PSU, Aramark agree on 10-year contract

Portland State and food service provider Aramark officials have completed a new 10-year food service contract, which will cover most on-campus food that is sold to students, faculty and staff.

The 58-page document details customer service and food quality expectations PSU has for Aramark, which took over food service operations in the food court of Smith Memorial Student Union on July 1. The change in food service providers came earlier this year, when PSU opted out of a seven-year contract with former provider Sodexho, after just two years of service.

John Eckman, associate director of auxiliary services at PSU, said the biggest changes in the food service that students will notice will be the physical changes made to Smith and the new management staff.

In comparing the old Sodexho contract to the new arrangement with Aramark, Eckman said the biggest difference is the 10-year length of the term. Eckman said he was hopeful that Aramark management would be looking to stay at Portland State for the long term, working hard to contribute to its community.

“We now have a stable contract for a long period of time,” said Eckman, who was also a member of PSU’s contract negotiation team. “This allows a business like Aramark to do larger investments.”

The contract detailed $1.65 million in planned investments that Aramark will make over the next 10 years, including a new dining hall slated for construction in 2014.

Eckman said that students will benefit from lower prices on a new no-frills, no-delivery catering menu, although Aramark will retain exclusive rights to prepare food for all public events held in Smith, the university-owned and -operated hotel University Place, and the Ondine. The cost of basic beverages will also be lower, he said.

“We had some complaints about basic things like coffee and water service,” Eckman said, “and so we tried to minimize that cost.”

The worldwide corporate food service corporation Aramark is also taking over catering for on-campus events, resident-student meal plans and the restaurant in University Place.

Aramark had previously been the university’s food service provider prior to 2005, when Sodexho outbid their PSU contract.

The contract, signed on July 3 by Dee Wendler, associate vice president of finance and administration, brought two months of negotiations to an end when the university chose to return to Aramark following a two-year stint with Sodexho.

“This was a normal process,” Wendler said of the time it took to review the multiple drafts and come to an agreement with Aramark’s representatives. She also said that the work in Smith’s food court is now underway, and that students will soon be seeing new food in a more efficient space.

The contract also reveals how the two entities will profit financially while the contract is in effect.

PSU will make an 8.25-cent commission on every dollar spent in retail and catering, a quarter of a cent more than the previous arrangement with Sodexho. For the first year of operation, the university will receive a guaranteed minimum of $196,070 from operations.

Eckman explained that the university uses those funds exclusively for upkeep of equipment and facilities, which are essentially rented to Aramark.

“The university has never made a significant profit from these funds,” Eckman said. “I don’t think that money has ever been pulled to use for anything else.”

In comparison, Eckman said Aramark company officials told him that two to three cents of the customer dollar is retained as profit by the food service provider.

Aramark corporate officials refuse to speak to the media due to a company policy.

The contract can be forfeited at any time, by either party giving at least 120 days written notice to the other and many of the operational details, such as retail and catering prices, will be open to adjustment annually.

The contract also includes a price list for items that will be sold in the Smith food court, currently closed for a $450,000 Aramark-funded renovation. These prices are similar to those previously charged by Sodexho, however the final prices have not yet been agreed upon, Eckman said.

The contract also stipulates that Aramark will operate the University Place restaurant until Dec. 1.

Auxiliary Services is looking to have a local restaurant company open in the space on that date, but the process for finding that company has not yet begun, Eckman said.