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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

July 2011: 

Defense Management: 

Actions Needed to Improve Management of Air Force's Food 
Transformation Initiative: 

GAO-11-676: 

GAO Highlights: 

Highlights of GAO-11-676, a report to congressional committees. 

Why GAO Did This Study: 

To assess quality of life and identify areas for improvement, the Air 
Force conducts periodic surveys of its airmen. Recent surveys indicted 
that many of them were not satisfied with the quality, variety, and 
availability of food at Air Force bases. As a result, the Air Force 
implemented an initiative in 2010—the Food Transformation Initiative—
to improve on-base food services. The Air Force piloted the initiative 
at six installations with a $10.3 million contract awarded in August 
2010 and plans to eventually expand the initiative to other 
installations in the United States. The Senate and House Armed 
Services Committees directed GAO to undertake a comprehensive review 
of the initiative. GAO reviewed (1) the initiative’s objectives and 
performance measures, (2) implementation progress, (3) the initiative’
s impact on food service workers at the pilot installations, and (4) 
alternative approaches the Air Force considered. GAO reviewed 
documentation on the initiative, interviewed Air Force and contractor 
officials, and visited four of the six pilot installations. 

What GAO Found: 

The Air Force established eight objectives for its Food Transformation 
Initiative, but it has not fully developed metrics or an evaluation 
plan for assessing the initiative’s results. When GAO began its 
review, the Air Force had developed metrics for three of the eight 
objectives. The Air Force subsequently identified metrics for four 
additional objectives, but it did not have a robust evaluation plan, 
as called for by best practices derived from prior GAO work and 
various guidance documents, that describes how the initiative’s 
results will be measured. Without well-defined metrics, contained in 
an evaluation plan that is clearly linked to its objectives, the Air 
Force is not in a position to adequately assess the results of the 
pilot and make informed decisions about the initiative’s future. 

The Air Force has made some improvements to its food service 
operations as a result of the Food Transformation Initiative, but a 
key part of the initiative has been delayed, and it is too early to 
measure its results. The Air Force has obtained mostly positive 
feedback on the changes it has made, but the data collected to date 
are preliminary. In addition, the campus dining concept, which will 
allow airmen to use their meal cards to eat at on-base dining 
facilities other than the main dining facility, had not been 
implemented at the time of GAO’s review. Therefore, this concept, a 
key part of the initiative, could not be assessed. Furthermore, 
initial data show that the Air Force may have underestimated some of 
the costs of the initiative, by overestimating the number of hours 
military personnel can provide the contractor for cooking and food 
preparation. 

The Food Transformation Initiative, as implemented so far, has had 
varying effects on food service workers. All military and civilian 
cooks at the main dining facilities have maintained their jobs, but 
some expressed concerns about increases in their job responsibilities. 
Most contract mess attendant employees have retained their jobs, but 
the total number of these employees has been reduced and some contract 
employees lost their jobs as a result of the initiative. Further, most 
civilian employees at nonappropriated fund food and beverage 
operations, such as clubs and snack bars, accepted jobs with the new 
contractor, but their job security remains uncertain as the contractor 
tries to make the facilities profitable and the remaining parts of the 
initiative are implemented. 

The Air Force included three options in its analysis of alternatives 
in selecting its method for improving its food services, but did not 
follow its own guidance for identifying and assessing alternatives 
that would meet the program’s stated objectives. GAO found that two of 
the three alternatives were not viable options to be considered 
because they only met three of the program’s eight objectives. In 
addition, the Air Force may be able to reduce its food service costs 
by reviewing and renegotiating its existing food service contracts at 
bases that are not part of the pilot program. 

What GAO Recommends: 

GAO recommends that the Air Force take several actions to improve 
management of the Food Transformation Initiative, including developing 
an evaluation plan to assess the initiative’s results before moving 
beyond the pilot. In commenting on a draft of this report, the 
Department of Defense concurred with all the recommendations. 

