Oregon Administrative Rules › Chapter 581 - OREGON DEPARTMENT OF EDUCATION › Division 51 - SCHOOL FOOD AND NUTRITION SERVICES › Section 581-051-0580 - Contract Terms Required

Current through Register Vol. 63, No. 7, July 1, 2024
(1)
			 Financial terms and payment provisions must be objective and unambiguous, such
			 that two different parties are able to independently calculate the cost or
			 payment and obtain identical results. Administrative and management fees must
			 be itemized in detail to accurately describe the actual costs incurred by the
			 FSMC for which the Sponsor will make payment.
(2) All revenue and expenses must accure to
			 the non-profit school food service account, never the District or the
			 FSMC.
(3) Where a contract provides
			 for special functions outside the nonprofit school food service, the contract
			 must delineate the cost allocation for those special functions in such a manner
			 as to demonstrate that labor costs will not be double billed for program meals
			 and special function meals.
(4) The
			 contract shall provide a fiscal guarantee to the District.
(5) Where the contract permits a la carte
			 food sales and the conversion of a la carte sales into equivalent pattern
			 meals, the calculation to make that conversion is to be the current NSLP free
			 reimbursement rate plus the commodity value rate.
(6) No change in charges payable to the FSMC
			 from the Sponsor shall be permitted upon contract renewal unless the contract
			 in place contains specific terms permitting such change.
(7) Annual increases in charges payable to
			 the FSMC from the Sponsor upon contract renewal shall be limited to such
			 reasonable predictions of anticipated increased costs as are defined in the
			 original Contract.
(8) Contracts
			 shall be based on a one-month accounting period, consistent with Department and
			 Sponsor accounting practices.
(9)
			 The following terms are prohibited and may not be included in any contract for
			 the management of food service operations in Oregon schools:
(a) A "cost plus" fee structure in which the
			 Sponsor pays to the FSMC cost plus a percentage of cost or income;
(b) Duplicate fee structures that permit a
			 FSMC to bill management fees and charge the same costs as cost-reimbursable
			 expenses;
(c) Purchasing clauses,
			 where the Sponsor makes purchases that limit the selection of vendors to only
			 those approved by the FSMC;
(d)
			 Acceleration clauses that require full payment of multi-year equipment
			 purchases if the contract is not renewed;
(e) Interest may not be charged for past due
			 invoices, equipment purchases, or any other reason to the extent that federal
			 program funds are used in payment;
(f) Contingent return provisions that make
			 the financial guarantee of the contract contingent upon contract renewal or
			 multi-year performance of the contract;
(g) Automatic renewal of the contract, or any
			 other process for renewal inconsistent with OAR 581-051-0550 or any provision
			 acting as penalty for non-renewal;
(h) Subcontracting of food service management
			 operations;
(i) Loans from the FSMC
			 to the District, whether in the form of direct lending, advances of payments,
			 or deferral of invoices due; and
(j) Restrictions on the ability of the
			 Sponsor to rehire non-management FSMC food service employees in the event that
			 the contract is not renewed.