The Texas A&M University System has announced system-wide outsourcing that will privatize nearly a thousand landscaping, building maintenance and custodial services jobs across the state. Officials said the move will save the 16 affected A&M system campuses a combined $92 million over the 12-year life of the contract.
Chancellor John Sharp on Wednesday announced that the system has formalized letters of intent with SSC Service Solutions, a subsidiary of Compass Group North America, the same company that netted the largest outsourcing contract in system history last year, at $270 million, for providing similar services to Texas A&M University and system buildings within Brazos County. The company provides facilities support services to more than 100 educational organizations nationwide.
"We intend for the A&M System to not only be the most efficient, taxpayer-friendly system in the state, but to do it in a way that enhances our core mission of teaching and researching," Sharp said.
The letters of intent are non-binding, but they all but seal the deal, system officials said. The individual contracts should be signed in the upcoming weeks.
The outsourcing will impact the following system campuses: Texas A&M University-Commerce, Prairie View A&M University, Tarleton State University, West Texas A&M University, Texas A&M University-Kingsville, Texas A&M University-Corpus Christi, Texas A&M University at Galveston, Texas A&M International University, Texas A&M University-Texarkana, Texas A&M University-San Antonio, Texas A&M University-Central Texas, and health science locations in Dallas, Houston, Round Rock, Kingsville and Temple.
The lone stateside A&M campus not impacted by the outsourcing is the health science center in McAllen, which officials said was too small to be financially feasible.
"SSC Service Solutions is excited that we have the opportunity to provide our facilities services to the Texas A&M System campuses and their communities," company president Don Williams said in a statement released through a spokeswoman. "We want the people who will be transitioning to SSC to know that we already value their experience and commitment, and anticipate welcoming them to our family. We look forward to serving together to sustain a learning environment for the students, faculty, and staff of the Texas A&M System campuses."
The $92 million figure comes from operational savings, future cost avoidance and a $7 million minimum investment by SSC Service Solutions, said Phillip Ray, associate vice president For finance for the system.
The president of each institution will decide how to allocate the savings, Sharp said, but they have been given direction.
"There is a clear message from me and the board [of regents]," Sharp said. "We want every bit of this invested back into the classroom and research ... My vision for the system has always been you have to figure out why you're here, and you're here because of students, faculty and the researchers, and everything else is here to support that."
Sharp said the system bundled the campuses together during negotiations to get them better deals.
"They got pretty darn close to exactly the same thing A&M got," Sharp said. "If Kingsville or Texarkana was trying to get a rate like that on their own, they couldn't do it."
Approximately 920 system employees will transfer from government jobs to the private sector, Ray said. Similar to the A&M University deal, he said, all employees were guaranteed their jobs. He said employees' sick time will carry over, and holiday pay accrual rates and longevity pay will stay the same. A minor difference, Ray said, is that the latest outsourcing will increase employee pay by 5 percent, as opposed to the 4 percent employees in Brazos County received.
"The key [to the contracts] is the employee bridge and 100 percent employment," Ray said.
Affected services at three campuses, including Commerce and Tarleton, will be transitioned to Compass Group on April 1. Ray said approximately three campuses will be phased in at the beginning in each of the following months.
Unlike the $270 million Brazos County deal last year, Wednesday's announcement did not include dining services.
Ray said negotiations between Compass Group subsidiary Chartwells and Texas A&M University at Galveston are ongoing but separate from Wednesday's announced deal. Ray said more news on outsourcing dining at the Galveston campus, the only system school without privatized dining, could come as early as mid-March. Following the Galveston negotiations, a system-wide review of dining services will be conducted to ensure the regional schools get the best deals possible, he said.
Still, the system is considering privatizing more positions, including IT jobs and Easterwood Airport.
"We're trying to funnel as much money that supports that back into professors and researchers," Sharp said. "We still have a lot of things churning."
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