Implement

Private Institutions: Draft Requests for Proposals for Food Service Management Companies

This stage helps private institutions begin selecting a food service management company by providing sample RFP language designed to advance their values-based procurement goals.
  • Private Institution
  • FSMC-Operated
Implement: 

State Expectations for Values-Based Purchasing Implementation

The RFP should clearly state that adhering to the institution’s food purchasing guidelines, specifications, or other values-based procurement expectations is a baseline requirement for prospective bidders. In doing so, an institution can make compliance with values-based procurement expectations a central part of securing the award. In an RFP seeking a management company, a private institution should make the following expectations clear:

  • General Values-Based Procurement Expectations
  • Tracking, Data Collection, and Reporting Expectations
  • Volume Rebate Disclosure Expectations
  • Vendor Relationship Expectations
  • Existing Values-Based Practices Expectations

Note that some private institutions are required by internal policies to include additional expectations unrelated to those listed here. The model recommendations and alternatives listed below focus only on expectations related to values-based procurement and should be included alongside any other expectations an institution wishes to incorporate.

General Values-Based Procurement Expectations

A general statement of expectations summarizes what a private institution will require from the selected management company related to values-based procurement. The specifics of these expectations will be detailed in additional provisions.

Model Recommendation

The selected management company must seek to comply with [Institution’s Food Purchasing Guidelines], track and provide purchasing data and information, and utilize practices and processes to support [Institution’s] desired purchasing goals. [Institution’s Food Purchasing Guidelines] are available in [Appendix X].

Keep In Mind

These model recommendations often refer to an institution’s food purchasing guidelines, which should be incorporated into the RFP and attached in full as an appendix to the RFP.

Alternatives: Enumerate Specific Details

In addition to the model recommendation, an institution may choose to enumerate specific details about expectations. This approach will work for institutions with set purchasing thresholds or specialized expectations they want to highlight for prospective management companies. For example, specialized expectations may include leading educational trainings and cooking demonstrations, contributing to marketing or promotional materials, or serving on committees related to food operations at the institution.

Options for Enumerating Specific Details:

  • Per [Institution’s] [mandate; objective; goal], [X percent/X pounds] of Institution’s food [purchasing/products] must be [particular values-based requirements].
  • Per [Institution’s] [mandate; objective; goal], [X percent of Institution’s vendors] must engage in [particular values-based behavior].
  • Per [Institution’s] [mandate; objective; goal], [Institution] must purchase [X percent; X pounds] from producers engaging in [particular values-based behavior].
  • To support [Institution’s] [mandate; objective; goal], the management company will [offer educational events related to values-based food; provide marketing materials about values-based purchases; participate in advisory meetings about the values-based procurement program].

Real-World Examples: Institutions Stating Values-Based Procurement Expectations in RFPs

Houston First Expects Management Company to Award 25% of Subcontracts to Certified Diverse Suppliers

“Diversity Commitment
[Management Company] shall make good faith effort to award subcontractors equal to 25% of the value of Gross receipts to certified, diverse suppliers of goods and services in accordance with the Contractor Diversity Program established by HFC, which is incorporated herein by this reference. Contractor shall disclose to HFC the manner and extent it has made good faith efforts to achieve such goal and submit report on forms provided by HFC.”

  • Business
  • Contract
  • FSMC-Operated
  • Private Institution
  • Purchasing Commitment

Tracking, Data Collection, and Reporting Expectations

An institution must track progress to effectively implement and evaluate values-based procurement efforts. Management companies should be prepared to collect and provide information on product quantities, prices, source locations, and vendor characteristics in a format that aligns with institutional definitions and requirements. An institution should use the RFP to clearly articulate the tracking and data collection practices it expects from prospective management companies.

An institution should state in the RFP how it prefers purchasing to be measured, recorded, and reported. Typically, this entails tracking food by the volume purchased or total dollar amount spent. Additionally, an institution should list the other metrics it anticipates tracking, based on the standards in its food purchasing guidelines. To facilitate data analysis, an institution should require reports to be provided in a consistent and usable format.

Model Recommendation

The management company will be expected to track the products purchased from values-based vendors by spend and percentage of total spend for the tracking period. Values-based vendors are vendors that meet standards set forth in [Institution’s Food Purchasing Guidelines].

