Last month, the Faculty Student Association [FSA] was informed by Richard Mann, Vice President for Administration, that the meal plan and contractor would be selected by the Administration, and not by the FSA's Board of Directors. This was unexpected, as the FSA was responsible for the food service and believed it had ultimate authority over all aspects of it. Students on both the FSA's Board of Directors and the Dining Services Committee were deeply offended, and some (including myself) have begun attempting legal action to stop it. Why the uproar over this little decision?

First, the Administration knows little about the meal plan, especially compared to the students on the Dining Services Committee. The Administration has neither enough direct experience with the meal plan, nor sufficient knowledge about contractors and alternative plans, to be trusted to make the best decision. Second, the Administration selected the contractors in the Student Activities Center based largely on promised "returns to campus." It is reasonable to suspect that it will choose the dining service contractor based on the contractor's proposed payment, possibly ignoring factors affecting students. Third, the Administration has ulterior motives: it wants the meal plan to pay for renovations to the dining facilities, and it has also suggested using the meal plan to raise money for non-dining purposes.
 

The FSA's Role in Dining Services

The Faculty Student Association is a non-profit corporation which was set up to allow the SUNY campus administration to run campus services without having to comply with all of the regulations of New York State. SUNY is the only state school in the country (except for the University of California) which is considered part of the state government, and therefore anything a SUNY campus wants to do is controlled by New York State's laws on ethics, disclosure, labor unions, "low bid" rules, etc. To evade these regulations, SUNY created the FSA, the Research Foundation, and other corporations. While these corporations nominally have independence from the SUNY administrators, they are in practice heavily controlled by them.

So, while the FSA's Board of Directors is composed of four students, three faculty or staff, and four administrators, the Board does not frequently conflict with the Administration. When it does, the Administration simply threatens to dissolve the FSA, as it seems to have done last year when it wanted to get the FSA's by-laws changed, or many years ago when then-President John Marburger wanted the by-laws changed. The FSA Board has gradually become more passive as Administration has gotten more aggressive, and now there are few serious disputes in the Board meetings.

Still, the Board of Directors had been planning to make its own decision on the meal plan. It had assembled a group of student volunteers and administrators into the Dining Services Committee, which was to decide the terms under which contractors would make their proposals, evaluate those proposals, and recommend the contractor to the Board, who would make the final decision (which would almost certainly be whatever the Committee recommended).

The Committee debated much in the Fall semester, and by January it was divided between two plans: a straight dollar-for-dollar declining balance which could be used anywhere on campus, or the pre-Advantage meal plan with a partial declining balance and a certain number of meals per week. At its last meeting on February 9, 1998, the Committee decided on a compromise: the plan would be a straight declining balance, but 45% of the money would have to be used in the dining halls (Roth, Kelly, H), while the other 55% could be used anywhere. Refer to the Statesman, February 12, for more details on this plan (though parts of the description there are no longer accurate).

The major problem with the new plan is its cost. Declining balance plans are generally more expensive than other plans, because the contractor does not have an implicit "rip-off" factor built in. For example, in an N-meals-per-week plan, there is the "missed meal factor," which takes advantage of the fact that students will often not eat all N meals in any given week. In an "Advantage" plan, there is a 10% surcharge on all Advantage prices, which allows the contractor to make at least $400,000 additionally each year, according to the FSA's Ken Johnson. The contractor must therefore build this rip-off factor into the prices, making them somewhat higher than off-campus prices. The contractor also will require a high minimum buy-in level (at least $1100 in this plan, as opposed to $900 in the current plan) to ensure that its revenues are high enough.

Now the Dining Services Committee agreed that hours should be cut in the dining halls, in order to save money and keep the buy-in level as low as possible. Of course, as mentioned in the Statesman, this would cause problems because one can't force people to eat more often in dining halls which have fewer hours. So the Administration decided after the meeting that all dining facilities should have expanded hours, as well as staying open during intersessions. (The Dining Services Committee was not informed of these decisions until it was too late to change the decision.) Superficially, this is a good thing. Unfortunately, the meal plan will have to get significantly more expensive to both cope with the additional hours and compensate for the rip-off factor. One FSA employee estimated that the minimum buy-in level might have to increase to $1200 per semester (which would make Stony Brook's plan the most expensive mandatory plan in the SUNY system).

