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Aramark Discontinues, Loses Prison Food Service Contracts

by David M. Reutter

The corporate philosophy of cutting corners to enhance profits is catching up with Aramark Correctional Services, causing the company to lose prison and jail food service contracts and putting other contracts in jeopardy. Aramark has discontinued its contract with Florida’s entire prison system, while the company recently lost contracts in several other states as well as overseas.

In 2002, the Florida Department of Corrections (FDOC) was pushed into privatizing its food service at the behest of former Governor Jeb Bush, who forced many state agencies into privatization with disastrous results.

The first week after the FDOC’s privatized food service went into effect, there were improvements. The initial meal trays were well-prepared with sufficient servings. Shortly thereafter, however, Aramark moved to cash in on the contract’s lucrative provisions.

Not only did the FDOC contract provide Aramark with prisoner slave labor to perform all kitchen-related duties except supervision, it contained an incentive to cut every possible corner to increase the company’s profit margin. Aramark had no qualms about doing just that, and provided its managers with incentive bonuses for coming in under budget.

The contract’s golden egg was a provision that paid Aramark according to the FDOC’s prison population at the midnight count rather than for each meal tray that was served. Consequently, a decrease in the number of trays served would result in an increase in the company’s bottom line. Poor quality food became the norm, which led to fewer prisoners showing up to eat. In Florida prisons with Aramark food service, about 15 percent of prisoners did not attend meals.

The main tactic for making the food less palatable was to cut spices and fillers from the cooking process. The use of leftovers to plan future meals became a common practice. Further, shaking the spoon to reduce the amount of food that went onto each tray became a new technique taught to prisoners who served meals. Aramark supervisors considered the water that vegetables were cooked in or the grease from meat as part of the serving, so a serving full of water with floating vegetables was normal.

The FDOC helped boost Aramark’s profit margin by changing the menu to allow lower-grade meats and cheaper foods, such as substituting turkey for beef. Indeed, a 2007 state Inspector General’s report found that Aramark had made a $10.5 million “windfall” by serving lower-cost food and because the company was not paid based on the actual number of meals served. Although Aramark was fined almost $241,500 for contract violations in 2008 alone, that amount was dwarfed by the company’s profits.

However, due to budget cuts demanded by the state legislature as a result of the economic crisis, the FDOC was required to slash $9.25 million from its annual food budget. When the prison system’s food service contract was rebid in 2008, Aramark’s offer of $96.1 million was about $20 million over the FDOC’s scaled back budget. The company offered to reduce costs by changing the menu and employing fewer workers, which would have shifted some responsibilities to prison staff, but the FDOC objected based on security concerns.

Therefore, on September 9, 2008, Aramark announced it was withdrawing from its contract with the FDOC, invoking a 120-day termination clause. “We have been unable to achieve the type of partnership consistent with our expectations for a positive long-term relationship,” said Aramark president Tim Campbell. The company also cited rising food costs. A smaller company that contracted with the FDOC to provide meals at North Florida prisons, Trinity Food Services, also terminated its contract.

Prison kitchen operations reverted to state control in January 2009; the FDOC has contracted with U.S. Foodservices, Inc. to provide food for the prison system, which is prepared under the supervision of state employees. The result for Florida prisoners has been a slight increase in the quality of food and fuller portions. Also, the previous policy of “progressive cooking” was discontinued, so enough food is cooked in advance of each meal and prisoners no longer have to wait while more is prepared.

Taking back food operations from a private contractor is “quite unprecedented for a department of corrections,” noted Aramark spokeswoman Sarah Jarvis. In addition to Florida, Aramark has suffered recent setbacks in a number of other states and in the United Kingdom.

In October 2008, Aramark lost a contract valued at £40 million ($68.6 million) to supply canteen operations for the U.K.’s Prison Service, similar to commissaries in U.S. prisons. The contract, which includes providing hundreds of food, hygiene and other consumer items for sale to prisoners, went to two other companies, DHL Exel Supply Chain and Booker Direct. Aramark was netting an estimated $5 million a year by supplying U.K. prison canteens before it lost out when the contract was rebid.

On March 6, 2009, a Superior Court judge in Monmouth County, New Jersey set aside a contract awarded to Aramark to provide food service at the county jail. The court ordered the County Board of Freeholders to pass a resolution giving the contract to the lowest bidder, Gourmet Dining LLC. The Board, acting on the recommendation of the Sheriff’s Department, had thrown out Gourmet’s bid even though it was $155,360 per year under Aramark’s. Gourmet’s bid was $2.83 million annually compared with Aramark’s $2.99 million.

Aramark may be losing its $12 million contract to provide food to Kentucky prisoners, too. On August 26, 2009, state Rep. Brent Yonts introduced a bill (BR 114) that would prohibit the privatization of food services in state prisons. The proposed legislation was introduced following complaints about the quantity and quality of food served by Aramark, which may have contributed to a major riot at the Northpoint Training Center on August 21.

Several buildings were burned and seriously damaged during the riot, and eight guards and eight prisoners received minor injuries. In October 2007, 60 to 70 prisoners at Northpoint had staged a peaceful sit-in to protest food quality and commissary prices, and prisoners’ family members told local media sources that the recent riot had been sparked by similar complaints.

Aramark denied that food problems had contributed to the riot. Yet when an accreditation team visited Northpoint in October 2008, it cited a “common theme of complaints ... about the quality of food service and the canteen prices.” The average cost per meal in Kentucky prisons was just $.88 last year. “I don’t think the system is recognizing the problem with Aramark,” said Rep. Yont. “I’m hoping the administration will ... cancel the contract.” Aramark has provided food services for Kentucky’s prison system since 2005.

Most recently, in September 2009, the Monroe County Correctional Facility (MCCF) in Pennsylvania decided not to renew its food service contract with Aramark, instead opting to hire Canteen Correctional Services, a division of Compass Group USA, under a $622,388 three-year contract. According to MCCF Acting Warden Donna Asure, prison officials were pleased with the improved menu and larger servings under the new contractor. In regard to food service under Aramark, Asure said, “We have had several complaints” and “we tried to work things out.” Apparently the county decided that its contract with Aramark had left a bad taste in its mouth, and that it would be better served by going with a different company.

PLN has previously reported on problems with Aramark food services in prisons and jails. [See: PLN, Dec. 2006, p.10; June 2006, p.25].

Sources: Keller Citizen, Palm Beach Post, Pocono Record, Herald-Leader, Asbury Park Press, www.tampabay.com, www.zazona.com, www.caterersearch.com

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