The management company will also be expected to track the following metrics: [List specific standards from the Institution’s Food Purchasing Guidelines.]

Examples of specific standards include, but are not limited to:

  • Spend and percentage of total spend from “local” vendors. [Include institution’s definition of “local”.]
  • Spend and percentage of total spend from “sustainable” vendors. [Include institution’s definition of “sustainable”.]
  • Spend and percentage of total spend from [insert producer group] vendors.
  • Spend and percentage of total spend from vendors with [insert certifications or desired production practices].

Data pertaining to metrics identified by [Institution] will be included in [insert tracking period (e.g., monthly*, bi-monthly*, quarterly*, semi-annual, annual, upon request)] reports of values-based food purchases provided by the management company to [Institution]. The management company will provide reports digitally in [insert Institution’s preferred data organization software].

*We recommend monthly, bi-monthly, or quarterly reports to facilitate the flow of information between the institution and the management company, address any fluctuations or deficiencies in purchasing more regularly, and build a record for institutional memory and future reference.

Alternatives: Tracking by Weight

Tracking products by price enables an institution to determine the amount spent on values-based products as a percentage of the food program’s overall budget. However, institutions may prefer to track food purchasing by weight (or by both weight and price) for any number of reasons. For example, some institutions may have values-based goals tied specifically to product weight. Tracking by weight may also be better for institutions that anticipate purchasing high volumes of products that are subject to significant price fluctuation.

In deciding which metrics to track, an institution should consider what tracking methods are feasible, which metrics best demonstrate progress, and how the data might be used in communications about the program. [1]

These alternatives would best serve institutions:

  • With specific values-based goals or institutional mandates tied to product weight.
  • With specific values-based goals or institutional mandates tied to both product weight and price.
  • Operating in a geography with significant price fluctuation.
  • Purchasing high volumes of products that are subject to significant price fluctuation.

Options for Tracking Purchases by Weight Alone or Both Weight and Price:

  • The management company will be expected to track the products purchased from [desired vendor(s)/product(s) as identified by Institution] by weight.
  • The management company will be expected to track the products purchased from [desired vendor(s)/product(s) as identified by Institution] by both price (spend and percentage of total spend) and weight.

Alternative: Additional Reporting Expectations

Institutions differ in their data analysis capabilities and have different audiences in mind when considering values-based purchasing data. One institution may need detailed reports that track trends and progress, while another may require simpler formats that are easy to interpret and share with various stakeholders, such as executives, staff, students, or the public.

Option for Additional Reporting:

Every [insert time period (e.g., month, other month, quarter, six months, year, time requested], the management company will also provide [insert desired report format(s) (e.g., data visualizations, graphics, charts, social media content, vendor quotes/testimonies)] summarizing purchasing progress or highlighting [selected metrics related to Institution’s values-based purchasing goals].

Volume Rebate Disclosure Expectations

Management companies often rely on volume-based discounts or rebates from large, traditional vendors. [2] Volume rebate practices are deeply embedded in management company operations, complicating efforts to address them in contracts.[3] Small- and mid-size vendors are generally unable to offer similar discounts because small-scale production does not lend itself to comparable volume discounts. This limits these vendors’ ability to become “approved” or “preferred” suppliers by management companies.[4]

Accordingly, a private institution should directly address expectations for how bidding management companies will report and handle volume rebates. An institution should require that management companies provide transparent information about the volume rebates and discounts they receive and expect them to share the rebate with the institution, where possible.

Model Recommendation

[Institution] is committed to expanding its food purchasing with vendors that align with [Institution’s Food Purchasing Guidelines]. To advance this commitment, [Institution] seeks transparency in its food purchasing, including relevant information about volume discount rebates, incentives, and credits from vendors. [Institution] seeks a management company that shares this commitment.

Alternatives: Requiring Rebate Disclosures

The model recommendation provides room for flexibility, enabling an institution to make reporting requirements more or less demanding. An institution that wants specific, detailed information about volume rebates may specify the exact metrics and reporting format it requires from bidding management companies.

