Chartwells pays $19 million to settle lawsuit

The largest food vendor for the District’s public school system has agreed to pay $19 million to settle a lawsuit alleging that the company overcharged the city and mismanaged the school meals programs, with food often arriving at schools late, spoiled or in short supply.

The settlement agreement is the result of a whistleblower lawsuit by a former director of food services for D.C. Public Schools against Chartwells and Thompson Hospitality, which formed a joint venture that provided food services for schools in the District starting in 2008.

The suit led to an investigation and then a complaint from the D.C. attorney general’s office.

“Chartwells has quite reasonably acknowledged and addressed mistakes it made in administering the contract to provide food and food services to DCPS,” Attorney General Karl A. Racine said in a statement Friday. “It is important to ensure that contractors who receive District funds are held accountable for fulfilling their obligations under the contracts, and today’s settlement does just that.”

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 suit ­alleged that he was terminated for raising flags about the system’s mismanagement of the contract.

“I hope that my lawsuit against Chartwells and the settlement announced today will help improve the food programs for D.C.’s school children, which has always been my goal,” Mills said in a statement issued Friday by Phillips & Cohen, a District-based law firm that filed Mills’s whistleblower lawsuit in 2013.

“The issue of private food vendors prioritizing profits over the well-being of students is a national concern,” Mills said. “I urge all school districts using private food vendors to examine their contracts and the performance of those vendors.”

The settlement leaves the validity of the original claims undetermined, as it does not represent an admission of fact or liability by the contractor.

Owen Donnelly, a spokesman for Chartwells, said in an e-mail that the company “denies any wrongdoing and has agreed to resolve the issues so that focus continues to be on nourishing the bodies, minds and spirits of students to pave the way for a lifetime of success and well-being.”

Donnelly said the underlying issues at DCPS were primarily related to cost overruns and “related reconciliations.”

“In our seven years at D.C. Public Schools, we have significantly increased the quality of food service while saving the District millions of dollars,” he said.

The school system signed a contract with Chartwells in 2008 to provide food services that had formerly been provided in-house. In the District, a majority of students are poor, and many rely on the school nutrition program for meals.

The goals of privatizing the service were to save money and improve the nutritional value of the food.

Another contract was signed in 2012, despite concerns.

The previously sealed complaint from the Office of the Attorney General claimed that Chartwells “knowingly submitted” false invoices that the school system paid.