U. outsources Dining Services to Bon Appetit

The plan to have the outside firm run Dining will result in some U. employees losing their jobs. University officials said last week that Penn Dining Services will be outsourced to the Menlo Park, Calif.-based Bon Appetit Management Co., effective July 1. The move to outsource Dining will terminate 20 positions -- including the managers of the dining halls -- within the department. Officials said the decision was made to increase the quality of food , not to cut costs. Officials stressed that although the 20 Dining employees will be jobless on June 10, they will be able to reapply to Bon Appetit for a position within the new management structure. Executive Vice President John Fry said he anticipates that "a good number" of those employees will procure jobs through Bon Appetit, but he declined to estimate a number. Only three dining services managers -- Managing Director of Campus Dining Peg Lacey, her executive assistant Pam Lampitt and Meal Contract Coordinator Adam Sherr -- are assured of keeping their jobs. The move is the latest major outsourcing deal that the University has entered into in the past two years. In 1997, Penn announced plans to outsource most of its facilities management operation to the Dallas-based Trammell Crow Co., a highly controversial decision that affected about 160 employees, about 120 of whom were rehired. That deal was estimated to save the University about $15 million a year in facilities management costs. The University has also recently outsourced the Faculty Club and part of its benefits administration department. Bon Appetit will provide tuition and benefits packages to all Dining employees similar to what they have received from the University, according to Associate Vice President for Campus Services Larry Moneta. "We worked with Bon Appetit's benefits plan and Bon Appetit will extend tuition [benefits] to Penn employees for 10 years," Moneta said. Officials refused to comment on the financial aspects of the deal, including how much Penn is paying Bon Appetit to take over Dining Services. Bon Appetit Chief Executive Officer Fedele Bauccio said the company has typically seen an 8 to 10 percent participation increase while managing dining services at other institutions. He attributed the statistic to improved food and customer service. "We are very good as a company at listening to students," Bauccio said. "We believe students are our customers and if students want us to go here on a menu and variety standpoint, we'll do that." He said there will be an emphasis placed on "restaurant-oriented" cooking, with fresh ingredients and more diverse menus. He also noted that Bon Appetit will try to customize the various dining halls according to student requests. Bauccio said Penn has made some progress in Dining Services over the past year but now it is time to "step up" services. "Everything we're going to do this summer is to re-institute a whole fresh food program," Bauccio said. "You won't see food sitting on the line for hours." Moneta explained that the new-and-improved food options will compliment the overall renovations to dining facilities. All four dining halls will be renovated at a cost of approximately $15 million over the next five years. The move to outsource comes after a year filled with sweeping changes made to Dining Services, beginning last spring after a lengthy review process. Bon Appetit signed on last March to serve as the University's primary caterer and to advise Penn on Dining restructuring. The company also signed a deal to operate all food service facilities in the Perelman Quadrangle, the $69 million student center located in the heart of campus scheduled to debut next year. But a year into the partnership, Fry explained that "we didn't feel the food was getting any better." He added that officials felt Bon Appetit should assume full control of Dining in order to significantly improve the quality of the food product. Moneta said the decision extends the existing partnership with Bon Appetit. He also explained that the decision did not necessitate an extensive consultation process with the University community, because "consultation was part of the process a year ago." "We always left open where we'd take the partnership," Moneta said. Fry noted that the outsourcing was not a financially motivated decision. "We cover all of this in our operating budget," he said. Moneta said the University could see a reduction in costs through the increased use of fresh ingredients and that Penn hopes to ultimately pull in more money by selling a greater number of meal contracts. Currently, the University sells approximately 6,000 meal contracts per year and under the new deal, Penn will continue to run the meal contracts internally. As changes to Dining were made over the past year, Penn decided to consolidate the dining, catering and food retail operations under a single food services administrator. Last September, the University tapped Lacey to serve as the chief dining official. Lacey will work closely with Bon Appetit liaison Lin Johnson to oversee the developing dining services, Moneta said. 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 several Silicon Valley corporate cafeterias. The University had also considered contracting with the Philadelphia-based Aramark Co. last year, when it signed its first agreement with Bon Appetit.