Because of the dominant role that the federal government plays in financing and regulating school food services, there is much less discretion in the way districts create an RFP and the way FSMCs operate the district’s service. In fact, the district doesn’t create an RFP so much as it just fills in the blanks of the one given to it by state government.
Elsewhere in the nation, it is fairly easy to obtain the official food service RFP or IFB documents on each state’s official Web site (usually the department of education’s site). In Michigan, the RFP and related documents are not posted on the Web. School districts interested in obtaining the documents must contact the state supervisor for grants coordination and school support at the Michigan Department of Education to acquire the official RFP and instructions for seeking bids on district food services. Once a request is made, the Michigan Department of Education will send an electronic message to the recipient with a 32-page Microsoft Word® document and a 16‑sheet Microsoft Excel® spreadsheet.[xlviii]
The state’s package of material comes with instructions and a letter of introduction for the recipient. The letter emphasizes a number of points that are worth expanding here.
First, changes to the prototype document provided by the state can be made, but they must be made in bold “and brought to the attention of potential bidders.” Second, the federal government mandates that contracts with an FSMC be no longer than one year, but with an option to renew four times for one-year only each — an RFP stipulation deemed important enough by the state to be mentioned in the opening paragraph of the state’s official cover letter. Third, emphasis is placed on four key “certification sheets” that must be submitted by the winning bidder:
The Clean Air & Water sheet is a one-page document signed by the FSMC representative that states the FSMC explicitly agrees to comply with pertinent sections of the Clean Air Act and Federal Pollution Control Act; that none of the FSMC operations will occur in buildings on the “EPA List of Violating Facilities”; that the FSMC will work hard to adhere to the clean air and water standards and to include in any subcontracts the material parts of the Clean Air Act and Water Act to which the main contractor is required to adhere.
The Independent Price sheet is designed to certify that the FSMC has not effectively colluded with a fellow competitor over the issue of prices.[xlix]
The Lobbying sheet is reasonably self-explanatory. Bidders are prohibited from lobbying the government using federal monies provided for food services (though the contractors are free to lobby using profits they may realize on a contract).
The Debarment and Suspension certification is evidence that the vendor has not been prohibited from being party to this particular deal by the federal government.
The state’s cover letter also explicitly notes that when a district is choosing a food services contractor, the price of the services must exceed 50 percent of the weight given to all variables in the district’s decision-making process. In other words, the district must choose a contractor based mostly, though not exclusively, on price.
In addition to reading the state’s materials on food services contracting, district officials interested in the subject should obtain and read sample food-service RFPs from neighboring districts. Similarly, they should also review FSMC-related questions and answers from the U.S. Department of Agriculture’s Food and Nutrition Service (see Appendix 2 for links to these). This USDA agency routinely receives questions from school food authorities nationwide and typically compiles those questions and the FNS responses and posts them on the USDA Web site. Subjects cover everything from buying “American” (a stipulation of the National School Lunch Program) to “guaranteed returns” (money an FSMC promises to return to the district from its food service revenues) to the prohibition of contracts to vendors that write the RFP specifications or other documents themselves. These explanations can help a district avoid pitfalls in the contracting process.
One item in the preceding paragraph should be respected in particular: A district should not let a vendor help write the specifications that will be used in the district’s RFP. Given the complexity of food services contracting, seeking help from a vendor may be tempting, but aside from being prohibited by the federal government,[l] this approach can lead to a badly skewed result. After all, vendors may suggest specifications that effectively thwart their competitors, rather than facilitate the beneficial competition the district seeks.
Finally, districts should also resist the temptation to replace an RFP with an “invitation for bid,” which is meant solely to solicit the lowest price. Most districts in Michigan already use RFPs, but it is worth stressing here that an RFP gives the district and its officials the opportunity to build a working relationship with a vendor over service quality. While price is important in choosing a vendor (recall that it must amount to at least 50 percent of the decision in food service contracts), price is not the only consideration. Also important are quality improvements and the ability to work with a good vendor over time.
[xlviii] The Mackinac Center has posted these documents on its Web site (see Appendix 2), but they should be reviewed for general purposes only. The documents are dated October 2006, and since the contents are subject to change, district officials preparing to contract with a food services vendor should obtain the latest version of the RFP from the Michigan Department of Education.
[xlix] As will be described below under “10 Contracting Rules of Thumb,” one Upper Peninsula school district that contracts for bus services nevertheless maintains two district buses to increase the competition between vendors. Such practices can undermine any collusion over prices among vendors.
[l] Consider the following from a stern USDA memo on the subject:
“In October 2001, we asked our Regional Offices to advise their respective State agencies that [USDA] regulations prohibit the awarding of contracts to any entity that develops or drafts specifications, requirements, statements of work, invitations for bids, requests for proposals, contract terms and conditions or other procurement documents. ... We continue to receive complaints of SFAs using a prospective bidder to draft specifications and procurement documents and feel that this potential continued noncompliance with Department regulations warrants our addressing the issue directly with the respective State agencies.”
See Garnett, “School Districts and Federal Procurement Regulations,” 1.