Outsourcing may boost efficiency

Officials maintain that Trammell Crow will hold down management costs. If University Trustees approve the controversial Trammell Crow Co. outsourcing deal later this week, the company will help hold down campus construction costs, respond to maintenance requests faster and know exactly what has happened in any building during a given time period, Penn officials said. Facing criticism for not consulting anyone before announcing the deal and a lawsuit challenging the legality of the agreement itself, University officials yesterday explained their October 8 decision to allow an outside company to manage Penn's buildings beginning this March. But while Penn officials continued to insist that the deal won't cost the University more than it currently spends on facilities management, they have yet to release specific figures comparing costs before and after the deal. Officials opted for outside help in improving facilities management because Trammell Crow's expertise in the field exceeds anything the University could hope to achieve, Associate Vice President for Facilities Management Omar Blaik said. Changing Penn's current system from the inside would be inefficient and akin to "re-inventing the wheel," he added. For example, maintenance workers currently work out of a central office which dispatches them to calls in individual buildings. That would change under Trammell Crow, which would base employees in every campus building in order to cut response time and complete more service requests, Blaik said. Residential maintenance "is really an area where we can improve quite a bit," he said, adding that a system in which "we would be more organized close to the customer" could "dramatically" increase efficiency. Blaik, who will remain with the University after the transition, stressed that the Penn officials who negotiated the deal considered recent complaints from administrators and faculty members about the school's facilities management when setting specific standards for Trammell Crow to meet. "In construction, we want to ensure that many of the projects that they deliver for us are delivered on budget and on time," said Blaik, who was hired last March. And while this is Trammell Crow's first foray into higher education, an official at Charlotte, N.C.-based NationsBank Corp. -- the first client that hired the company to manage its facilities --Esaid the University is putting its buildings in good hands. Trammell Crow allows the company to focus on customer service rather than on maintaining its buildings and bank branches, according to Dennis Rash, a NationsBank senior vice president for real-estate services. That deal was completed in 1992. "They try to be an extension of people in the bank? and try to make the operational side of banking in a branch system not get in the way of business decisions," Rash said. He added that Trammell Crow saves NationsBank "a lot of money," but declined to specify how much. Dallas-based Trammell Crow is paying the University at least $26 million up front for the right to provide the services. Penn would then pay the company $5.25 million per year to manage the buildings. Little else is known about the financial details. Executive Vice President John Fry could not be reached to discuss the deal yesterday, nor could Budget Director Mike Masch. The outsourcing deal will be the subject of a special meeting of University Council tomorrow at 4 p.m. in Houston Hall's Bodek Lounge.

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