View GAO-11-676 or key components. For more information, contact Revae 
Moran at (202) 512-3863 or moranr@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

The Air Force Has Established Objectives for the Food Transformation 
Initiative, but Has Not Fully Developed Metrics or an Evaluation Plan 
for Assessing Results: 

The Food Transformation Initiative Has Produced Some Food Service 
Improvements, but More Time Is Needed to Measure Results: 

A Key Part of the Initiative--the Campus Dining Concept--Has Not Been 
Implemented: 

Initial Labor Cost Information Indicates Savings May Be Less Than 
Estimated: 

Implementation of the Food Transformation Initiative Has Had Varying 
Effects on Food Service Workers: 

The Air Force's Food Transformation Analysis of Alternatives Was 
Limited, and Other Options for Achieving Cost Savings May Be Available: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Defense: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Dining Facilities at Each Pilot Installation: 

Table 2: Food Transformation Initiative Objectives: 

Table 3: Increase in Hours of Operation at the Main Dining Facilities: 

Table 4: Projected Cost of Dining Facility Renovations at Six Pilot 
Installations: 

Table 5: Change in the Number and Percentage of Meals Purchased at the 
Main Dining Facilities: 

Table 6: Number of Ability One Workers before and after the Food 
Transformation Initiative: 

Table 7: Number of Former Nonappropriated Fund Food and Beverage 
Operation Employees Who Accepted Positions with Aramark: 

Table 8: Employees Eligible for and Enrolled in the Nonappropriated 
Fund Retirement System: 

Table 9: Comparison of Labor Hours under Previous Contract to Labor 
Hours under the Food Transformation Initiative Contract: 

Figures: 

Figure 1: Comparison of Customer Satisfaction Survey Results for Pilot 
Bases to All Air Force Bases, 2010: 

Figure 2: Entryway at Dining Facility, MacDill Air Force Base, 
Florida, before and after Initiative: 

Figure 3: Salad Bar at MacDill Air Force Base, Florida, before and 
after Implementation of the Food Transformation Initiative: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

July 26, 2011: 

Congressional Committees: 

Maintaining satisfaction with quality of life is a key ingredient in 
the Air Force's ability to successfully retain needed personnel. To 
assess quality of life and identify areas where improvements are 
needed, the Air Force conducts periodic surveys of airmen. Through 
these surveys, the Air Force found many airmen were not satisfied with 
the quality, variety, and availability of food at Air Force 
installations. In an effort to improve satisfaction in this area, the 
Air Force developed a program--the Food Transformation Initiative-- 
designed to improve the quality, variety, and availability of food 
while continuing the training of military cooks who feed airmen during 
deployments. In October 2010, the Air Force began piloting the 
initiative at six Air Force installations and plans to eventually 
expand it to other installations in the United States.[Footnote 1] 

On August 31, 2010, the Air Force awarded the contract for the Food 
Transformation Initiative to Aramark, a large company experienced in 
food service, and on October 1, 2010, issued a delivery order for an 
estimated $10.3 million.[Footnote 2] The contract covers a full range 
of dining services, including cleaning the facility and menu 
development, as well as providing input into the design of renovations 
for some of the existing dining facilities at the six pilot bases. It 
is anticipated that the renovations to the main dining 
facilities,[Footnote 3] expected to cost an additional $9 million, 
will generally be paid for by the Air Force, subject to funding caps. 
While the initiative is focused on improving food and service at the 
main dining facilities, a second element is to have the contractor 
operate the nonappropriated fund food and beverage operations, such as 
clubs and bowling center snack bars, because many of these facilities 
were losing money and in danger of being closed. By including the 
nonappropriated fund food and beverage operations in the initiative, 
the Air Force will eventually be able to allow the installations to 
institute "campus style dining," where airmen can use their meal cards 
to purchase food at different facilities at each installation. 
[Footnote 4] 

In reports accompanying proposed bills for the National Defense 
Authorization Act for fiscal year 2011,[Footnote 5] the Senate and 
House Armed Services Committees directed that we undertake a 
comprehensive review of the Air Force's Food Transformation 
Initiative. In response, we reviewed (1) the initiative's objectives 
and performance measures, (2) progress the Air Force has made in 
meeting the objectives of the initiative, (3) the initiative's impact 
on food service employees at the pilot bases, and (4) the Air Force's 
consideration of alternative approaches for transforming its food 
service program. 

