Marriott Corporation serves food to more than a million Americans every day -- on airline flights, at cafeterias, in plush corporate dining rooms, at tollroad stops, or in public restaurants that range from Roy Rogers to the Port o'Georgetown.
Literally tens of thousands of menuvariations are involved, and the variations constantly change to reflect availability and prices of different foods.
A steak dinner in 1975 may have included a potato but not today. The number of ounces in that steak may have changed.
In what may come as a surprise to the federal government, this venture has included trips for accountants from coast to coast and extensive new computer work on prices and wages in previous years. In one instance, the process of gathering wage data for computer use would have been so expensive and taken so many months that the data was compiled manually. So much for the computer age.
"It was almost impossible to determine price changes for airline catering because of a deliberate change made in pricing formulas -- from one previously based on food costs to one now computed largely on labor costs," recalls Senior Vice President Thomas Burke.
"Even the parsley to decorate a plate is part of the food cost," Burke adds.
Like all of the nation's largest businesses -- those with annual sales of $500 million or more -- Bethesda-based Marriott is scheduled to file information with the Council on Wage and Price Stability as of today, providing formulas by which prior data can be compared with prices and wages in the future.
COWPS officials will start using the information to carry out its mandate of monitoring price and wage decisions to see if they comply with President Carter's guidelines, announced in an address to the nation on Oct. 24. COWPS Director Barry Bosworth said Tuesday that any firm asking for it will receive a two-week extension of today's deadline and, because of the problems it has faced, Marriott will be one the firms asking for such a delay.
The council has decided to focus about 80 percent of its attention on monitoring the 400 largest firms and has required them to provide data for a 1976-1977 base period. In addition, companies seeking government contracts of $5 million or more must provide commitments to the guidelines by today or risk losing U.S. business -- a club challenged recently as illegal by the General Accounting Office but defended by COWPS with a Justice Department opinion.
Marriott is not a significant government contractor and company president J. W. Marriott Jr. didn't receive a personal letter from President Carter last fall asking his firm's cooperation with the new program. Those letters went to officers of the "Fortune 500" industrial firms and Marriott doesn't make that list -- even though larger than half of the "500" -- because it is in the services business and does not manufacture goods.
Still, business executive Marriott had been on record as declaring inflation the nation's most serious issue long before the Carter White House moved toward voluntary controls. And Marriott welcomed the new program, although he didn't hide his disappintment that other measures weren't included -- such as delaying increases in the minimum wage, which he sees as robbing disadvantaged young people of jobs while pushing inflation ever onward.
Marriott told his subordinates that the company is "generally in concurrence with President Carter's attempt to hold down inflation through the wage and price formula... we have adopted all necessary procedures to monitor compliance on a corporatewide basis and we expect to meet the guidelines in 1979."
To begin the time-consuming and costly process of making certain that his company would comply, Marriott moved soon after Carter addressed the nation by calling in Senior Vice President and Chief Accounting Officer Francis W. Cash and designating him to be in charge and to develop whatever task force was necessary.
What follows is an account of what Cash and Marriott have done since. Similar efforts have been made at all the other large companies at a total cost in manpower, travel, materials and computer time that cannot be calculated easily. Marriott figures at least three full-time senior management ment jobs have been applied to the program full time since November, and one new person is about to be hired to some of the work done by these officials in normal times.
The Bethesda firm is engaged in operating hotels, amusement parks, restaurants and food service operations, with some 70,000 employes working at 910 units throughout the nation (about 14,000 locally, making Marriott one of the principal private employers here).
At first, Cash and his colleagues realized that the government's deadline of today could not have come at a worse time: Marriott currently is moving to a new headquarters near Montgomery Mall and some offices, personnel and files are there while the rest are in transit or still residing on River Road. In addition, the firm just changed its fiscal year accounting period from 12 months ended in July to a calendar year, which pushed the guidelines base period back into the last half of 1975 (part of fiscal 1976) and helped to complicate all the datagathering efforts, at the exact time accountants were busy compiling new reports on the changed fiscal years.
But Cash pulled together a task force that included William Shaw, vice president and corporate controller; Sterling Colton, head of the legal department; and Cliff Ehrlich, vice president for personnel. They immediately contacted Marriott's outside accounting firm, Arthur Andersen & Co., which established its own task force to help clients nationwide.
Shaw and two or three accounting managers attended several of a rash of Washington seminars that soon cropped up as the accounting and legal professions sought to provide explanations about what the government really wanted from business. And Cash used information from all these sources to later brief controllers from all of Marriott's domestic operations on what was needed "as far as we could tell."
Cash determined early on that information on file at the River Road headquarters was not adequate. In December, accounting people traveled to the amusement park offices in Santa Clara, Calif., and the Big Boy restaurant offices in Pasadena (where the manual computing work proved necessary).
The world of hotels posed a unique problem, because of the many food and liquor items and services -- and volatile prices. To probe historic data (Marriott has hotels in 46 cities with more than 21,000 rooms), Cash's people got old menus out of the files at five hotels picked at random from throughout the chain. They conducted spot checks on all food and beverage prices. "The whole thing was an enormous problem for us," Burke says. "Essentially, we're still checking and rechecking."
In January, Cash and Shaw met with the presidents of Marriott's key divisions to review the status of their work and outline a program of keeping the firm in compliance with the Carter mandate. Last week, another meeting was held with top officers of the overall company, to formulate final policy.
Shaw has been given the job of drafting a directive for all managers, requiring that any material price increase proposal has to be submitted to him. He will have a final decision on implementing increases although President Marriott will have a role in resolving any disputes.
On the wage side, Marriott's problem is less than that of many large firms because only a small portion of the work force is unionized. Payroll histories from the base period to today were compiled on computers and had to include wages, bonuses and total benefit packages.
Basically, Carter's program requires that overall wage package increases should be held to 7 percent a year while price boosts should be at least 0.5 percentage point below the average price increases in the 1976-1977 period. There is a complication: Mandated minimum wage rates are in the process of being increased 46 percent over four years but such workers are exempt from the 7 percent ceiling. Thus, company labor costs will go up (the lodging and restaurant industry employs most minimum-wage, entrylevel workers). "They're raising the floor but holding to a tight ceiling," Burke lamented.
As of this week -- Marriott people still were at work on the program yesterday -- Cash had devised a 10 point program of his own for the company.
His mandates include one to the compensation department, to monitor stock option grants; a requirement that the controller provide companywide compliance reports on a quarterly basis; and an order to group controllers that they forecast price changes for the year ending Sept. 7.
"We'd love to play a major role in stopping inflation. We will go along, there's no doubt we will be in compliance," Burke sums up. "But who's watching government... If given that government itself is a primary contributor to inflation, then isn't it interesting that it is in a position to put chains around business and no one can just as effectively put chains on government for some of the policies it espouses?"