New Food Service Contracting Option Available to Schools

by Maureen A. Lemon

Historically, school districts have had to bid out food service contracts thanks to State bidding laws. However, Public Act 102-1101 recently amended the Illinois School Code’s bidding statute (105 ILCS 5/10-20.21) to exempt food service contracts from being automatically awarded to the lowest responsible bidder if certain conditions are met. The result is that, beginning June 29, 2022, school districts now have greater flexibility in selecting a food service contractor and may now use a Request for Proposal (“RFP”) rather than an Invitation for Bid (“IFB”) procurement method that allows greater consideration of factors other than price.

Under the traditional bidding regime, price is usually the most significant consideration. Section 10-20.21 of the School Code allows districts to award contracts to the “lowest responsible bidder,” which is supposed to incorporate a more holistic view of the bidding vendor. But in practice, cost is the only real criterion used to identify the lowest responsible bidder. This notion became especially entrenched when the Illinois State Board of Education (“ISBE”) developed a fixed IFB bid document that focused primarily on price and required that it be used by all Illinois school districts in selecting a food service vendor. With an IFB, factors such as technology, quality, service, and ability to meet a school district’s needs have been scored on a pass/fail basis.

Beginning with the 2022-23 school year, contracts for goods, services, or management in the operation of a school’s food service are exempted from this requirement, including in schools that participate in any of the United States Department of Agriculture’s child nutrition programs. While school districts may continue to use an IFB procurement method, they may opt instead to use the RFP procurement method. This means that school districts may now develop its own RFP with a weighted criteria scale to be used in selecting a new food service contractor. School districts must still follow all rules and regulations pertaining to procurement requirements, as well as any local or State procurement policies that are more restrictive than the federal requirements.

Under the new law, school districts must establish and communicate to all bidders the factors that will be weighted and the scoring criteria that will be used in the selection process. Pricing must remain a primary factor in the scoring matrix and other factors deemed relevant by the school district may each be assigned a percentage of the selection criteria (i.e., 5%, 10%, 20%). According to ISBE, if the RFP has only two weighted criteria, pricing must be weighted at 51% or greater; and if the RFP has three or more weighted criteria, pricing must be weighted at 35% or greater. The vendor with the highest score will be awarded the new contract. Each school district will be required to submit its RFP with the criteria and scale used to ISBE prior to bidding and to submit documentation of its results to ISBE after a vendor has been selected.

While school districts must still follow a free and open procurement process, they may use the RFP method if they make a good faith effort to give preference to contracts that: (1) procure food that promotes the health and well-being of students, including contracts that promote the production of scratch made, minimally processed foods; (2) give a preference to State or regional suppliers that source local food products; (3) give a preference to food suppliers that utilize producers that adopt hormone and pest management practices recommended by the United States Department of Agriculture; (4) give a preference to food suppliers that value animal welfare; and (5) contracts that increase opportunities for businesses owned and operated by minorities, women, or persons with disabilities.

School districts should consider incorporating taste testing as part of their evaluation criteria and involving students in that process. According to ISBE, the taste testing procedure and detailed taste testing menu plan must be established in the RFP to allow all bidders an equal opportunity to compete.

Each food contractor submitting a bid shall, to the best of its ability, submit certain food supplier data at the time of its bid. The required food service data includes: the name and address of each supplier, distributor, processor, and producer involved in the provision of the products that the bidder is to supply. The food contractor awarded the contract shall submit updated “food supplier data” to the school district on an annual basis during the term of the contract.

Information pertaining to the IFB procurement method may be found on ISBE’s Nutrition page. ISBE Nutrition Programs Procurement staff are developing FRP procurement method guidance and templates for use by school districts. If your district is interesting in switching from an IFP to an RFP procurement method, we recommend that you give yourself plenty of time to familiarize yourself with this new procurement method. School districts whose current food service contract expires during the 2022-23 school year may receive a one-year extension of their current contract if they justify to ISBE their need for such an extension is due to the current market, labor, and supply chain disruptions, local needs, or market industry instability.

If you have any questions regarding your obligations and options when selecting a vendor to provide food service goods, services, or management, please call your attorneys.