Agenda Item No. V. B. 6.

Washburn University Board of Regents

SUBJECT: Outsource Dining Services


For two decades Washburn University has operated its own dining services program as a department of the University. As Washburn has grown the needs of the population have changed dramatically to a point where we feel institutional operation is no longer an efficient service model. Five of the State of Kansas four-year institutions partner with contractors for operation of their dining services.

There are three significant factors which lead to outsource dining services. The first is the inability to attract and retain good directors. This can be caused by geographic location, lack of advancement opportunities in the institution/market, or simply financial incentives. Since the major remodel and addition to dining services six years ago, Washburn has gone through three directors of dining services and two interim directors. Dining services contractors have similar issues, but they have a large international pool of candidates to draw from.

The second significant factor which typically leads to outsourcing is the lack of purchasing power. Dining services contractors have staffs devoted to developing supplier contracts and often leverage nationwide procurement deals to benefit every client. In the more isolated markets with local produce and meat producers this may not be as beneficial as it is in denser populations, but it is still significant.

The third significant factor leading to outsourcing is the inability to maintain a qualified labor pool. As we demand a greater variety of services we find ourselves struggling to manage a divergent workforce without the benefit of specialized training or the ability to efficiently schedule staff. This is another area where the institutional model has not functioned well. Dining services is an event-driven operation with labor needs changing week to week.


On February 28, 2006 we mailed a request for proposals to twelve (12) regional, national, and international dining services contractors. A mandatory pre-proposal conference occurred on March 17, 2006 at which five (5) contractors attended and expressed interest in submitting proposals to partner with Washburn University.

ARAMARK, Philadelphia PA

Chartwells (a Compass Group), Charlotte NC

Great Western Dining Service, Tipton MO

Sodexho USA Campus Services, Gaithersburg MD

The Swanson Corporation, Omaha NB

The proposals were opened April 11, 2006 and there were three (3) proposals received: Aramark, Chartwells, and Sodexho. These are the three largest dining services providers in the business.

The proposals were evaluated by representatives from the Washburn Student Government Association (Josh Shald and Molly Shea), Administration (Wanda Hill and Harold Holden), Student Life (Denise Ottinger), the president's office (Rugena Hall), Dining Services (Janel Rutherford), Business Services (Duke Divine), and Purchasing (Mel Ragar). References were called, some site visits conducted, and all three companies returned to campus for presentations on May 3, 2006. The committee evaluated each vendor on commission rates, proposal response, industry experience, proposed program, staffing, and their plans for Union Market, convenience stores, catering, training table, and concessions.


The requested proposals were for a profit and loss contract. In a profit and loss contract, Washburn specifies exactly what the contractor must deliver and maintains some control over product pricing. In this type of contract, the contractor will pay the institution a commission for the privilege of operating the dining services program. The commission is proposed as a percentage of revenue. The institution defines the products, services, and types of meal plans the contractor must provide. The contractor in this situation can increase revenues for both the contractor and the institution by providing a service our customers desire (growing the business). All of the contractors have proposed programs we feel will increase services, satisfaction, and revenue.

The financial implications of contracting dining services have three distinct components: a return to the Dining Services operation (i.e., memorial union operations); the elimination of the employee fringe benefit reimbursement from the university; and the prices charged to the end user.

For the past two fiscal years, Dining Services has posted loses of $(54,311) for FY 05 and $(44,828) for FY 04 which includes the fringe benefit reimbursement from the university of $145,554 and $138,570, respectively. For FY 06, the commission rates proposed by Chartwells will net the Dining Services operation $19,527 after paying operating expenses which will remain the university's responsibility (utilities, equipment and building repairs, and waste disposal), while maintaining competitive pricing to the end users. The net support for the Dining Services operation (i.e., memorial union operations) will increase annually as sales volumes increase.


President Farley recommends the Board of Regents authorize the administration to enter into a dining services management contract with Chartwells Campus Dining for an initial term of three-years with a possibility of five additional annual renewals.

____________________ ______________________

Date Jerry Farley, President

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