substantive contract change.

bullet Contract Re-bidding

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 School Breakfast 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 equivalency;
  • 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.

bullet Contract Renewal Agreement Forms

These forms must be used for all contract renewals with a food service management company and may not be altered without permission from the Illinois State Board of Education Nutrition and Wellness Programs Division.

If the contract is $25,000 or more, include a signed copy of the Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion—Lower Tier Covered Transactions.

If the contract is over $100,000, include signed copies of the following certification forms (see above):

  • Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion—Lower Tier Covered Transactions
  • Certificate Regarding Lobbying—Contracts, Grants, Loans and Cooperative Agreement
  • Disclosure of Lobbying Activities (if applicable)

Renewals may be mailed to the Illinois State Board of Education, 100 North First Street W-270, Springfield, Illinois 62777, or faxed to the Nutrition and Wellness Programs Division at 217-524-6124.