invest $25.5 million in capital improvements and $1 million in pre-opening
Landscaping, custodial services and building maintenance for the university system will be administered by Compass Group subsidiary Southeast Service Corporation, or SSC. The details of those contracts are as follows:
-- A&M will pay SSC $6.8 million per year, which can be adjusted by changes in the Consumer Price Index, for landscape maintenance. The company will make $3.8 million in capital investments and purchase $2.1 million of existing A&M equipment.
-- A&M will pay SSC $18.3 million per year, which can be adjusted by changes in the CPI, for custodial services. The company will make $1.4 million in capital investments and purchase $783,000 worth of A&M equipment.
-- A&M will pay SSC $25.4 million per year, which can be adjusted by changes in the CPI, for building maintenance. The company will make $2 million in capital investments and purchase $1.1 million of university equipment.
'A coup for anybody'
The system made more money by bundling the services with one contractor and received an $11.5 million multiple contract bonus on top of the individualized up-front bonuses.
A management company insider, who requested anonymity, told The Eagle that the contract "seemed fairly standard." The person said A&M was able to get a good deal because it gave Compass Group a large client by which to showcase its abilities.
"An A&M is going to be a coup for anybody," the management expert said. "Getting a person to consider outsourcing is the hardest part. ... Having this sort of contract is really a feather in their cap, and it's going to take gross neglect to lose that."
The abundant money A&M gets out of the deal, the person said, is because the university has a large student body, an exclusivity clause is written into the contract and the school likely has a large percentage of its students who use the dining facilities.
"I think A&M is one of the last large universities to privatize when you look at the national landscape," the person said.
Chartwells' communications manager, Kristine Andrews, shared a similar sentiment.
"The contract with Texas A&M is the largest contract of its type within the industry and covers a broad spectrum of services, including dining services, janitorial, landscaping and building maintenance," wrote Andrews in an emailed statement. "It represents a significant opportunity in and of itself, as well as an opportunity to showcase our capability for other campuses."
B.J. Crain, A&M's vice president for finance, said the August transition of duties to Compass Group went "smoothly" with "no hiccups."
She said almost all of the approximately 1,600 former A&M employees retained their jobs under Compass Group management, whose corporate officials are housed in various office spaces around campus with no central hub.
Crain said Chartwells is well networked and that hungry Aggies should expect new name-brand eateries on campus. However, she declined to elaborate on which establishments were interested in setting up shop at A&M.
"They [Chartwells] have national partnerships with eateries and are seeing if they can bring some to town," Crain said. "There's also a local food establishment they're trying to get on campus."
Crain said Chartwells tries to purchase food from vendors within the Brazos Valley.
"They do have a national procurement line, but they have made some great strides in trying to continue utilizing the local vendors in food purchasing," she said.
Crain shared the sentiment that A&M's business was a good get for Compass Group.
"We're one of the largest campuses in the nation, and for any partner to come in and secure our business, that's a huge accomplishment for that company," Crain said. "I think that's why some of the financial benefits were as good as they were at Texas A&M."
The outsourcing, Crain said, will allow A&M to reinvest the majority of savings back into education.
"We have not historically been very aggressive in outsourcing on this campus," Crain said. "I guess with the recent budget limitations that we've suffered in the state, you start looking at other places to save money."
Distributed by MCT Information Services
Most Popular Stories
- NSA Defends Global Cellphone Tracking Legality
- Top Websites for U.S. Hispanics
- Networks Vie for U.S. Hispanic TV Viewers
- Ad Counts Rise in 2013 for Hispanic Magazines
- Apple Wants Samsung to Pay $22M for Patent Dispute Legal Bills
- Starbucks Gets Grinchy; No Gingerbread Lattes for Tampa Customers
- Apple Paid Its Lawyers More Than $60MM to Defeat Samsung in Court
- Jobs Report Brings Cheer As Unemployment Drops to Five-year Low
- Economic Bright Spots Not a Sure Boost for President Obama
- US Consumer Borrowing Rose $18.2B in Oct.