Off the Arkansas Times site. It will be interesting to hear what vendors do for Fayetteville, especially athletics.
Officials: College-vendor contracts with perks common Posted on 14 September 2011 By Rob Moritz Arkansas News Bureau
LITTLE ROCK — State colleges and universities commonly hire vendors under contracts that include money or other perks for the schools, officials told lawmakers today.
In fact, officials of several two and four-year institutions acknowledged the schools have arrangements not too different from the one that recently cost the University of Central Arkansas president his job.
The UCA Board of Trustees voted Sept. 2 to buy out Allen Meadors’ contract after he misrepresented as a “gift” food vendor Aramark’s offer of $700,000 toward renovations at the president’s residence in exchange for renewal of a food service contract with the university.
Unlike the UCA contract, officials said, the other schools’ agreements were endorsed by the leadership of the college or university after they were made aware of all the details.
“It’s interesting to me that this is fairly common, yet it was such a surprise to us,” Sen. Sue Madison, D-Fayetteville, said during Wednesday’s meeting of the Higher Education Subcommittee of the Arkansas Legislative Council.
Members discussed the vendor contracts during a more than three-hour review of tuition cost containment efforts at state higher education institutions.
Four two-year colleges and four four-year universities were reviewed Wednesday. Five more four-year schools, including the University of Arkansas in Fayetteville, and eight two-year colleges are on today’s agenda. The remaining state schools will be reviewed by the subcommittee at its October meeting.
The UCA board’s unanimous vote to buy out Meadors’ contract came a day after the trustees convened a special meeting to discuss the Aramark deal. Several board members said they did not know the details.
UCA is currently conducting an internal investigation. Meadors’ departure comes two years after he took over as head of the university in 2009, replacing former UCA President Lu Hardin, who resigned amid a financial scandal involving a $300,000 bonus in 2008.
Today, UCA Interim President Tom Courtway told lawmakers that the university has two other vendor agreements, in effect for several years, that include payments to the school.
A 10-year contract with Pepsi that began in 2003 included an initial $500,000 company payment to the university and annual payments of $50,000. The company also was allowed to place vending machines throughout the campus.
Courtway said the agreement was worth about $2 million, the majority of which he said went to construction of a new athletic practice facility.
Also, he said a contract approved in 2007 with bookseller Barnes and Noble to run the university bookstore includes provisions that the company make annual payments totaling at least $365,000 to the school. Additionally, Barnes and Noble made a $150,000 one-time donation to UCA when the contract was approved and contributes $3,000 a year to a book scholarship fund.
Diane Newton, UCA’s vice president for finance, told lawmakers that bids were taken on both contracts and those financial agreements were included in the offers. “So when they submitted the bid, they said ‘we’ll also put in it with this extra?’” Madison asked.
“Yes, that was part of their offer,” Newton responded, adding that other vendors included similar offers in their bids.
Courtway, who was UCA’s general counsel before being named to replace both Hardin and Meadors, told lawmakers he was not involved in the agreement with Aramark.
Officials with Henderson State University, Arkansas Tech and the University of Arkansas at Little Rock told lawmakers their schools receive payments as part of vendor contracts.
HSU President Bobby Jones said the university has a contract with Aramark under which the food service company agreed to pay the university $2.5 million toward construction of a new dining facility. The vendor also agreed to help the university pay off the project’s debt with an annual payment of $94,000.
Jones said the agreement required the university to extend Aramark’s contract from seven to 10 years, which it did at the beginning of the current fiscal year with HSU board’s approval.
“We’ve had Aramark on campus since 1996,” Jones said, adding Aramark bid on each contract renewal until the most recent. “We’re very satisfied with the services Aramark provides to us.”
UALR President Joel Anderson told the panel the book store contract the school renewed with Barnes and Nobles last year included the vendor paying $150,000 used toward construction of a food service facility in a residential hall.
Arkansas Tech President Robert Brown told the committee that in 2004 the university renewed its contract with Chartwell Food Services and the company paid the school $1.2 million, which was used to upgrade women’s sports facilities on campus. The food service company had had the contract with the university since 1996.
Brown said the agreement has been cost effective, noting that an ATU student can receive a meal plan — three meals a day — for $9.84 a day.
“We think it’s a terrific bargain for our students,” he said. “We believe that given the level that they can provide, we don’t think we can beat that.”
The contract comes up for renewal in 2014 and “if they’re not up to par, we’ll seek someone else.”
Sen. Jimmy Jeffress, D-Crossett, questioned the agreements that Arkansas Tech and other universities have made with vendors.
“Even though it is not illegal, I promise you will not find 99 out of 100 who think it’s proper,” Jeffress said. “I don’t think that this is proper.”
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