University catering contracts - serving up success
Where food provision is outsourced, your University wants to be comfortable that you have the contractual levers in place to make sure that delivery by your caterer meets your, and your students' expectations.
As with any outsourcing, there will be a range of commercial, legal and practical elements for you to work through with your procurement, estates and legal teams. Where your University falls within the scope of the Public Procurement regime, compliance with the new Procurement Act will of course be key. TUPE and workforce issues will be important factors to get right given their importance to delivery of the services. The basis on which the caterer is able to access the University premises - and whether occupation is on the basis of a lease or a licence - will need careful thought.
However, for the purposes of this article we have focused on a handful of issues which are specific to the operation of catering contracts. These issues will need early and careful consideration when tendering for a new catering provider.
Investment in facilities
The appointment of a new catering contractor is a good moment to consider whether your catering facilities are up to scratch or would benefit from some investment. Typically, your caterer will be taking the risk in whether it is able to drive sales through the various catering outlets. An important part of its ability to drive those sales will be the quality of the environment and the quality of the offering that the caterer is able to provide.
Tired facilities, and temperamental kitchen equipment, will hinder their ability to drive sales and manage their costs. As such, your caterer may well be motivated to invest in your facilities at the start of the contract in the expectation of being able to see a return on that investment over the term of their appointment.
Of course, nothing in life is free, and your caterer will expect to be repaid a proportion of that investment if the contract comes to an end early (leaving them unable to generate their return). The cost of that investment is also likely to feed through into the commercial terms that you are offered, particularly in relation to the level of any profit or revenue share deal that you might be able to do with them. However, at a time when constrained budgets mean that this sort of capital expenditure might not be at the top of your University's priorities, investment from your caterer can be an attractive option.
Monitoring and managing quality
Your caterer may have promised 'silver service' quality at fast food prices in their tender documentation, but unless your contract reflects those promises - and gives you levers to pull to ensure delivery against them - they will be of little value. For those levers to be really effective, you should consider whether performance against those promises is measurable and whether falling short against those promises should lead to direct financial consequences.
A carefully thought-through KPI regime which sets out the key (measurable) deliverables and provides for meaningful consequences where delivery falls short, can be a really useful contract management tool. It provides a framework for you and the caterer to focus on as part of the performance review process. If implemented properly, these provisions should provide you with 'early warnings' where standards are slipping, allowing them to be brought back on track before they slip too far.
The temptation can be to include the kitchen sink in your list of key performance indicators. We would caution against that. Far better to have a focused list of KPIs, targeted at those elements of the catering provision which are particularly important to you and which you are confident you will measure and monitor. In our experience, areas such as student satisfaction, waste reduction and menu variability are all elements which can usefully be measured and monitored in this way.
Sustainability matters
Your catering provision is one area where you can really 'walk the walk' when it comes to sustainability and very often those sustainable practices make good commercial sense for your caterer, as well as being the 'right' thing to so. By reducing waste generally, your caterer will be reducing waste management costs. By reducing food waste, they will be increasing the return on their food purchases. By increasing the sustainably of the food that they source (whether in terms of farming practices, food miles, etc) your caterer should have a more compelling offer to their student customers.
Of course, there will be circumstances where there is a tension between those sustainable practices, and your caterer's motivation to keep their costs down (and margins up). Including mechanisms in your contract to require compliance with key sustainable business practices can therefore be a useful way for your University to demonstrate how you ensure that sustainable business practices are at the heart of how your University operates.
Regulatory compliance
Through your tender process, you will have insisted that your caterer demonstrates their commitment to the highest standards of health and safety, compliance with food laws and regulations, etc. Although provided by a third-party caterer, your students will associate the catering provision with the University and failings in compliance will impact the reputation of the University (and, in the extreme, could lead to claims against the University).
You will want to ensure that your contract with your caterer includes robust commitments from the caterer in terms of that regulatory compliance and provides you with appropriate remedies where that compliance falls short. In appropriate circumstances, you will want the ability to terminate your caterer's contract where there is particularly egregious or persistent non-compliance.
How can we help?
Your University’s catering provision should make a valuable contribution to the quality of the University's broader offering and should reflect the University's ethos. That will certainly be an important part of the basis on which you select your preferred catering provider.
In order to ensure that your caterer's tender translates into genuinely delivered benefits, those commitments need to be set out in your catering contract. Doing that at the start of the process (with you taking the lead on contract terms) rather than later in the process and responding to supplier terms, will almost always result in a better outcome for your University.