Over a month has passed since the University officially ended its outsourcing agreement with facilities-management company Trammell Crow, and so far, officials say the transition has been a smooth one.
"I'd love to tell you that there have been dramatic swings, but there haven't been," said Design and Construction Management Managing Director Mark Wilson, who was hired back by Penn after the contract's nullification. "The only difference is that now we're not Trammell Crow employees, we're Penn employees.... It's been a very seamless, eventless transition."
"My goal for this transition was for it to be as boring as possible," Vice President for Facilities and Real Estate Services Omar Blaik said.
The state of affairs may seem boring now, but the overhaul has appeared to take place so effortlessly because the University has, in fact, been in the process of dismantling the original contract for years.
Greeted with some controversy in 1998, Penn hired the Dallas-based firm to charge the management of the school's construction endeavors, as well as services for the off-campus properties of Penn-owned realty group University City Associates.
But although many Penn administrators at the time touted the deal -- the first large-scale outsourcing of college facilities and real estate management of its kind -- as revolutionary, the deal lost its luster in less than two years, when the original ten-year contract was scaled back to a three-year agreement.
According to the Chronicle of Higher Education, University officials said that Trammell Crow profited less than expected, as the 1998 contract stipulated that the company was supposed to make money by locating efficiencies and cutting costs, which is tough in facilities with a minimum of $200 million in deferred maintenance needs.
Penn thus reassumed management of its on-campus facilities and left Trammell Crow in control of staff augmentation and real estate services, and in doing so rehired approximately 70 of the over 100 workers who became Trammell Crow employees in 1998.
In the wake of its official contract termination, Penn has hired back over 30 employees in construction project management, finishing the Trammell Crow phaseout that began two years ago.
And now, for the most part, it's business as usual.
"There has been very little change," Blaik said. "Now, at the end of the month, we're not paying Trammell Crow a check for an invoice."
With Trammell Crow essentially serving as a middleman between Penn and employees in the last legs of its term, the contract termination resulted in only minimal personnel changes.
"We have the same procedures, same general reporting structure," Wilson said.
"We retained nearly everyone, and some chose to retire.... We've reassigned projects to other people in our group," he added, explaining that employees studied up on and took over projects where the since-retired employees left off. "It took a couple days, but we got through that."
And now that Trammell Crow is out of the picture, the fate of campus construction projects lies solely in Penn's hands.
Quadrangle renovations, the Wharton School's Huntsman Hall, the Anthropology Museum's new wing and the Pottruck Health and Fitness Center -- which was completed several months ahead of schedule -- were recently finished under Trammell Crow's watchful eye.
But the Dental School's Schattner Building, which was scheduled in 1998 to be completed by October 2000, remains unfinished. Construction of the Life Sciences Building, which began even before Trammell Crow arrived on the scene, took the back burner during the company's four-year tenure and is still in limbo.
Officials, however, maintain that projects will continue as planned.
"Schedules haven't been impacted by this transition," Wilson said. "Not one project was affected in any material way."
The final step in the turnover is the limited outsourcing of real estate services by outside companies that are slated to sign on in October.
Blaik said Penn is in negotiations with three undisclosed firms -- "two are local, one is national" -- to Penn's commercial real estate, residential real estate and the West Philadelphia Neighborhood Project in conjunction with mortgage mogul Fannie Mae.
After those contracts are signed next month, there will be no tangible trace of Trammell Crow left on campus. However, the lessons learned from the outsourcing experiment gone awry will undoubtedly play a role in Penn's business decisions for years to come.
