U. decides not to outsource Dining services

But an outside firm will consult on restructuring Dining and handle all food operations at the Perelman Quadrangle. Bringing a close to a lengthy consultation process and months of uncertainty, Penn administrators announced yesterday that they would not outsource Dining Services. Food concessions inside the Perelman Quadrangle, however, will be contracted to an outside firm. Despite the decision not to outsource, Penn will continue to restructure the Dining Services in an attempt to cut costs and improve facilities. Some employees will be laid off as a result of the restructuring, officials said. While the University will continue self-operation of Dining, it recently enlisted Bon Appetit Management Co. to serve in the dual role of operator and consultant. The Menlo Park, Calif., company will operate all food services facilities in the Perelman Quadrangle, the $69 million project designed to create a student center linking several renovated buildings on campus. Bon Appetit will also serve as the University's primary caterer and work as a consultant in restructuring Penn Dining, according to Marie Witt, director of support services for Penn's Business Services. Both the Philadelphia-based giant Aramark Corp. and the smaller Bon Appetit journeyed to campus last semester as part of a year-long study by the Cornyn Fasano consulting firm to address late-night food services, campus catering, athletic concessions and dining possibilities at Perelman Quad. Penn signed a letter of intent with Bon Appetit yesterday. The firm will earn a yet-to-be-determined percentage of annual revenue from the Perelman Quad project, Witt said. The two parties will finalize contract issues over the next few months. Executive Vice President John Fry said the firm's fees are reasonable and will be funded with savings from a more coordinated and cost-effective Penn Dining program. For the past two months, Witt said Dining has been working to limit the growth in food purchasing costs, adding that the ongoing process of restructuring will complement overall renovations to dining facilities, which are scheduled to be completed over the next five years. Associate Vice President for Campus Services Larry Moneta declined to say how much the University will save through the revamping of Dining, but noted that administrators hope to cut food costs by substituting fresh foods for pre-packaged items. Penn will consult with Bon Appetit to lower food and personnel costs, in addition to brainstorming ways to improve purchasing, staffing and other functions, Fry said. As in similar restructuring ventures, the process will involve "modest reductions" in staff, according to Fry. Although Fry declined to cite a specific number of employees that will be affected, he said the "core" staff will remain intact. And Moneta said "there is no predetermined hit list," adding that the "core staff" includes food preparers, servers, unionized labor and management. Officials will inform affected employees by the summer. With Bon Appetit's advice, the University will begin revamping Dining facilities next fall -- a project with an estimated price tag of $10 million to $15 million, according to Witt. In addition to moving toward more "exhibition-style" cooking, the University will institute employee-training programs and will modernize serving areas, dining rooms and kitchens, Witt noted. Bon Appetit has already pledged to invest at least $1 million in furnishing the Perelman Quad kitchen with state-of-the-art equipment, Fry said. And Witt said a new-and-improved dining hall will be unveiled within a year, with additional facilities renovated on an annual basis. With the overhaul of residential life to be completed by the fall, administrators will consult with Bon Appetit over the summer about developing communal dining options for each of the 12 college houses, Witt said. She added that although she has already received a slew of complaints about the Stouffer Dining Commons, it may not be the first to benefit from renovations given Stouffer Triangle's "complicated" combination of a dormitory, a dining hall and retailers. As the primary but not exclusive caterer for the University community, Bon Appetit will also help streamline on-campus catering, Witt said. Bon Appetit's "real passion for food" and commitment to student input factored into the final decision, Fry said. He described the deal as more of a partnership than an outsourcing agreement, since the Perelman Quad has not been completed. And Witt noted that Penn "never in-sourced [the Perelman Quad] to begin with." Meanwhile, the University has launched a national search for a managing director of food services who will oversee residential dining services, the Perelman Quad and on-campus catering, Witt said. Officials expect to name a director within the next few months. Dining Services Director Bill Canney -- a member of the Food Services Steering Committee that consulted with administrators throughout the decision-making process -- said he was "pleased" with the overall outcome. He noted that the committee was considering six different models. And Witt characterized the agreement as a "good business model" for the University, allowing Penn to retain control over Dining while exploiting a firm's "restaurant flare." Bon Appetit Chief Executive Officer Fidele Bauccio cited the firm's commitment to increasing the variety of vegetarian and ethnic food options on campus. "Our focus is fresh, made-from-scratch food," he said. "We are not a company with off-the-shelf programs." He added that Bon Appetit will customize service for the Penn community, eliminating the "mystery meat" mentality associated with college cafeterias across the nation. Founded in 1987, Bon Appetit's annual revenue is about $150 million. The firm currently operates food services at several institutions in California, including Stanford University and Oracle Corp.