To address these objectives, we interviewed Air Force officials about 
the development of objectives and performance measures for the 
initiative and assessed the objectives and performance measures in 
view of Department of Defense (DOD) and Air Force guidance and 
criteria from our previous work. In addition, we collected and 
analyzed data related to the initiative's objectives, such as changes 
in the number of meals served and the level of airmen's satisfaction 
with food services. To assess the reliability of these data, we 
discussed the procedures for generating and verifying the data with 
knowledgeable officials and, where possible, examined the data for 
obvious anomalies. Where we found limitations with the data, we 
presented that information in the report, but otherwise determined 
that the data were sufficiently reliable for the purposes of our 
report. We also interviewed contractor officials, union 
representatives, and food service employees about their experiences 
under the initiative and reviewed information on the impact the 
initiative has had on civilian food service employees, military food 
service personnel, food service contract workers, and employees at 
nonappropriated fund food and beverage operations. Further, we 
assessed the process the Air Force used in selecting the Food 
Transformation Initiative, including alternatives that were 
considered. We compared the Air Force's business case analysis, which 
describes the alternatives considered, to the criteria provided in the 
GAO Cost Estimating and Assessment Guide[Footnote 6] and Air Force 
guidance. We also discussed with Air Force officials options other 
than the Food Transformation Initiative they could have considered for 
improving food service at other installations. We conducted this 
performance audit from September 2010 to July 2011, in accordance with 
generally accepted government auditing standards. Those standards 
require that we plan and perform the audit to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings 
and conclusions based on our audit objectives. We believe that the 
evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. A more detailed description 
of our scope and methodology is included in appendix I. 

Background: 

In the Air Force, food service program oversight is provided by the 
Air Force Services Agency, headquartered in San Antonio, Texas. The 
agency is responsible for oversight of the Air Force's food service 
program, including developing the menus for the main dining facilities 
and providing training for military food service workers who assist in 
food preparation and the operation of dining facilities. According to 
Air Force officials, each Air Force installation contracts for mess 
attendant services, such as cleaning and cashiering services, at their 
main dining facilities and is responsible for awarding and managing 
these contracts. In addition, although many installations use both 
military and civilian personnel as cooks, according to Air Force 
officials, some installations have expanded their mess attendant 
services contracts to enable them to use contract employees to prepare 
and serve food. Depending on the availability of and priorities given 
to contractors located near the installations, according to Air Force 
officials, the installations may award these food service contracts to 
small business firms,[Footnote 7] contractors covered by the Randolph- 
Sheppard Act,[Footnote 8] or contractors covered by the Ability One 
program.[Footnote 9] 

The Air Force Services Agency, which developed the Food Transformation 
Initiative and awarded the implementation contract for the six pilot 
installations to Aramark, is responsible for managing and overseeing 
the execution of the contract, along with a contracting officer's 
representative from each base's Force Support Squadron. Under the 
contract, Aramark is responsible for overseeing the day-to-day food 
service operations at the six pilot installations and planning and 
executing the menus. Aramark is also responsible for subcontracting 
for the required food service labor at the pilot installations and is 
required under its contract to subcontract with Ability One agencies 
for the main dining facilities.[Footnote 10] Aramark works with the 
Ability One agencies to negotiate the labor hours needed and the cost 
of labor at the pilot installations. 

Air Force officials plan to implement the initiative at a second set 
of up to eight installations after assessing the results of the 
initiative at the six installations in the pilot program. If the 
initiative continues to be successful, they plan to implement it at 
more Air Force installations in the United States over the next 5 
years. Potentially, the Food Transformation Initiative could be 
implemented at all of the Air Force's 149 appropriated fund dining 
facilities nationwide. 

Initially, the Food Transformation Initiative focused on improving 
food service at the pilot installations' main dining facilities by 
increasing the hours of service, remodeling the dining facilities 
(using money provided by the Air Force), developing new menus, and 
providing an executive chef at each location. In addition, the main 
dining facilities were opened to all installation personnel. 
Previously, the main dining facilities at most installations were not 
available to all installation personnel. According to Air Force 
officials, the potential increase in customers by opening the dining 
facilities to all installation personnel is a key component of the 
initiative because making greater use of a facility, which has fixed 
overhead costs, could help defray the costs of providing meals. 

According to the Air Force, the initiative also offered installation 
commanders the option of turning over their nonappropriated fund food 
and beverage operations, such as bowling center and golf course snack 
bars and officers' and enlisted members' clubs, to Aramark in a 
commission-based contract.[Footnote 11] Table 1 lists the pilot 
installations and dining facilities included in the Food 
Transformation Initiative contract. 

Table 1: Dining Facilities at Each Pilot Installation: 

Air Force installation: Elmendorf; 
Main dining facilities: 
* Iditarod Dining Facility; 
* Kenai Flight Kitchen; 
Nonappropriated fund food and beverage operations[A]: 
* Eagle's Nest Café at the Eagle Glen Golf Course; 
* The Warehouse Grill at the Kashim Enlisted Club; 
* Paradise Café at the Community Center; 
* Hillberg Snack Bar[B]. 

