Section 4: Licensed Operator Facility Agreements (LOFA)
4.0 Licensed Operator Facility Agreements (LOFA)
Permanent LOFA (Type I): A Permanent LOFA is implemented for the operation of a BEP Facility in perpetuity by a Vendor. It contains the contractual obligations and expectations between the Vendor and the BEP as well as the interactions of both with property owners. A Permanent LOFA is usually awarded as an outcome of the competitive Selection Process. However, the BEP may elect to award a Facility outside of the Selection Process, as allowed by {Rule 6A-18.0424 FAC}, if a Vendor is adversely affected by no fault of his or her own. When a newly licensed person accepts his or her first LOFA, a one year commitment is a stipulation of acceptance.
Temporary LOFA (Type II): A Temporary LOFA differs from a Permanent LOFA in two significant ways. It is not awarded through the Selection Process and it is time specific as to its duration to meet the needs of the location for stability and transition to its next permanent Vendor.
4.1 LOFA Commitment Requirement
Licensed operators who fall into any one of the following three (3) categories must sign a Type I LOFA for a minimum contract period of twelve (12) months on their next Type I facility agreement:
- Licensed operators who have never operated a facility under a Type I LOFA. Note: A licensee with a Type II LOFA who applied and was awarded a Type I in the same facility will have that time applied toward their required one year commitment.
- Operators whose most recent Type I or II LOFA was cancelled for breach or abandonment.
- Operators who have not actively held either a Type I or Type II LOFA within the five years immediately preceding the offer of the LOFA and who have successfully completed the required retraining in accordance with Policy 2.2.
4.2 Assignment of Temporary LOFAs
Vacant facilities may be operated by a licensed vendor under a Temporary Licensed Operator Facility Agreement and in some cases, by a temporary agreement with a third-party agency. After notification and consultation with the Chairman of the State Committee of Vendors, emergency placements may be made by the Division in urgent circumstances prior to conducting the procedure of choosing a licensee via the Type II LOFA Committee. Meeting the needs of the facility must be the deciding factor in this decision, including any special circumstances that apply.
The Type II LOFA Committee members will be comprised of the following: 1) a Business Consultant from a Region other than where the vacancy has occurred, 2) the BEP Administrative Consultant or his or her designee, and 3) the Committee Chairperson or his or her designee.
When applicable, all available Type II opportunities will be announced via email with a set timeframe for applicants to respond. At the conclusion of this response period, the Type II Selection Committee will meet via conference call to interview the applicants. Dependent upon the response, it may be necessary to limit the number of applicants which qualify for an interview. At the conclusion of all interviews, the Type II Selection Committee members will vote to recommend an applicant based upon their interview responses and ability of the selected vendor to meet the needs of the facility. The Type II Committee then communicates their recommendation to the BEP Operations Manager for approval.
4.3 Limits for Operators of Temporarily Closed Facilities
Licensed operators, whose contracted facility is temporarily closed, will be permitted to apply for posted business opportunities during the Selection Cycle Process, and if awarded a facility, may accept and sign a Type II LOFA one (1) time while retaining the rights to their closed Type I facility. At such time when the agency is officially notified of the reopening date of the closed contracted Type I facility, the operator shall sign a business opportunity decision form, allowing three (3) business days to indicate their choice to either return and operate it when it reopens, or relinquish their right to it and accept and sign a Type I LOFA on the facility they currently hold as a Type II.
Note: This policy does not prohibit the same operator from accepting another Type II facility offered by BEP separate and apart from the selection process.
4.4 Facility Type and Profit Expectation
Within the Business Enterprise Program, there are different types of facilities/locations. Each of these types of locations is expected to maintain a certain profit based upon the demands of the location, stocking mark-up and assistance needed in the form of employees to serve or vend the merchandise. These types and profit expectations are listed below:
Cafeteria = 12 percent
Snack Bar = 15 percent
Non Highway Vending = 25 percent
Highway Vending = 40 percent
Snack Bar: A facility engaged in selling limited lines of refreshment and prepared food items necessary for a light meal service, such as soups, salads and sandwiches. Food and refreshment items may be prepared on the premises or purchased from licensed purveyors and usually are wrapped or placed in containers at point of sale. There is an on-site manager and customers may or may not be provided with seating accommodations.