The Administration believes that students are concerned primarily with convenience, and thus will not mind paying significantly more to get it. However, many students are concerned primarily with price, and simply cannot afford to pay up to $1200 per semester for a meal plan. What will happen to these students? Well, probably the same thing that happened to the students who couldn't afford the rapid increase in tuition over the past three years, and to the students who can't afford the room rates which are increasing to pay for the dormitory rehabilitation projects, and to the students who couldn't afford the recent TAP cuts. Namely, they'll just drop out and the Administration will continue to try to attract wealthier students to replace them. After all, there's nothing a SUNY Trustee likes better than a student who doesn't care about the cost of tuition, fees, room, or board, and there's nothing a SUNY campus President likes better than a happy SUNY Trustee.
 

"Return to Campus": How the SAC Was Sold

Generally, when the Administration wants to run a retail service, it subcontracts the service to the FSA. The FSA then goes out to bid, selects a contractor, and manages the service. Thus the FSA runs the food services on the campus and in the hospital, the bookstores on the campus and in the hospital, the laundry services, the vending machines, BASIX, the Solutions copying center, the video arcade, etc. However, the Student Activities Center was to be the first part of President Shirley Strum Kenny's "Campus Village," and so the Administration wanted to be sure it was done exactly the way they wanted it. So, except for the food court, all of the services in the SAC are now managed by Carmen Vasquez, Dean of Students. By looking at the way these services were selected, we can get a good idea of how the Administration will select the meal plan contractor.

Bank Robbery

First, the bank. The Bank Selection Committee, consisting of Tom Farabaugh, Cheryl Chambers, and Peter Baigent, formed the Request for Proposals in Fall 1996. This was sent out to about ten banks on Long Island. Only two, Teachers' Federal Credit Union (which already has a branch in the hospital and an ATM in the Administration building) and Home Federal Savings Bank (with branches in Edward's), were interested in bidding on the bank. The Selection Committee came up with a scoring grid with three components: "Satisfaction of Bid Requirements," "Cost of Service to Students," and "Return to Campus." Each component was worth 33%.

After the bids were submitted, Teachers' and Home Federal were about equal in scores of Satisfaction and Cost of Services (with Home Federal slightly higher, because they promised to do some things Teachers' couldn't). The only significant difference was in the Return to Campus: Teachers' promised to give $11,000 to the Administration yearly, over and above any rent or other contractual payments; while Home Federal promised to give $25,000 yearly. This difference resulted in Home Federal getting 19.6 out of 21, while Teachers' ended up with 14.3 out of 21.

But even then, there was still a concern that Teachers' Federal could provide things that weren't included in the scoring grid. One member of the committee said, "Although Home Federal comes out ahead on points, I think we need to consider the positive relationship that we have already established with TFCU through the branch at the HSC. Also, a significant population of faculty and staff are members of TFCU," and thus would contribute to the integration of the SAC into the University. However, the $25,000 was just too sweet to pass up, and Home Federal ended up building itself a branch in the SAC.

Unfortunately, Home Federal was not willing to implement all terms of the agreement. For example, the original requirement was that the bank must "offer a check cashing service to all members of the campus community, regardless of having accounts with the bank." Home Federal promised to do this, but when it opened it required students to have checking accounts in order to get checks cashed. The Administration fought with them, and finally got them to compromise by cashing checks from the Administration, FSA, Aramark, and other on-campus businesses, for a fee. Teachers' Federal had stated in its original proposal that it did not want to cash all checks without indemnification, while Home Federal had stated it would cash all checks. The lesson for future bidders? Try not to be too honest in your proposal...