Option for Requiring Exact Volume Rebate Information:

[Institution] is committed to expanding its food purchasing with vendors that align with [Institution’s Food Purchasing Guidelines]. To advance this commitment, [Institution] seeks transparency in its food purchasing, including relevant information about volume discount rebates, incentives, and credits from vendors. The management company will provide [insert time period (e.g., monthly, bi-monthly, quarterly, semi-annual, annual, upon request)] reporting on discounts, rebates, or incentives received from vendors when purchasing for [Institution].

Vendor Relationship Expectations

The RFP is also an opportunity to establish an institution’s expectation for open communication between the management company and values-based vendors. As noted throughout this Toolkit, values-based vendors are often new to selling into institutional markets and through management companies. Prospective management companies must understand the institution’s desire to increase purchasing from these vendors and the additional support that may be required.

Model Recommendation

The management company is expected to regularly communicate with vendors that meet [Institution’s Food Purchasing Guidelines] about the management company’s vendor certification process and purchasing.

For values-based vendors pursuing vendor certification, the management company is expected to provide information about the requirements to complete certification and remain in contact with these vendors throughout the process. For certified values-based vendors, the management company is expected to establish a communication schedule to discuss product needs, purchasing amounts, frequency, and pricing.

Alternative: Incorporating Standard Operating Procedures

If an institution has standard operating procedures for communication between the management company and vendors, it may reference and incorporate those procedures in the RFP.

Option Incorporating Standard Operating Procedures:

In accordance with [Institution’s Standard Operating Procedures], the management company is expected to [insert requirements from standard operating procedures].

Existing Values-Based Practices & Processes Expectations

Management companies that have already implemented values-based purchasing demonstrate both the capacity and experience needed to uphold these commitments over time. Often, purchasing from values-based vendors requires a different approach than working with traditional vendors, so a management company’s prior experience, internal structures, and dedicated support programs for values-based vendors are strong indicators of its readiness and ability to meet an institution’s food purchasing goals.

Model Recommendation

[Institution] is committed to [insert total values-based purchasing goal]. [Institution’s Food Purchasing Guidelines] detail the institution’s requirements and preferences in purchasing to achieve its goal. [Institution] seeks a management company with experience and proficiency in values-based procurement. [Institution] also seeks a management company that demonstrates a commitment to values in its company practices and policies.

Footnotes

[1] Advancing School Food Procurement: Driving Values-Based Purchasing through Competitive Solicitations, The Common Mkt 31 (Nov. 2022), https://www.thecommonmarket.org/assets/uploads/reports/Advancing-School-Food-Procurement-Driving-Values-Based-Purchasing-through-Competitive-Solicitations.pdf.

[2] Setting the Table for Success: A Toolkit for Increasing Local Food Purchasing by Institutional Food Service Management, Farm to Inst. New England, https://www.farmtoinstitution.org/food-service-toolkit#3-institutional-purchasing-101. See also Puanani Apoliona-Brown et al., Be-Trayed: How Kickbacks In The Cafeteria Industry Harm Our Communities – And What To Do About It 9, Real Food Generation (May 2020) https://www.namanet.org/reports/be-trayed-how-kickbacks-in-the-cafeteria-industry-harm-our-communities-and-what-to-do-about-it/; Claire Fitch & Rachel Santo, Instituting Change: An Overview of Institutional Food Procurement and Recommendations for Improvement 23–26. John Hopkins Ctr for a Livable Future (Feb. 2016) https://clf.jhsph.edu/sites/default/files/2019-01/Instituting-change.pdf.

[3] See Claire Fitch & Rachel Santo, Instituting Change: An Overview of Institutional Food Procurement and Recommendations for Improvement 26. John Hopkins Ctr for a Livable Future (Feb. 2016), https://clf.jhsph.edu/sites/default/files/2019-01/Instituting-change.pdf.

[4] Farm to Institution New England provides a deeper dive into volume rebates that may be useful to institutions concerned about volume rebates undermining sourcing from values-based vendors. See Setting the Table for Success: A Toolkit for Increasing Local Food Purchasing by Institutional Food Service Management, Farm to Inst. New England, https://www.farmtoinstitution.org/food-service-toolkit#3-institutional-purchasing-101.