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Home » Clarion » 2018 » September 2018 » CUNY contracting: a cryptic process

CUNY contracting: a cryptic process


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Wage theft. Risk of injuries. Lack of benefits. This is the reality many food service workers endure while working in CUNY’s murky and complicated contracting environment.

The process by which a food service contract is awarded, even at a public institution like CUNY, is so complex that Phil Andrews, director of the Retail Organizing Project – a group affiliated with the Retail, Wholesale and Department Store Union (RWDSU) – and his colleagues took 18 months to learn about contracting.


“It took an extremely long time to figure out because it’s very obscure. There are many, many campuses running around. There are many players involved. It just evolved over time,” he told Clarion.

Because of the decentralized contracting process, campuses have their own rules when contracting vendors such as food service providers. And such contracting is done through special non profit organizations called auxiliary services corporations, or ASCs, that are filled with campus administrators, professors and even students.

In this sense, food service contractors aren’t just a contractor to CUNY, but of a separate entity outside of CUNY, making the system all the more opaque.

ASCs put out what’s called a request for proposals from different companies. Andrews explained this could be for food service or merchandising. Once a vendor is chosen, he said, ASCs can collect what are called royalties from the firms that are then transferred to the college.

“The thing that makes them very unusual is that the way these contracts are structured is the royalties, or what we sometimes call kickbacks, are very high,” Andrews said. “We’ve seen 9 or 10 percent. We’ve seen a guaranteed minimum payment.”

Andrews elaborated that, because of this, certain national food service companies have declined to bid on CUNY contracts “because those rates are too high.”

Because of the high royalty rates, vendors have been found to minimize their costs as much as possible, with wage theft and poor food quality as examples. Andrews noted that, during his research on food service at CUNY, cafeterias were shut down multiple times by city health service inspectors.

“If you talk to anyone in the food service or restaurant industry, that’s a pretty hard thing to accomplish,” he said.


The takeaway is this: not all food service providers are equal in their treatment of employees – some are more progressive than others. But the costs associated with accepting one of these CUNY contracts attracts the vendors with inferior employment practices and lower wages.

ASCs also are distinct for their legal separation from CUNY, which exempts food service vendors from city laws, Andrews explained. At LaGuardia Community College, workers unsuccessfully sued MBJ Food Services for lack of overtime pay and failure to provide a living wage. The suit was dismissed by a judge because their employer was tied to a non profit, not CUNY.

Andrews noted this was not deliberate but believed the existence of a legal barrier was intentional.

“Whether it’s deliberate or not, the outcome is that it’s obscure and not transparent,” he said.

Because of the negative press resulting from this complex web of relationships and pressure from union activists, the CUNY Board of Trustees decided to create a centralized RFP that is yet to be announced. Andrews felt optimistic the new rules would prevent many of the current abuses from happening any longer and include a labor neutrality agreement that could allow for unionization.


He viewed Queens College as an example to follow as its royalties are low, at 3 percent, and there exists fewer problems with employment policies.

“It seems obvious what the solution is here, which is that the campuses need to be willing to extract less money from the vendors if they want to have food that is decent and workers treated decently,” Andrews said.

Yet exploitation still exists on campus in an industry with high turnover, low wages and poor job security.

Steve Leberstein, a retiree officer of the PSC, explained the union’s history of worker solidarity made it clear that food service workers deserve support, especially since about 30 percent are former CUNY students.

“We don’t want to benefit off the exploitation of people without the resistance of a union,” Leberstein said.

He expressed concerns about the royalties colleges receive as the funds are not thoroughly documented despite audits of the ASCs. He cited the actions of former City College President Lisa Coico, who used foundation funds for personal expenses, as examples of what could go wrong.

“The issue that concerns me, is what happens to the funds that are collected? Where do they go? There’s no reporting that I know of,” Leberstein said.


Susan Kang, a political science professor at John Jay College, recalled how her union chapter shared concerns about MBJ with John Jay administrators, who were receptive and concerned with food service workers on campus. In May, RWDSU activists protested outside John Jay demanding the campus switch from MBJ to a food service provider with a better record in treating its workers. Kang was optimistic about current plans to reform the RFP process to prevent current abuses from happening.

“Ideally, written statements and language of a contract would determine outcome,” Kang said. “We know that’s not true. It might require further activism from students and faculty.”

She recalled inviting representatives from the Retail Action Project, part of the RWDSU, to talk to her students about conditions at John Jay for workers. After her students were informed, they felt “really upset” and pledged to help sign a petition for the workers.

“We need to show solidarity with all the workers on campuses,” Kang said.

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