Wallace's Convenience Store

Three companies bid on the SAC convenience store: Wallace's, which currently runs the textbook store; the FSA, which currently runs the BASIX convenience store; and Handy Pantry, a Long Island chain with ten stores in Suffolk County. It is rather harder to obtain information about the convenience store, since the contract has not yet been awarded and most of the data is not yet public.

As with the bank, the Administration's selection committee was very concerned with the "return to campus." The "Satisfaction of Requirements" category was worth 50%, the "percentage commission of retail sales to be given to the University" was worth 40%, and the "bidder?s financial stability and expertise" were worth 10%. Handy Pantry offered a commission of 3 1/8 %. The FSA offered a sliding scale commission: 4% on sales up to $400,000, then gradually increasing on all sales above that, up to 15% on all sales above $1 million. Wallace's would not say what commission they offered, and nobody in Administration could tell me, but it suffices to say that they also offered a sliding scale which was higher than the FSA's.

Like Home Federal, Wallace's also failed to implement all the required terms in the Request for Proposals. They were required to have a Point-of-Sale system (i.e. a barcode scanner), and they still do not have one (prices are manually input into the cash register). They are currently unable to provide computerized sales reports to the Administration, as required in the RFP. Wallace's has also not provided the deli and certain other items which were demanded in the RFP. So it seems that Wallace's probably didn't score very high in the "satisfaction of requirements" category. Wallace's also couldn't have scored very highly in the "expertise" category, since the company has never run a convenience store before. This suggests that Wallace's offered an extremely generous commission to make up for everything else. Perhaps this explains why a number of prices in Wallace's, e.g. for batteries and certain food items, are significantly higher than those in BASIX or 7-11: the extra money is going directly to the Administration.

Handy Pantry lodged a protest with the State Controller's office, claiming that the process used to select the convenience store was flawed. According to Joseph Stocken, Sr., the head of Handy Pantry, who filed the protest, "the bid was handled improperly; the winning bid [Wallace's] didn't follow the guidelines." He says the store was open before the contract was even approved, and that the bidding process should be reopened.

The above is not meant to be an indication of a conspiracy among Administrators to steal money from students. It is quite likely that Administration would love to see students not getting ripped off, as well as seeing the University getting extra revenue. However, when both are not possible, the Administration always seems to seek extra revenue, and this generally ends up resulting in students getting ripped off.
 

Renovations and Other Ulterior Motives

As I mentioned in the Statesman, the Administration believes that renovations to Kelly, H, and Roth are necessary and desirable. However, everybody knows that a good SUNY administration doesn't ask for renovation money from the state. So President Kenny and her Vice Presidents want to find some way of getting renovations done and having students pay for them. Much like the students either have paid or will eventually pay for those expensive dormitory renovations through increased room rates, students will eventually pay for dining hall renovations through increased meal plan rates.

The original draft Request for Proposals (RFP) had a provision saying how the University intended to raise funds. Two of the four primary goals were renovations:

"Bid Process Goals ...

3. Renovation of the three resident hall cafeterias to accommodate contemporary student dining patterns in the areas of menu and flexible time periods.

4. Renovation and/or consolidation of center campus dining facilities to include the addition of significant new dining space in the area of the central academic mall."

There was also a more explicit request deeper in the RFP: "Bidders will be asked to provide term for financing of $4 million for renovation of resident hall dining halls over the ten year period of the contract. (Assume expenditures to contractor will be $1 million in year 1, $2 million in year 2, and $1 million in year 3.)"

As I've mentioned already, $1 million in a year is about 8% of total sales, which means that the contractor would have to raise about $100 from every student on the meal plan just to give to the FSA. This would have to be pure profit, so that students would have to pay around $1300 for $1200 worth of food, on top of any other overcharging.

The Administration recently decided this would simply be too unpopular, so they are going about the same project in a more subtle way. The revised RFP has the following statement (in bold lettering): "FSA will not be looking for capital financing in the first year of the contract. Do not include this in your pricing. Instead, propose financing options for the future. Include a description of the terms for FSA, and the impact on student meal plan price." So in other words, this will still happen, but it will be postponed until students are a little more complacent and less complaining. Look for it to happen in about two years.

