[Code of Federal Regulations]
[Title 7, Volume 4]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR210.16]

[Page 39-40]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER II--FOOD AND NUTRITION SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 210_NATIONAL SCHOOL LUNCH PROGRAM--Table of Contents
 
     Subpart C_Requirements for School Food Authority Participation
 
Sec.  210.16  Food service management companies.

    (a) General. Any school food authority (including a State agency 
acting in the capacity of a school food authority) may contract with a 
food service management company to manage its food service operation in 
one or more of its schools. However, no school or school food authority 
may contract with a food service management company to operate an a la 
carte food service unless the company agrees to offer free, reduced 
price and paid reimbursable lunches to all eligible children. Any school 
food authority that employs a food service management company in the 
operation of its nonprofit school food service shall:
    (1) Adhere to the procurement standards specified in Sec.  210.21 
when contracting with the food service management company;
    (2) Ensure that the food service operation is in conformance with 
the school food authority's agreement under the Program;
    (3) Monitor the food service operation through periodic on-site 
visits;
    (4) Retain control of the quality, extent, and general nature of its 
food service, and the prices to be charged the children for meals;
    (5) Retain signature authority on the State agency-school food 
authority agreement, free and reduced price policy statement and claims;
    (6) Ensure that all federally donated foods received by the school 
food authority and made available to the food service management company 
accrue only to the benefit of the school food authority's nonprofit 
school food service and are fully utilized therein;
    (7) Maintain applicable health certification and assure that all 
State and local regulations are being met by a food service management 
company preparing or serving meals at a school food authority facility; 
and
    (8) Establish an advisory board composed of parents, teachers, and 
students to assist in menu planning.
    (b) Invitation to bid. In addition to adhering to the procurement 
standards under Sec.  210.21, school food authorities contracting with 
food service management companies shall ensure that:
    (1) The invitation to bid or request for proposal contains a 21-day 
cycle menu developed in accordance with the provisions of Sec.  210.10, 
to be used as a standard for the purpose of basing bids or estimating 
average cost per meal. If a school food authority has no capability to 
prepare a cycle menu, it may, with State agency approval, request that a 
21-day cycle menu developed in accordance with the provisions of Sec.  
210.10, be developed and submitted by each food service management 
company which intends to submit a bid or proposal to the school food 
authority. The food service management company must adhere to the cycle 
for the first 21 days of meal service. Changes thereafter may be made 
with the approval of the school food authority.
    (2) Any invitation to bid or request for proposal indicate that 
nonperformance subjects the food service management company to specified 
sanctions in instances where the food service management company 
violates or breaches contract terms. The school food authority shall 
indicate these sanctions in accordance with the procurement provisions 
stated in Sec.  210.21.
    (c) Contracts. Contracts that permit all income and expenses to 
accrue to the food service management company and ``cost-plus-a-
percentage-of-cost'' and ``cost-plus-a-percentage-of-income'' contracts 
are prohibited. Contracts that provide for fixed fees such as those that 
provide for management

[[Page 40]]

fees established on a per meal basis are allowed. Contractual agreements 
with food service management companies shall include provisions which 
ensure that the requirements of this section are met. Such agreements 
shall also include the following:
    (1) The food service management company shall maintain such records 
as the school food authority will need to support its Claim for 
Reimbursement under this part, and shall, at a minimum, report claim 
information to the school food authority promptly at the end of each 
month. Such records shall be made available to the school food 
authority, upon request, and shall be retained in accordance with Sec.  
210.23(c).
    (2) The food service management company shall have State or local 
health certification for any facility outside the school in which it 
proposes to prepare meals and the food service management company shall 
maintain this health certification for the duration of the contract.
    (3) No payment is to be made for meals that are spoiled or 
unwholesome at time of delivery, do not meet detailed specifications as 
developed by the school food authority for each food component specified 
in Sec.  210.10, or do not otherwise meet the requirements of the 
contract. Specifications shall cover items such a grade, purchase units, 
style, condition, weight, ingredients, formulations, and delivery time.
    (d) Duration of contract. The contract between a school food 
authority and food service management company shall be of a duration of 
no longer than 1 year; and options for the yearly renewal of a contract 
signed after February 16, 1988, may not exceed 4 additional years. All 
contracts shall include a termination clause whereby either party may 
cancel for cause with 60-day notification.

[53 FR 29147, Aug. 2, 1988, as amended at 60 FR 31215, June 13, 1995; 65 
FR 26912, May 9, 2000]