Inside Iowa State

Feb. 24, 2006

ISU Dining keeps the job

by Anne Krapfl

ISU Dining will continue to provide food services to Iowa State, president Gregory Geoffroy announced this week. In a national bidding process, the university evaluated bids from ISU Dining and three private companies: ARAMARK, Chartwells and Sodexho.

Geoffroy concurred with the recommendation recently submitted to him by vice presidents Tom Hill (student affairs) and Warren Madden (business and finance). They, in turn, were in agreement with the recommendation from a 22-member evaluation team made up of students, faculty, staff and administrators.

Staff from ISU Purchasing facilitated the committee's meetings to respond to questions and ensure the evaluation process remained compatible with the university's public bid process.

"We received some very creative and competitive proposals, and I commend the members of the evaluation team for carefully studying all the details to make objective comparisons," Geoffroy said. "Their work was extensive and thorough; in fact, this is probably the most exhaustive review of campus dining services ever done at Iowa State University.

"I also appreciate the input committee members and I received from members of the campus community and beyond. Clearly, this is an issue a lot of people are passionate about," he said.

"I believe the decision to continue to work with ISU Dining is the right one, from both a financial standpoint and the demonstrated ability to serve our Iowa State students well and enhance the student experience at Iowa State," Geoffroy said.

ISU Dining is a $25 million operation that includes residence hall dining centers, retail cafes and convenience stores, catering, vending and the Memorial Union food court. It does not include concessions at Hilton Coliseum or Jack Trice Stadium and Hazel's Kitchen at Reiman Gardens, which have separate management contracts.

The process

ISU Purchasing received four proposals for campus food services by the Dec. 16 bid deadline. From mid-January to mid-February, the committee met two to three times a week to evaluate the written proposals and presentations by each bidding team. Committee members also made reference calls to current and former clients of the bidders.

Two five-year financial analyses were completed, one by the Duffy Wilkie Group, a San Francisco food service consultant hired by the university to assist with the bid process, and another by financial staff from the two vice presidents' offices.

In addition to the financial viability of each proposal, the committee considered quality of food and facilities, past performance/track record, service plans to meet the campus' needs in all areas of food service, and plans for a smooth transition.

"One of the things the committee observed is that many universities consider out-sourcing their food service or changing private vendors because they're unhappy with what they have," Madden said. "That hasn't been the case at Iowa State. ISU Dining consistently has received high satisfaction ratings from its various client groups."

All the proposals had to include plans to pay Iowa State $2.3 million annually to cover bond repayments for recent residence and dining building projects. Beyond that, the bidders differed in what they proposed for retail operations, student meal plans, new buildings and renovations (creating additional bond debt), commissions, administrative charges and utility increases. The committee decided the ISU Dining proposal offered the best financial contribution to Iowa State (from $3 million to $6 million more than the other three proposals over the five years used for analysis).

Iowa State began this food service study last summer at the direction of the Board of Regents, State of Iowa. Board members expressed concern about ISU Dining's accumulating operating debt at that time.

"The committee concluded, and Tom and I agreed, based on the financial analysis, general satisfaction with existing services, proposed venues among the proposals and the absence of cost savings to students if we switched, that the ISU Dining proposal is the best alternative to continue to provide food services to the Iowa State community," Madden said. "The ISU Dining staff should be commended for developing a plan that is responsive and financially better than the national firms that were considered."

What's next

The university will develop an operating memorandum of understanding with ISU Dining following discussion on several issues in the proposal. They include:

• Financing and locations for proposed food facility building and remodeling projects
• Schedule for administrative fee and vending commission payments to ISU units and student organizations
• Regular financial and program reports to ISU to ensure ISU Dining is implementing its proposal
• Process for addressing future food service needs on or off campus
• Process for selecting the next director of ISU Dining (which currently has an interim leader following Jon Lewis' resignation in September)

"ISU Dining is a much better operation for having gone through this process," Hill said. "You become better when there's competition and you have to sharpen your skills.

"And as the guy with 'student affairs' in his title, I have to note that the ISU Dining proposal offers our students the best package, not just in terms of providing a good financial package and good meals, but in terms of flexible, part-time employment, internships, scholarships and the like. They have a proven record in this area."

"The ISU Dining staff should be commended for developing a plan that is responsive and financially better than the national firms that were considered."

Warren Madden