There is also the possibility that dining services will be used to fund other projects. Currently, the dining service operates independently, that is, nothing else on campus can contribute to it, and the proceeds from dining service must not be used for anything else. But Richard Mann, the new Vice President for Administration, reportedly has experience at other campuses in which dining service and campus residences are merged and one subsidizes the other. It has been suggested by other administration officials that he may want to see that happen here, which would mean that dining services would have to be removed from the FSA and run directly by the Administration. Of course, this would mean that students have as little input into the meal plan as they do into the dormitories. As the Administration seeks ever more control over the meal plan, it can be supposed that this is the eventual goal. The other implications of this idea remain to be seen.
 

What We Should Expect from the Bidders

The general expectations from the bidders come from what happened two years ago. Then, the only two bidders were Aramark and Marriott. Aramark had established a horrible reputation for itself, and most of the students were eager to get a new provider. In the preliminary vote of the Dining Service Committee, Marriott had the support of almost every member. However, Marriott's prices were a bit high, while Aramark's were suspiciously low. Marriott gave a rather lame presentation before both the Dining Service Committee and the Polity Senate, while Aramark's was much more elaborate. And as Aramark began offering special discounts and new programs, the body of opinion gradually shifted: Aramark was voted in nearly unanimously by the Committee.

So in the next month or so, we can expect to see more "Customer Appreciation Days" where Aramark gives away some amount of free food. We can expect to see our Aramark complaints finally rectified (e.g. price tags are now finally available in the Union Deli; hours at Papa Joe's have recently been extended; managers are suddenly very friendly, as pointed out in this very paper; the SAC suddenly has variety in the wrap station). We can expect to see extremely slick presentations from Aramark managers at any Polity meetings, and we have already seen Aramark suddenly advertising "Customer First!" in the Statesman. The more cynical among you have probably already realized that this is just a rather cheap ploy to make the students forget about all the overcharging, ignorance of student complaints, and sudden service cuts that were so much more familiar last semester. And when Aramark's bid finally arrives in late March, we can expect to see plans for new "diverse" food, with plenty of fresh ingredients, appetizing vegetarian options, and at lower prices than we could ever hope for.

Don't be fooled! Aramark did all the same last year. Remember "Changing Scenes", and all the diverse food offered? Remember how Aramark quickly abandoned all those ideas when they weren't as profitable as Burger King and Taco Bell? How about the vegetarian options promised, and how they became rice, bread, and Whoppers sans meat? Or how about the low prices promised, and how they kept increasing every semester? How about the services which were cut after the first year, because Aramark said they couldn't make any money? Aramark has cut services and increased prices virtually every year since they first got the contract, and always claimed that they were still suffering and struggling. And the fact that they promise it will never happen again just makes it all the more crucial that we not believe them.

But as everyone asked two years ago, are the other companies any better? Here's a prediction for Marriott: they will submit prices which are high enough to seem reasonable, but not so high as to be extravagant. They will offer something to please the Administration, whether it is a "return to campus" or something more subtle, like additional renovation funds. Whatever they do, it is fairly certain to many of us on the Committee that the Administration will prefer Marriott over other contractors, and will persuade the FSA Board that all other companies are not large enough to handle 5,500 students on the meal plan. Aramark will not get the contract; not because the students are unhappy, but because the FSA and Administration are unhappy with them for different reasons (involving financial statements and such things). So unless students do something drastic to assert themselves to Administration, we can expect to see Marriott trucks all over the campus, with the same problems we now have with Aramark.

So the question for the students is whether the other companies (Lackmann, Chartwell's, CulinArt, and Whitson's) will offer anything worth fighting the Administration for. Lackmann and Chartwell's were both food providers before Aramark, and both were chased off the campus for providing horrible ingredients, dirty kitchens, and generally bad service. Have they changed? Neither CulinArt and Whitson's have much experience with campuses as large as Stony Brook. Can they learn quickly? If we want to avoid the same problems we've been having for the past several years, we have to hope so.