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Calculating Vendor Payment Under the Type II Contract

The award of bid under the Type II contract is to the lowest responsible bidder. The board of education or director of a non-public school determines bidder responsibility. The per meal fee is composed of:

  • The management fee, per meal; and
  • The direct cost of operations, consisting of food, labor and miscellaneous expenses per meal.

For example:

Management Fee

Direct Cost of Operations

Per Meal Cost

    $0.20

+  $2.05

=  $2.25*

Payment to the vendor is limited to:

  • The extent of program income.
  • Contract terms - meals and equivalent meals multiplied by the bid price.

For all examples:

Meal pattern meals served in one month

Equivalent meals served in one-month

Total meals

    13,000

+   7,000

=  20,000

Per meal bid price comprised of:

Direct operating costs

Management fee

Per meal bid price

    $2.05

+  $0.20

=  $2.25

Monthly payment under contract terms:

Total meals

Equivalent meals served in one-month

Monthly payment

      20,000

+     $2.25

=  $45,000

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