A&M's Outsourcing Plans Have Workers Concerned

Landscaping workers are among the Texas A&M University employees who will have to join an outside company, because A&M is outsourcing its support services.
Landscaping workers are among the Texas A&M University employees who will have to join an outside company, because A&M is outsourcing its support services.

When the Texas A&M University System announced that its flagship would gain $260 million in new revenue and savings in the next 10 years by outsourcing its building maintenance, landscaping and dining services, Chancellor John Sharp said the plan was an unprecedented way to raise money in financially struggling higher education.

“Today’s announcement means more money will be available to recruit, pay and retain faculty and researchers,” he said at a news conference on June 21.

But excitement over the plan is not universal. Many people on campus and in the surrounding community are worried and angry. A&M staff members who perform the support services have expressed concern over their future employment. And Bryan-College Station vendors fret that they could lose one of their biggest clients.

“Texas A&M has one of the finest business schools in the country, and yet we can’t figure out how to in-house save money out of our department,” said Walter Draper, an assistant custodial supervisor and one of the outsourcing plan’s many detractors. 

As financially squeezed public universities increasingly turn to the private sector to generate revenue, their actions can create discord within college communities. The University of Texas at Austin has been derided for starting the Longhorn Network, a 24-hour sports channel that it said would raise hundreds of millions of dollars but that has failed to win major cable contracts.

 

The private partner in A&M’s effort is Compass Group USA, based in North Carolina. The company is expected to take over support services at A&M in August, creating its largest partnership with a university.

The 1,647 A&M employees who currently do that work will have to resign from the university and join Compass Group. They have been told that their jobs, after they undergo a reapplication process and pending a background check, are guaranteed for at least two years with comparable benefits and the same salary. That includes a 4 percent raise to offset the difference between the benefits that A&M and Compass Group provide.

Yet many of the affected employees are still worried, saying that they feel jilted by “the Aggie family.” Six days after the outsourcing announcement, more than two dozen members of the A&M support staff met in the lobby of the College Station Hilton to commiserate.

“We mean less to them than the grass under their feet,” said Sandra Roney, who has worked as a custodian for 17 years.

R. Bowen Loftin, Texas A&M’s president, said adequate accommodations for the staff was a critical component of the agreement with Compass Group. “They really deserve to be treated well,” Loftin said, “because they have treated us well.”

Representatives from Compass Group have met with workers to help guide them through the transition.

Still, that has not eased the concerns of many workers. Some say they are bothered by the fact that they will no longer be public employees and will not accumulate any more years of public service toward retirement. Others are fearful of how they will be treated by their new employer.

“What we’re being told is you can take it or leave it,” said a mechanic in building services who asked not to be named out of fear of repercussions.

 

Local vendors, meanwhile, say they have not heard from Compass Group. In the past, A&M has relied on nearby companies like Slovacek Sausage, Scarmardo Produce, Ruffino Meats and a Mrs. Baird’s Bread distributor to supply its kitchens. But none of those companies have been told whether that relationship will continue after the transfer.

“We really don’t know,” said Greg Scarmardo, a co-owner of Scarmardo Produce, who said that A&M is one of his five biggest clients.

Sarah Hada, a spokeswoman for Compass Group, said all current food providers would be reviewed as part of the transition. “There is a process where potential vendors can apply to become an approved vendor,” Hada said. “But strict standards must be met.”

Compass Group already handles food services for Texas State University in San Marcos and provides janitorial services for Texas A&M-Corpus Christi. But when Chancellor Sharp measures the success of his revenue-generating plan, he points to the Longhorn Network, the television network of A&M’s main rival.

“I probably shouldn’t say this, but this overall contract is two-thirds bigger than the Longhorn Network pays the University of Texas,” he said at the news conference last month.

UT partnered with ESPN on the network, which started last year and was projected to earn the university about $300 million over the next 20 years.

The Longhorns have received $5.7 million so far this fiscal year, of which nearly $4 million will go toward academics. A new faculty chair in fine arts has already been established using the proceeds, with more expected in departments including philosophy, physics and mathematics.

Unlike A&M’s arrangement with Compass Group, UT’s television partnership is geared solely toward generating new revenue as opposed to saving on existing operations. But the network has had a difficult transition, and its widespread lack of availability has become a repeated source of frustration and derision. The network is still pursuing distribution deals and encouraging would-be viewers to contact major cable providers and ask them to carry it.

Not even UT-Austin President Bill Powers can currently tune in to the network from his home, though he said it was still a work in progress.

“It is a very high priority for us to make sure our fans, alumni and people that are interested can get it,” Powers said.

He applauded other institutions for finding new revenue opportunities.

“We’re always looking to be entrepreneurial in how we can provide the highest-quality education at the lowest cost to both taxpayers and students,” Powers said.

“Change is always difficult,” said Loftin, A&M’s president. “Human nature is to embrace stability and reject change. But those who embrace change and make it work for them have been the most successful.” 

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