A Huge Outsourcing Deal

Texas goes large.

A while ago via The Chronicle of Higher Education reported on massive outsourcing activity in Texas. Whilst outsourcing in itself is not that unusual, the scale of the deal done by Texas A&M University is pretty extraordinary. Last summer the university outsourced all of its main dining and facilities services to Compass Group USA this summer for an estimated $260-million in savings and revenue over the next decade:

Controversy over the decision to outsource flared on the College Station campus last spring, but then quieted after Compass Group, a North Carolina-based company, hired almost all of the university’s 1,600-some dining, maintenance, custodial, and landscaping workers. It began providing those services in the university’s stead in August.

Questions about the move persist, however, as the deal reverberates beyond the Brazos Valley. The Texas A&M system is inviting its other universities and even colleges elsewhere to take up the framework of the Compass Group contract.

As college administrators continue to face fiscal pressures, outsourcing becomes more attractive, even when it means cutting jobs. The College Station campus has lost 14 percent of its state appropriations in the past two years, and while it managed to stave off across-the-board tuition increases in that period, it saw its student-to-faculty ratio increase from 19:1 to 21:1.

Zoológico de Berlim.

The move to outsource “was all about, in tough economic times, finding the revenues that you can pour into the classroom and the research laboratory,” says John Sharp, the system’s chancellor, who drove the effort.

Texas A&M officials were already considering outsourcing the campus dining services when Mr. Sharp announced in February, after just six months on the job, that proposals were being accepted to take over not only the university’s dining operations but other services as well.

That announcement was met with resistance from faculty, staff, and students, many of whom expressed concern for the hundreds of university workers who would be affected. Others saw the decision as having come “from above,” in a move that “overrode the autonomy of the university to make its decisions,” says John N. Stallone, a professor of veterinary medicine and speaker of the Faculty Senate, who remains unconvinced of outsourcing’s benefits.

Although there was clearly some opposition it has not stopped developments as since then, the University has also outsourced landscaping, building maintenance and “custodial services” jobs across its 16 campuses. Leaving aside the question of why a university needs “custodial services” this is another major step which will result in savings of, it is claimed, $92m over 12 years.

I can’t find any details on how well these services have been operating since the outsourcing move but it in a separate development it has recently been announced that the President of Texas A&M is to stand down after a relatively brief tenure.

[Photo by Márcio Cabral de Moura used under Creative Commons licence]

2 thoughts on “A Huge Outsourcing Deal

  1. It’s easy to estimate big savings over a 10 year future time frame, delivering them not so much. This may have been the right thing for Texas A&M to do and it may be an informative development for the sector but i would be highly skeptical of projected savings figures. One to watch and see how the reality develops and how closely it matches the projected scenario.

    1. Agreed. The figures are so huge they do seem incredible. It will be interesting to look back in a decade’s time to see if reality matched the predictions

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