Air Force installation: Fairchild; 
Main dining facilities: 
* Warrior Inn; 
* Warrior Inn Express; 
* Ross Dining Facility; 
* Flightline Feeding Facility; 
Nonappropriated fund food and beverage operations[A]: 
* Funspot Bowling Center Snack Bar; 
* Comingled lounge at the Bowling Center[C]; 
* Final Point at the Club Annex. 

Air Force installation: Little Rock; 
Main dining facilities: 
* Hercules Dining Facility; 
* Flight Line Kitchen; 
Nonappropriated fund food and beverage operations[A]: 
* Deer Run Golf Course; 
* Strike Zone Café at the Bowling Center; 
* Hangar 1080 Club. 

Air Force installation: MacDill; 
Main dining facilities: 
* Diner's Reef; 
* Flight Kitchen (colocated with Diners' Reef); 
Nonappropriated fund food and beverage operations[A]: 
* Bay Palms Golf Course Snack Bar; 
* MacDill Lanes Snack Bar at the Bowling Center; 
* Bayshore Officers' Club; 
* Boomer's Bar and Grill - Enlisted Club; 
* Seascapes Beach Club - All Ranks Club. 

Air Force installation: Patrick; 
Main dining facilities: 
* Riverside Dining Facility; 
* Riverside Flight Kitchen; 
Nonappropriated fund food and beverage operations[A]: 
* Manatee Cove Golf Course Café and Lounge; 
* Rocket Lanes Ten Pin Café; 
* The Tides Club and The Blockhouse - Enlisted Club. 

Air Force installation: Travis; 
Main dining facilities: 
* Sierra Inn; 
* Sierra Inn Grab and Go; 
* Golden Bear Flight Kitchen; 
Nonappropriated fund food and beverage operations[A]: 
* Gatsby's Grill at the Golf Course; 
* Strike Zone Grill at the Bowling Center; 
* Delta Breeze Colocated Club; 
* Rickenbacker's Coffee Shop. 

Source: GAO analysis of Air Force information. 

[A] As represented by the Air Force. 

[B] The Statement of Objectives includes seasonal operation of the 
Hillberg T-Bar Grill among the potential future dining opportunities, 
available for incorporation into the delivery order at the 
installation's discretion. A modification to the initial 
nonappropriated fund order for Elmendorf adds a line item to allow the 
contractor to operate the Hillberg facility snack bar from February 7 
to March 31, 2011, based on specified terms and conditions. The 
modification states that "[n]o commissions will be paid due to the 
partial season and timeline" and that a "reassessment of the operation 
will occur after completion of the season before additional seasons 
are addressed." 

[C] This facility does not appear on the nonappropriated fund order 
with the contractor, but the Statement of Objectives for Fairchild Air 
Force Base indicates that the installation desires to develop a 
comingled bar/lounge adjacent to the snack bar. 

[End of table] 

Traditionally, nonappropriated fund food and beverage operations have 
been part of the installations' morale, welfare, and recreation 
program run by nonappropriated fund personnel employed by 
nonappropriated fund instrumentalities at each Air Force installation. 
[Footnote 12] According to Air Force officials, these food and 
beverage operations have been losing money, and including them in the 
contract with Aramark was an attempt to make them more profitable. For 
example, according to Air Force data, the nonappropriated fund food 
and beverage operations at the six pilot installations lost almost 
$950,000 during the 5-year period from fiscal year 2005 to fiscal year 
2009. In fiscal year 2009, the clubs, golf course snack bars, and 
bowling center snack bars at the Travis and Elmendorf Air Force bases 
lost about $122,000 and $99,000 respectively. In the new arrangement, 
Aramark operates the facilities, including hiring personnel to run the 
operations and developing menus, and plans to invest its own money to 
remodel some of these nonappropriated fund food and beverage 
operations. In return, the nonappropriated fund instrumentality will 
receive a commission on each sale. At each of the pilot locations, the 
installation commanders decided to turn over operation of many of 
their nonappropriated fund food and beverage operations to Aramark. 

