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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


+  $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


+   7,000

=  20,000

Per meal bid price comprised of:

Direct operating costs

Management fee

Per meal bid price


+  $0.20

=  $2.25

Monthly payment under contract terms:

Total meals

Equivalent meals served in one-month

Monthly payment


+     $2.25

=  $45,000

USDA Nondiscrimination Statement

In accordance with federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, this institution is prohibited from discriminating on the basis of race, color, national origin, sex (including gender identity and sexual orientation), disability, age, or reprisal or retaliation for prior civil rights activity.

Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information (e.g., Braille, large print, audiotape, American Sign Language), should contact the responsible state or local agency that administers the program or USDA’s TARGET Center at (202) 720-2600 (voice and TTY) or contact USDA through the Federal Relay Service at (800) 877-8339.

To file a program discrimination complaint, a Complainant should complete a Form AD-3027, USDA Program Discrimination Complaint Form which can be obtained online at:, from any USDA office, by calling (866) 632-9992, or by writing a letter addressed to USDA. The letter must contain the complainant’s name, address, telephone number, and a written description of the alleged discriminatory action in sufficient detail to inform the Assistant Secretary for Civil Rights (ASCR) about the nature and date of an alleged civil rights violation. The completed AD-3027 form or letter must be submitted to USDA by:

  1. mail:
    U.S. Department of Agriculture
    Office of the Assistant Secretary for Civil Rights
    1400 Independence Avenue, SW
    Washington, D.C. 20250-9410; or
  2. fax:
    (833) 256-1665 or (202) 690-7442; or
  3. email:

This institution is an equal opportunity provider.

Click here for Nondiscrimination Statement translations.