D.C. council to approve new contract with Chartwells after lawsuit

Weeks after the largest food vendor for the District’s public school system agreed to pay $19 million to settle a lawsuit alleging mismanagement and fraudulent conduct, the D.C. Council appears poised to approve a $32 million contract with the same company to continue providing food services to schools next year.

The settlement with Chartwells and Thompson Hospitality resolved a whistleblower lawsuit that alleged a joint venture between the companies overcharged the city and botched the school meals program, with food often arriving at schools late, spoiled or in short supply. The lawsuit led to an investigation and a complaint from the D.C. attorney general’s office, and some D.C. residents are frustrated that the city would continue its relationship with such a vendor.

“I don’t get it. It’s a shock,” said Emily Gustafsson-Wright, a D.C. Public Schools parent who has advocated for healthy food in schools. “Why would you go down the same path? I think we should have higher standards.”

Chartwells-Thompson did not concede any wrongdoing in the settlement, which was instigated by a former director of food services for D.C. Public Schools. Officials from Chartwells, which is a subsidiary of Compass Group USA, said the agreement reflects a desire to resolve the issues and move forward.

But after the agreement was announced, D.C. Council member Mary M. Cheh (D-Ward 3) called for the District auditor to investigate the food service contract and offer an opinion as to whether the company’s conduct should preclude it from winning future contracts. The city’s inspector general also launched an audit of the school system’s food service contracts and an evaluation of food quality and satisfaction with the food program.

The current year’s contract expires Tuesday. Next year’s contract has been submitted to the council for review, and no one has moved to challenge it.

D.C. Council member David Grosso (I-At Large), chairman of the Education Committee, said he is concerned that voting against the contract could jeopardize the city’s summer food program, already underway, which feeds students when school is out. “It would put the city in a really bad spot,” he said.

He plans to hold an oversight hearing in mid-September, shortly after the council reconvenes after a two-month recess. “I want to continue to dig into this,” he said. Some parents want that hearing sooner, but Grosso said he hopes to have more input from pending investigations by the fall.

The whistleblower lawsuit was brought by Jeffrey Mills, executive director of the school system’s Office of Food and Nutritional Services from 2010 until he was fired in early 2013. Last year, Mills settled a separate lawsuit with the school system for $450,000 that alleged he was terminated for raising concerns about the system’s mismanagement of the contract.

The school system first contracted with Chartwells in 2008, seeking to save money and improve quality. But food costs went up. An independent audit in 2012 found that the food program lost more than $10 million per year since the contract began — and many schools complained of problems with the supply and quality of food.