University renews contract with dining service provider Aramark

Living Wage Campaign expresses concern about contract employee wages

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The University announced Thursday it will renew its dining contract with Aramark, the dining service provider which manages the University’s residential and retail dining centers, catering and vending services, and athletics-related concessions. The contract is set for 20 years and includes a financial incentive for the University to honor it for the full term.

The University has held contracts with Aramark for the past 25 years — with an initial 10-year contract with three five-year renewals. Pat Hogan, the University’s executive vice president and chief operating officer, said the extended partnership was an important part of the agreements made in the new contract.

“Our interest and Aramark’s interest was to have a long-term relationship,” Hogan said. “A commitment to a long-term contract is why we were able to get [other provisions] from Aramark.”

Those provisions include a commitment to invest $20 million in improvements and renovations for dining facilities and a $70 million escrow fund from which interest will be pulled to fund University initiatives.

Mark Nelson, president of Aramark’s Higher Education business, also expressed the importance of a long-term partnership in a Univeristy press release.

“Aramark is extremely proud to extend our long-standing partnership with one of the nation’s best universities,” Nelson said. “We look forward to continuing to serve the U.Va. community through innovative dining, catering, vending and concessions services.”

The contract focuses heavily on the sustainability and nutritional value of foods offered in dining halls. Aramark will be making an effort to include more local, organic and fair-trade ingredients, as well as increasing its recycling program.

“Aramark will … upgrade residential, retail and athletic dining facilities and provide more variety, featuring additional locally grown or produced products and more healthy choices, as well as a mix of national and local options,” Aramark said of the improvements in the press release.

The renewed contract also emphasized the availability of nutritional information. Aramark is required to display a full nutritional analysis of its food. Full recipes and nutritional information will also be made available online.

Customer satisfaction remains a key aspect of the contract. Aramark will remain responsible for determining levels of customer satisfaction periodically, but the University retains the right to conduct an independent customer satisfaction survey regarding the University’s Dining Program, the results of which would be provided to Aramark.

“Quality of the dining for students and staff is a top priority,” Hogan said. “Aramark is going to continue to solicit input from students and staff regarding dining offerings. We believe there’s a high level of satisfaction and we’ll continue to make improvements and improve variety.”

The contract also stipulates that Aramark will invest $70 million with the University to be held in an escrow fund through the course of the contract. If the University leaves the contract early, the amount it is ultimately paid out would decrease.

“I envision this being put in a quasi endowment,” Hogan said. “U.Va. will have control of the money, and if we did invest it, we’d do it through the University or [the University of Virginia Investment Management Company]. It would be nice to figure out how to earn 5 percent a year, which would be around $3.5 million.”

Any revenue earned from the investment of the escrow fund will be used “for strategic initiatives approved by the Board of Visitors,” according to the press release. Hogan said he hoped the money would be used to fund measures to make the University more affordable.

According to Hogan, the total value of the contract for Aramark is variable.

“A lot of that will depend on the number of students at the University, attendance at football games and sporting events and number of students that elect to use dining options as opposed to eating off-Grounds,” Hogan said.

Though Aramark provides dining services to more than 400 colleges and universities, some institutions have recently decided to move their contracts elsewhere.

In February, the College of William & Mary announced its decision to sign with Sodexo after a competitive bidding war. As part of the deal, Sodexo will be providing the College with $5 million in improvements to dining areas throughout campus including enhancements to residential and retail dining as well as catering services to the campus.

Closer to home, some in the University community have questioned Aramark’s wages for its workers. The U.Va. Living Wage Campaign aims to call attention to the fact the University does not ensure Aramark offers all of its employees a living wage.

Representatives from the campaign said contract employees offer the same work as direct employees but can be paid as little as the federal minimum wage — $7.25 an hour — and are not eligible for benefits.

Living Wage Campaign spokesperson Laura Goldblatt stated that one of the concerns about Aramark employees is cost of living.

“It would cost someone who is part of a two parent house with two kids to make at least $13 per hour plus benefits in Charlottesville,” said Living Wage CampGoldblatt. She added that since it has been some years since the study, at this point that wage may even be higher.

“Aramark base wage is the same as the University’s which I believe right now is $11.35 per hour” said Goldblatt. “Two dollars might not sounds like much but I think when you are living paycheck to paycheck an extra two dollars an hour makes a difference.”

Hogan asserts that the University and Aramark are both aware of concerns from the Living Wage Campaign, but it must be addressed through certain procedures.

“As a state agency, we cannot dictate to a contractor what they pay their employees,” Hogan said. “Aramark is well aware of sensitively around this. But as a state agency we’re not allowed to dictate wage rates.”

Goldblatt also pointed out that most food service workers are laid off over the summer because students are not around to eat. The living wage figure of $13 an hour assumes people are working full time, so in order for Aramark to have a sustainable operation they would need to pay something closer to $18 per hour for people to be able to not work over the summer, according to Goldblatt.

“The University is the largest employer in central Virginia and they have a responsibility to the population to perform essential tasks,” Goldblatt said. “People who are providing all these services are working really hard […] they are what makes the University of Virginia the University of Virginia, anyone who is providing […] should be compensated as such.”


Published August 31, 2014 in News



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