DC Public Schools' primary school food provider charged the system $7 million more than agreed upon to serve students 15 million fewer meals over five years, according to an audit of the contract and testimony of local lawmakers.
Anthony DeGuzman, chief operating officer of the school system, said Thursday he is investigating whether Chartwells-Thompson owes the schools money. The D.C. Council slammed DCPS for renewing the Chartwells contract, which has operated at a loss of more than $10 million annually and which has upset parents, who say Chartwells is serving their children unhealthy food such as Cinnamon Toast Crunch cereal.
"Have you ever heard of anything as bad as this?" Ward 3 Councilwoman Mary Cheh asked a panel of witnesses at a Thursday hearing, to silence. "No ... I think what we've done over the last few years is really an abomination."
From 2008 to 2012, Chartwells was contracted to serve 50 million meals at a cost of $42 million. Instead, the company ended up serving only 35 million meals but charged the schools $49 million.
DeGuzman said Chartwells may have ended up serving children different food than the original contract stipulated. He also pointed to new features like salad bars, which cost more to fill and staff.
The public school system's food contract was privatized under former Mayor Adrian Fenty, who believed contracting with Chartwells would cut costs and provide better food for children, freeing former Chancellor Michelle Rhee to focus on the schools' academic priorities.
But the contract has never allowed the schools to break even or run a profit like neighboring Montgomery County Public Schools, which generated $2 million from its in-house food service program last year. Cheh and Ward 8 Councilman Marion Barry said they believe DCPS should run its own food service, an option DeGuzman said he was "not closed to."
Steven Jumper, a spokesman for Chartwells, deferred comment on the budget gap to DCPS but issued a statement calling the city's audit "highly flawed."
"The audit report reached conclusions that cannot be reconciled with [our] contemporaneous documentation," Jumper said in an email.
DeGuzman said he is "digging into" the gap and is monitoring the first fiscal quarter. While DCPS' food service ran at a $12 million loss last year, DeGuzman said, a new contract they negotiated will save the city 8 percent of the roughly $37 million cost. That means the D.C. Council is likely to be on the hook for another $9 million subsidy.
"I'm not sure your procurement process was aggressive enough in securing the right price," said Council Chairman Phil Mendelson.
Several parents advocated for DCPS to run its own food service, questioning whether a for-profit company could truly have their children's best interests at heart. Jody Tick said she was concerned when her child's all-natural yogurt was switched out for Yoplait Trix yogurt.
"What's so confounding about this food situation is it doesn't have to be this way," Tick said.