HARRISBURG – The Keystone Research Center today released a new report that details how outsourcing food services is not saving school districts money, as is often promised by food service contractors, and results in higher costs for school districts on average.
Diana Polson, PhD, and Claire Kovach, PhD, co-authors of the new report “False Promises: Food Service Contractors Don’t Save Pennsylvania School District Money,” used a mix of rigorous statistical analysis and interview-based qualitative research to find that contracting food services—their management or the entire operations—does not yield the financial benefits school districts are promised by contractors.
The report found that, when compared to years that a district staffs its own cafeteria, the presence of Food Service Management Contractors (FSMC) results in net income (what schools call an “operating position”) that is nearly $40,000 lower than in years with no FSMC involvement, on average. The report also highlights a cooperative of school district food service directors – the Pittsburgh Regional Food Service Directors network – that provides to self-providing districts through group purchasing the main benefits contractors claim: cost savings on food and reduced management headaches with food purchasing. The network also provides invaluable peer learning and continuing education/professional development for food service directors.
“There is no room in school food service for profit,” says Food Director Martin Lorenzo. “Self-operated school food directors typically always prioritize the nutrition and well-being of their students, without having to consider the priorities of an outside company. Any profits that we see are reinvested right back into the program so that they may yield continuous improvements that pay dividends in maintaining a fiscally solvent operation for years to come.”
“Our mixed-methods report shows that promises food service contractors often make aren’t borne out in the data,” says Claire Kovach. “Food service management contractors could save school districts money by sharing savings from bulk purchasing and lower cafeteria personnel costs, but if these cost savings are present, our analysis shows they’re not being passed onto districts.”
The authors conclude that the Pennsylvania Department of Education should: better track the number of bidders when districts request proposals from food service contractors, and the bid amounts; better track when a contractor is only buying and overseeing the production of food and when they also employ all the workers; and make all this data publicly available. The report also concludes that the state Department of Education should require that in-house programs participate in a buying cooperative with other in-house programs.
“As food service management companies have been gaining ground in the state, the Pittsburgh Regional Food Service Directors network, made up of in-house food service directors, offers an alternative to outsourcing food service,” says Diana Polson. “It is a co-op with many benefits for both directors and school districts as it creates economies of scale – lowering food costs and making easier the process of food purchasing—as well as operating as an education and resource hub where directors share their talents and expertise to benefit all members.”
You can read the full report here.
You can view a webinar about the report with the authors here.