Opinion Number

Dear Sen. Jones:

You have requested the opinion of this office on the following issue:

May a state university permit the location of a franchised restaurant on its campus without a request for proposals (RFP), or may it grant the same franchise restaurant a "sole source" contract without the necessity of an RFP?

Food service contracts at state universities have been awarded in a variety of ways at various state schools. Generally such contracts have been viewed either as a contract for services which would be subject to the public bidding requirements of the Procurement Code, La. R.S. 39:1551 and following, or as a lease of space by the university to a contractor for use as a food service outlet, which could include a franchise restaurant such as you anticipate in your opinion request. Such a lease would presumably be done pursuant to the provisions of La. R.S.41:1211, et seq., or La. R.S. 17:3361. In neither case would a request for proposals be the appropriate procurement procedure.

The Procurement Code in R.S. 39:1554B makes that statute applicable to every expenditure of public funds irrespective of their source for any contract for services by state entities. Under this authority some universities seek bids from food service companies to provide student and staff meals in cafeterias, restaurants and snack bars. Compensation to the vendor is made either by the university from the proceeds of student meal plan fee assessments, or directly by the student to the vendor. Some of these arrangements allow the food service contractor to bring in vendors which are generally regarded as franchise restaurants or fast food outlets as part of an overall food service system.

Some universities have chosen instead to seek bids for the lease of cafeteria facilities or student union space by contractors who will then operate food service outlets from that space. Lease specifications for such contracts may be tightly drawn to require specific types of food outlets, such as a full service cafeteria, or a national brand hamburger or chicken fast food outlet. Specifications may call for a "food court" type operation where several independent entities operate around common seating and service areas. LSU recently completed such a lease solicitation under R.S. 17:3361 with a carefully drawn Request for Proposals (RFP) for operation of all food service outlets on the Baton Rouge campus. There is no provision in the law for a "sole source" award of such a lease.

In several other recent instances university food service procurements have resulted in protests from vendors and litigation which has caused unfortunate complications and delays in food service delivery to students and staff. Therefore, use of either approach outlined above requires a thorough review of the options which will best meet the needs of students and staff and careful planning for the implementation of such a program. A fair, competitive process for arriving at a food service contract should help avoid such protests.

I trust this answers your inquiry. Please let me know if we may be of further assistance to you in this matter.

Very truly yours,

RICHARD P. IEYOUB ATTORNEY GENERAL

By: ___________________________ GLENN R. DUCOTE Assistant Attorney General

RPI/GRD/cla

Date Received: Date Released:

Glenn R. Ducote Assistant Attorney General