The Air Force has 149 main dining facilities at installations nationwide.[1] According to Air Force officials, most installations have their own individual contracts for food service, ranging from full-service contracts, providing cooking, cashiering, and cleaning services at Air Force dining facilities, to contracts that cover only basic cleaning services. The cost for these contracts, according to Air Force officials, ranges from $725,000 to $21.4 million per year, with a total cost of approximately $150 million per year for all Air Force installations. GAO has previously reported that, when contracting for services, properly defined requirements are a prerequisite to obtaining value for the department.
As GAO reported in July 2011, the Air Force recently undertook an initiative to improve food service at six pilot installations, with intentions to eventually expand this initiative to more Air Force installations in the United States over the next 5 years. This Food Transformation Initiative is primarily designed to improve the quality, variety, and availability of food. In the process, however, according to Air Force officials, the first group of pilot installations achieved cost savings compared to their previous contracts while increasing hours in the dining facilities and serving an additional 500,000 meals per year.
[1]The Air Force calls its main dining facilities “mission essential feeding facilities.” GAO uses the term main dining facilities to refer to these appropriated fund dining facilities in this report.
The Air Force has opportunities to reduce its overall food service costs at installations by reviewing food service contracts and adjusting them, when appropriate, to better meet the needs of the installation, including aligning labor needs with the actual number of meals served by the dining facilities. The Food Transformation Initiative contract was awarded to Aramark, a large company experienced in food service. The new contractor reviewed and adjusted staffing levels for contractor staff at the main dining facilities to better meet the needs of the facilities. As GAO reported in July 2011, the Air Force and Aramark anticipated reducing labor hours at five of the six Food Transformation Initiative pilot locations and using the savings to offset the costs of the Food Transformation Initiative contract. According to Air Force officials, savings for fiscal year 2010 were approximately 8 percent compared to the cost of the previous contracts. GAO compared the estimated amount of food service labor for which the Air Force contracted at the six pilot installations prior to the implementation of the Food Transformation Initiative to Aramark’s projected work schedules under the initiative and found that, even with expanded hours of operation and anticipated increases in the number of meals served, Aramark reduced the total number of labor hours at five of the six pilot installations by 53 percent. For example, at Travis Air Force Base, the number of labor hours for the mess attendant contract decreased by more than half—from approximately 2,042 hours per week to 920 hours per week. At Elmendorf Air Force Base, labor hours decreased from approximately 1,350 hours per week to 588 hours per week. The table below shows the change in the number of labor hours at all six pilot locations.
Comparison of Labor Hours under Previous Contract to Labor Hours under the Food Transformation Initiative Contract
Air Force base | Estimated weekly labor hours under the previous contract | Estimated weekly labor hours under the new contract |
|---|---|---|
Elmendorf | 1,350 | 588 |
Fairchild | 979 | 476 |
Little Rock | 1,548 | 303 |
MacDill | 1,201 | 1,063 |
Patrick | 1,218 | 1,349 |
Travis | 2,042 | 920 |
Total | 8,338 | 4,699 |
Source: GAO analysis of Air Force data.
Patrick Air Force Base was the only pilot base where the labor hours were not reduced and the only one of the pilot installations where the previous food service contract had recently been audited. The results of the audit, conducted by the Air Force Audit Agency in 2009, showed that the food service personnel did not align with the contract workload estimates with actual meals served. Specifically, meal counts were overstated, resulting in the installation paying more for contracted food services than necessary. As a result of this audit, in October 2009, Patrick Air Force Base renegotiated its workload estimates and pay rates, resulting in savings of approximately $77,000 annually.
Although it is unclear whether the opportunity for savings at the pilot installations is representative of the savings that could be realized by other installations, the potential exists for other Air Force installations that rely on contracts to meet their food service needs to achieve similar financial benefits. Prior to the implementation of the Food Transformation Initiative, the Air Force did not closely monitor the number of labor hours required to provide food services. Air Force officials told GAO that they did not realize how poorly their food service contracts were structured, in that these contracts might not be matched to the labor needs of the installation.
The Air Force has opportunities to significantly reduce its food service costs at Air Force installations that are not part of the Food Transformation Initiative pilot.[1] During GAO’s review of the Air Force’s Food Transformation Initiative, GAO discussed this potential opportunity for savings with Air Force officials. As a result, the Air Force issued a memorandum to the Major Commands directing a review of existing food service contracts to determine if the contracts meet current mission needs. For example, the memorandum indicates that special attention must be given to whether the food service contract workload estimates were properly aligned with the actual number of meals served. GAO believes that this is a good first step toward addressing this issue. GAO recommended in July 2011 that the Secretary of the Air Force should
[1]The National Defense Authorization Act for Fiscal Year 2012 contains a provision requiring the Secretary of the Air Force to submit certain information regarding the Food Transformation Initiative prior to further implementation. See Pub. L. No. 112-81, § 352 (2011). The report may provide an opportunity to evaluate the opportunities for reducing food service costs under the initiative.
The information contained in this analysis is based on findings from the product listed in the related GAO products section as well as additional work GAO conducted. GAO obtained documentation from the pilot installations regarding labor hours under the previous contracts, including memoranda showing how the contract prices were negotiated and contractor price proposals that estimated the number of labor hours for these contracts. Although these documents do not contain the precise number of labor hours for the main dining facilities, they provided the best estimates of labor costs available. GAO reviewed this information from the Air Force about the amount of labor included in previous food service contracts at the six pilot locations and compared this to information from the Air Force and Aramark presented in projected work schedules for the Food Transformation Initiative contract. Further, GAO talked with Air Force officials about opportunities for reducing food service costs outside of the Food Transformation Initiative. Finally, GAO spoke with Air Force officials about cost savings achieved from reviewing food service contracts.
GAO provided a draft of its July 2011 report to the Department of Defense for review and comment. The Department of Defense agreed with this recommendation and stated that the Commander of the Air Force Services Agency requested that each Air Force Major Command task its bases to conduct a 100 percent review of existing food service to determine if their current contract workload estimates meet current mission needs or if the contracts require modifications. According to Air Force officials, eight installations have recently reviewed and renegotiated their food service contracts for a total savings of over $2.5 million per year. Further, Air Force officials told GAO that the Air Force continues to review contracts for additional savings opportunities. The Department of Defense further noted that it intends to share the results of the Air Force’s review of its food service labor costs to achieve cost savings with the other services, where similar reviews could result in substantial financial benefits. GAO agrees that the other services should similarly consider reviewing their food service contracts for potential cost savings where appropriate. As part of its routine audit work, GAO will track the extent to which progress has been made to address the identified action and report to Congress.
For additional information about this area, contact Brian Lepore at (202) 512-4523 or leporeb@gao.gov.
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