Cafeteria: A food dispensing facility capable of providing a broad variety of prepared foods and beverages (including hot meals) primarily through the use of a service line. Table or booth seating is provided.
Highway Vending: A highway/interstate rest area or welcome center that has only automated coin or currency operated machines which dispense a variety of food and refreshment items and services.
Non Highway Vending: A facility, excluding highway/interstate rest areas or welcome centers, which has a single or multiple locations and has only automated coin or currency operated machines which dispense a variety of food and refreshment items and services.
Meeting the net profit requirement contained in the LOFA is a contractual obligation. Consistent failure to meet that obligation will have negative consequences. The first of these is loss of income to the LOFA holder. Additionally, the Selection Panel uses profit data as one of the determining factors in recommending applicants for appointments. Finally, any consistent breach of contract may result in termination of that contract.
At any time, Licensees may request from the Regional Business Consultant a review of their profit percentage expectation and profit performance. In addition, the Consultant for each facility will regularly review profit performance with the Licensed Vendor. If the Licensed Vendor is not meeting the profit expectation, the Consultant will provide assistance to the Vendor to return the facility to profitability. After the Division has provided assistance and the profitability is not reached within a six month period then this can be considered a breach of the LOFA.
4.5 Working Capital and Inventory
The Division of Blind Services will provide initial working capital for each facility. The Licensed vendor, or vendor designee, must be present throughout the time the inventory is being conducted. The total amount of the assigned working capital is entered on the LOFA. By signing the LOFA, the Licensed Vendor accepts full responsibility for this amount of working capital and agrees to maintain that level of working capital until he/she leaves that facility. The Division of Blind Services has no obligation to adjust the inventory or reimburse for outdated or otherwise non-salable products after this agreement has been signed.
Working Capital: The BEP provides each Facility with an initial working capital, consisting of product value, cash and coin necessary for conducting business. Inventory is taken when a Vendor enters into a LOFA and when a Vendor exits a LOFA for any reason. Working capital is an asset of the BEP. A Vendor may elect to reduce his or her working capital obligation by paying it down or paying it in full.
Incoming Inventory: The incoming inventory acts as a verification of equipment and working capital (the value of salable product and the exact amount of cash on hand including coins and bills in vending machines). It is conducted onsite by the incoming and outgoing Vendors in the presence of the BEP Consultant. If there are any personal items noted in the Facility file, the outgoing Vendor shall remove these items prior to the start of the inventory. Small wares, decorative displays, serving utensils, knives and similar items purchased with Facility funds remain with the Facility as state property. Any personal property of the incoming Vendor must be approved and catalogued in the Facility file by the BEP Consultant. Up to two percent (2%) of the merchandise inventory may include items necessary for compliance with food safety requirements (i.e. facility specific cleaning items, gloves, etc.). Agreement must be reached by the incoming and outgoing Vendors and documented by the BEP Consultant.
Outgoing Working Capital: The outgoing Vendor shall be responsible for having the following:
- The inventory forms prepared on an Excel spreadsheet with item description and unit cost.
- Copies of invoices on site to verify unit cost.
- Having made a reasonable effort to secure prices prior to the end of the count. The outgoing Vendor shall not receive credit on products without prices.
The inventory will be extended and totaled immediately at the end of the inventory count. Both Vendors receive printed copies of the inventory and the signed Working Capital forms on site. The BEP Consultant retains the originals.
The BEP will reimburse vendors for repairs on vending machines owned by the vendor, provided the vendor is paying set-aside on the machine and that the repair is needed and cost effective. Merchandise specifically pertaining to equipment owned by and being removed by the outgoing vendor will not be counted in the exit inventory.
Inventory Value Discrepancies: When leaving a Facility, an exit inventory sometimes results in a working capital overage or shortage. If there is an overage, the Division pays the Vendor the amount owed to them, after receiving the last MBR and set aside levy. If there is a shortage, the Vendor pays the Division the amount owed to them. The LOFA {Article IV, Section (B) (6) (ii)} requires satisfaction of the Facility's working capital in this manner.
Licensed operators may not be permitted to apply for posted business opportunities, or sign either a Permanent Type I LOFA or a Temporary Type II LOFA, if they have any current outstanding debt owed to the BEP Program. This includes working capital shortage from any previous facility or any money owed to the BEP for any reason.
