Michigan and Ohio have been learning the hard way about Aramark Corporation’s various shenanigans in their prisons. After a calamitous first year under contract with the private food vendor, Michigan’s Department of Corrections continues to defend the privatization experiment. Yet, this vampiric bond should serve as a blue print for how to get it all wrong. Gov. Snyder won’t let it go though, insisting the indigestion is a case of mere “hiccups.”
Chicago Public Schools have similarly experienced a reluctant education on the folly of accepting low-ball bids from the vendor. Aramark holds both the food service and janitorial contracts with CPS — the third largest school district in the nation. A newly released internal audit of the district uncovers some questionable practices during the RFP and contract-negotiating process with the multi-national company.
Now Kansas prisoners and Kentucky students are getting at taste of the signature Aramark shaft. More on those stories, and the CPS audit below.
A Darling on Wall Street
The new year is not yet two weeks old, and while Aramark stock continues to garner favorable ratings on Wall Street, the company just can’t seem to clean-up its act and stay out of the main street news.
But first, lets take a peek at those lofty stories told on-high to would be investors.
One investment publication, Seeking Alpha.com, specifically admits Aramark is servicing a substantial debt load of $5.48 billion while laboring under razor-thin profit margins — yet they continue to suggest the company is a sound investment. Oblivious to news reports of gross contractual violations, multiple ratings companies persistently green-light the private vendor as a good buy — just hours ago, RBC Capital upgraded Aramark to its coveted “top pick” status.
And Toto Too?
The Kansas Department of Corrections has been monitoring kitchen conditions in its prisons with a series of monthly inspections at 19 facilities across the state, all but one hold contracts with Aramark. In total, 338 assessments were made over a 19 month period from Jan. 2013 to July 2014. The inspections were restricted to food handling conditions only, yet the findings fit the all-too familiar pattern found in Michigan and Ohio prisons. A sampling from the KDOC report:
- Multiple infractions went uncorrected month after month.
- There were three incidents of employees licking their fingers while handling food while inspectors looked on.
- Employees were seen to pick up food from the floor and touch doorknobs with gloved hands that were also used to handle food.
- Inadequate hand washing was reported at 11 facilities.
- Equipment was left in disrepair, including the use of a knife to MacGuyver a faulty dishwasher switch for the entire 19 month period.
- Dead bugs accumulated in light fixtures for 11 months at one facility.
- Disrepair of kitchen devices, including a non-functioning soap dispenser, were found to be common place.
The Topeka Capital-Journal describes the scope of the problem:
The term “filthy” shows up in 11 inspections, “dirty” in 54 and “bugs” in 46 — though the vast majority of those instances refer to insects filling light fixtures.
From Inmates to Students
Last June, the University of Kentucky signed a 15-year, $245 million contract with Aramark for food services at various campus locations. A Lexington, KY weekly publication — ACE, recently looked into how students felt about the new vendor, and the results are similar to those found in Chicago schools. A reporter conducted an informal student survey on the UK campus and came away with these as typical remarks:
“The food tastes worse.” –Brennan, UK Sophomore
“The fact that meals here are $9.67 is kind of ridiculous considering the quality of the food.” –Kayla, UK Junior
“They ruined Ovid’s.” –Robert, UK Sophomore
After an hour and a half at the Student Center, I finish surveying a simple random sample of students. The responses range from neutral to negative. Some of the upperclassmen don’t really mind the changes, some dislike them, and some hate them. Interestingly, no one mentions an improvement.
The Aramark contract with the university was cleverly written to let the vendor off the hook with a paltry fine for poor service and food quality. Each fall, a student survey is to be conducted, by the vendor, for the purpose of evaluating satisfaction with its services — measuring five Key Performance Indicators (KPI). If the company lags on its KPI ratings, the penalty is $100,000 to be paid to a scholarship fund.
The KPI measurement for nutrition and wellness is, contrary to its name, simply a requirement for Aramark to “make available and readily accessible… complete nutrition and dietary information on all menu items.” Aramark is neglecting to do this at UK — apparently it’s easier to pony-up a hundred grand than to comply.
Aramark’s Secret Ingredients
Private sector opacity was again illustrated when Chicago Public Schools had a similar experience when WBEZ submitted a Freedom of Information Act request to find-out what was in the Aramark chicken patties, and was informed they contained “Chicken patty, Bun”, and the ingredients for the chicken nuggets were “Chicken nuggets.”
CPS just released the results of a comprehensive internal audit which contained some insights into the origins of its contract with Aramark. The report does not use the names of CPS employees, nor the companies it does business with, however piecing together the Aramark connection isn’t all that difficult. WBEZ reports that the CPS food chief, Leslie Fowler, a former Aramark executive was investigated for showing favoritism in awarding the contract to her former employer over another vendor.
From the CPS Office of the Inspector General’s annual report:
CPS has tangled with Aramark over another contract recently as well. Last fall, Mayor Rahm Emanuel told Aramark to clean-up their act in Chicago Public Schools where they also hold a $260 million janitorial contract. Citing reports of “filthy conditions, including dead rodents and bugs, and mouse droppings”, the Sun Times quotes the mayor:
“Aramark’s job is to clean the schools, so our principals and teachers can focus on their fundamental responsibility: education. They will either live up to that contract and clean up the schools or they can clean out their desks and get out.”
Meanwhile back in Michigan
Michigan Department of Corrections Director, Dan Heyns, told MLive that the Aramark contract has been problematic:
“Did we have a lot of problems, did the vendor have a lot of problems? Yeah. Did they have too many? Probably. We’re working toward … a less costly food service, which is a good thing. We saved the taxpayers over $12 million.
We look at everything and wonder how we can do this better and cheaper, and is a private vendor the way to go. I will say that doing these services in a correctional environment is a lot more difficult than in lots of other areas. … It can’t just be about the cost, it has to be about the service you’re getting and the risk.”
Aramark has paid $200,000 in fines to MDOC, with another $98,000 in penalties being quietly waived. They factor these minor financial inconveniences into to the cost of doing business — it’s a pittance though, offering little incentive to improve.