The federal lunch and haircut trade plus other contracts totaling$21 million will be farmed out through competitive bidding for the first time in 50 years starting in November, the General Administration announced yesterday.
The move affects 31 cafeterias and four snacks bars in various Washington area federal agencies serving some 20 million meals annually.
Government workers have been fed since the 1920s by a nonprofit company called Government Services Inc. originally formed by federal officals, which also at various times have operated mule-pulled barges on the C&O Canal, a marina, tennis courts, and other concessions for the government.
But trouble has been brewing in recent years between GSI and GSA, the official government housekeeping agency responsible for negotiating the cafeteria contracts.
As GSI pressed for higher cafeteria prices, GSA wanted more information about how GSI kept its books, apportioned overhead expenses, and the like. The information was not forthcoming, according to a key GSA official.
"This finally emerged as a major issue. We finally decided to get out of this cozy relationship," said GSA regional administrator Walter Kallaur. "Perhaps it should have been done years ago."
The IRS recently revoked GSI's tax-exempt status, a matter now in litigation. Although no charges of fraud or mismanagement have been raised against GSI, Kallar said, "The point is that we just don't know."
The introduction of competition in federal lunch rooms possibly will mean more variety from one agency to the next, as different vendors compete for government workers' lunch money, Kallaur said. As for the prices, the impact likely will be mixed, with some going up and some down, he said.
As under the GSI contract, the individual agencies, rather than the vendors, will pay GSA for cafeteria space, thus affording federal workers a kind of lunch subsidy.
GSA acting administrator Paul E. Goulding said that, "By breaking up this large contract, GSA will also provide bid opportunities for small businesses, especially those owned by minorities and women."
The contract also covers five parking lots, four barber shops and five stores.
GSI, which has been "cooperative" in the contract change, will be eligible to compete on the same basis as others for the new contracts, officials said.
GSA will act to safeguard the jobs of the cooks and others who work in the cafeterias, Kalluar said, giving them preference in hiring under the new vendors.
No spokesman for GSI could be reached for comment yesterday. But over a year ago, a GSI official had complained of "Major financial difficultes" in the federal cafeteria operation. He attributed it in part to declining patronage caused by the lunchtime lure of the new Metrorail system as well as multiplying fast-food eateries.
A GSA-GSI cafeteria at the Department of Agriculture gained a kind of notoriety a couple of years ago when agriculture employes managed to get it named after a pioneer named Alfered E. Packer, who had been convicted of cannibalishm in 1874.
In a dedication ceremony at the cafeteria, Packer fan Bob Meyer, Agriculture's assistant secretary for marketing, said, "It is fitting that this cafeteria bears the name of this early Colorado pioneer because certainly the daily fare served here exemplifies his spirit and his career."