Senate to Privatize Restaurants 2008-07-01

The U.S. Senate has voted to privatize its Senate Restaurants foodservice operations, which are expected to be taken over by Restaurant Associates. The company has been managing dining operations for the House of Representatives since last December (see the May 2008 FM).

The reason for the move was mounting deficits that had to be subsidized by taxpayers, an estimated $2 million this year and more than $18 million in the past 15 years, according to a report by the Congressional Budget Office.

Senate Restaurants outlets include the Senate Dining Room on the first floor of the Capitol, where senators and their guests are served by staffers wearing jackets and ties, as well as a large cafeteria in the Dirksen Senate Office Building and various snack and coffee shops throughout the Senate complex.

Total annual sales are around $10 million, but the GAO report says that top line success has delivered a profit in only seven of the past 44 years. Recently, lackluster, static menu offerings (reportedly, only 20 new items have been introduced to Senate Restaurant menus in the past 10 years) and high labor costs (workers average $37,000 a year in wages) have eroded participation and raised costs.

Consequently, many Senate staffers, and even some Senators, regularly trek over to the House foodservice operations. Also, Senators increasingly now use outside caterers rather than the Senate Restaurant catering arm.

Following privatization, current workers will retain their salaries and benefits but new employees will not receive federal benefits, though they will be allowed to unionize.

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