Wednesday, December 20, 2017

The Case against Fixed Cost Contract for NJ School Food Service

Image result for nj dept of agricultureNJ Division of Food and Nutrition has announced that they are dramatically changing the way school districts contract with Food Management companies. The new method emphasizes cost over quality. For years, the NJ Business Administrators lobbied against a USDA initiative that would have imposed this type of contracting and prevailed but NJDA is now unilaterally requiring we abandon our current system. NJ Schools are leaders in quality nutrition programs. A vast majority of the state uses Food Service Management Companies and enjoy food service programs that operate at no cost. The Business Administrator community was not consulted, so the Division of Food and Nutrition could learn of our objectives for our schools and concerns about the Fixed Cost method of contracting.

The Fixed Cost contracting method has management companies being awarded contracts based on a cost per meal. The current method has management companies reimbursed for actual costs plus a fee for their service.
The concerns are:
The Loss of Flexibility
·       Any change a district requires could result in the need to seek new proposals. This is costly, time consuming, and delays implementation of projects the district wants.
For example
-        Change in lunch schedule
-        Addition of new services
-        Increasing number of cashiers, etc.
·       Food quality could suffer. Higher quality ingredients result in a higher cost per meal.
·       Participation in lunch program can suffer. If cost is the emphasis, and quality drops, the number of students dining in school will decline.
·       Nutrition Initiatives that encourage students to make healthy choices increase costs and may not be feasible due to the Fixed Cost.
Unintended Consequences
The Fixed Cost method rewards management companies when:
-        They work short staff
-        They use lower cost ingredients
-        They negotiate vendor rebates that they can retain
Inflation in costs such as food and labor may force the management company to compromise on quality to keep within the proposed Fixed Cost.
NJ Schools want:
·       To choose a company that best addresses the objectives of their community
·       To retain the flexibility we currently enjoy
·       Preserve our Quality Nutrition programs

Please pass the resolution to support quality nutrition programs for New Jersey students.

Thursday, June 15, 2017

How Would Changes to ESSA's Block Grant Work?

How Would Changes to ESSA's Block Grant Work?: Lawmakers are allowing states to distribute funds for the Student Support and Academic Enrichment grants competitively, instead of by formula.

Sunday, June 11, 2017

USDA - Elimination of Cost Reimbursement Contracts: A Bad Move

In response to proposed rule changes for Child Nutrition Program Integrity School Business Administrators from New Jersey are saying, "NO!"  This measure as reported by this BA with unanimous support from my colleagues is a BAD MOVE!  As stated, the move to a cost per meal contract § 210.16 Food service management companies. (Page 40 of 65) emphasizes Price over Quality.  As Quality goes down > Sales go down as students pull out, instead opting to bag it... thus Sales goes down therefore reducing Profit.  This promotes an inferior program resulting in lower food quality.

The inescapable conclusion is district's will again be forced to subsidize programs through Fund 10 General Operating Funds; thus redirecting dollars from the classroom to the cafeteria, taking resources away from delivery of instruction.

As stated in the law:
§ 210.1 General purpose and scope.
(a) Purpose of the program. Section 2 of the National School Lunch Act (42 U.S.C. 1751), states: ‘‘It is declared to be the policy of Congress, as a measure of national security, to safeguard the health and well-being of the Nation’s children and to encourage the domestic consumption of nutritious agricultural commodities and other food, by assisting the States …
Yet this move is contra to this mandate as it will push more children to drop out of a program whose function is to promote "lowest price per meal" which encourages Food Service Management Companies (FSMC's) to cut corners and eliminate quality in order to make their margins.

Accordingly, these bid structure changes eliminate flexibility and input from districts as we loose the ability to handle changes to wellness policy and items we decide not to sell, new price points for menu items and variable pricing.

Likewise district's will loose their ability to ensure effective management and quality of workforce as we will have NO control over wages paid aimed at attracting and retaining highly qualified staff similar to any restaurant or commercial food service operation who looses business as lower wages mean lesser skilled workers.

At a recent presentation by NJ Department of Agriculture spokespersons in Atlantic City at the New Jersey School Business Officials conference (6/8/17):  There were more questions than answers and many problems pointed out that went unaddressed.  Chiefly, How does the new contract model deal with a la carte sales, vending sales, Lea to Lea, and promotional events?

One main benefit of the current cost reimbursable contract is the ability to tailor a program to meet the changing needs of the community.  When a SFA decides to add a breakfast program, switch to sustainable paper products, offer enhanced quality foods, utilize local vendors or incorporate Jersey Fresh produce, or increase the wages of the food service staff they are able to make those decisions and it has not impact on the FSMC agreement.  This is called management and the rights of management will in fact be lost, but the children will be the biggest losers.