The Air Force Has Established Objectives for the Food Transformation 
Initiative, but Has Not Fully Developed Metrics or an Evaluation Plan 
for Assessing Results: 

The Air Force has established eight objectives for its Food 
Transformation Initiative, but it has not fully developed the metrics 
or an evaluation plan for assessing the initiative's results. Best 
practices, such as those prompted by principles derived from our 
previous work,[Footnote 13] and from DOD and Air Force guidance, 
[Footnote 14] suggest that programs need specific metrics against 
which their performance can be measured. These metrics should be well 
defined and include measurable targets. Our previous work further 
suggests that, ideally, these objectives and metrics should be 
described in a single document, such as an evaluation plan that 
defines how results can be measured. This is especially important for 
a pilot program so that performance information can be used to make 
changes and adjustments to make the program more effective before 
expanding its implementation to other installations. Without an 
evaluation plan with well-defined metrics that are clearly linked to 
the objectives, the Air Force may not be in a position to adequately 
assess the results of the pilot program and make informed decisions 
about the initiative's future. 

The Air Force Developed Eight Objectives for Its Food Transformation 
Initiative: 

The Air Force developed eight objectives for its Food Transformation 
Initiative, as shown in table 2.[Footnote 15] Some of the objectives 
focus on activities that expand food options for airmen and other 
personnel with access to the installation, while others focus on 
training, efficiencies, and costs. For example, part of one of the 
objectives is to open the main dining facilities to everyone on the 
installation and to allow airmen to use their meal cards at locations 
other than the main dining facility. 

Table 2: Food Transformation Initiative Objectives: 

Objective: 1. Enhance food quality, variety, and availability; 
Description: Improve the visual appearance and taste of menu items; 
offer healthy food; increase menu items; increase hours. 

Objective: 2. Maintain home base and war fighting feeding capabilities; 
Description: Ensure that airmen receive experience and training in 
food service and are ready to deploy. 

Objective: 3. Focus on airmen's changing needs, lifestyles and 
preferences; 
Description: Better align food service with the needs of the customers. 

Objective: 4. Enhance sense of community; 
Description: Make the main dining facility a community food 
establishment, making airmen feel more a part of their community by 
allowing them to use their meal card privileges at food outlets other 
than the main dining facility. 

Objective: 5. Improve programs and facilities; 
Description: Renovate dining facilities to the atmosphere that is 
similar to what is found on college campuses; 
bring additional food service availability to the installation by 
enhancing remote feeding capabilities. 

Objective: 6. Provide enhanced nutritious meals; 
Description: Continue to provide nutritious food that meets DOD 
nutritional standards. 

Objective: 7. Improve efficiency; 
Description: Improve food service delivery approaches to improve 
efficiency. 

Objective: 8. Decrease costs; 
Description: Maintain or decrease the cost of operating the main 
dining facilities. 

Source: GAO analysis of Air Force information. 

[End of table] 

The Air Force Has Not Fully Developed Metrics and an Evaluation Plan 
to Use in Assessing the Initiative's Results: 

Our initial review of the Air Force's documentation on the Food 
Transformation Initiative showed it had limited information on how it 
planned to measure implementation of the objectives and, ultimately, 
the results of the pilot program. We initially found that the Air 
Force had defined metrics for three of the initiative's eight 
objectives:[Footnote 16] 

* To measure progress on its first objective--enhancing food quality, 
variety, and availability--the Air Force plans to use its annual 
customer satisfaction survey and set a goal score of 70 out of 100 for 
the survey questions pertaining to hours of operation, food variety, 
food pricing, and the overall dining experience.[Footnote 17] However, 
the Air Force's annual customer satisfaction survey could be biased 
and therefore may not provide the data it needs to measure results for 
this objective because the response rate for recent surveys has been 
low. For example, although 58,805 active duty airmen responded to the 
survey, the response rate was about 17 percent. Further, the Air Force 
did not perform a nonresponse analysis to determine whether it is 
likely that those who did not respond to the survey would have 
provided substantively different answers from those who responded. 

* To measure progress in meeting its seventh objective--improving 
efficiency--the Air Force plans to track and monitor Aramark's 
quarterly financial statements to identify whether the contractor was 
adhering to its original budget for labor costs. The Air Force defined 
this objective as improving food service delivery to improve 
efficiency in maintaining food, labor, and nonfood costs. However, 
based on the documentation we reviewed, it was not clear that a 
specific goal had been established for the various cost elements. 

* For its eighth objective--decreasing costs--the Air Force plans to 
use information from the same sources to measure results as the 
information for its seventh objective, improving efficiency. 
Specifically, the Air Force plans to monitor Aramark's quarterly 
financial statements to track the operating expenses of the dining 
facilities. The Air Force currently defines the metric for this 
objective as maintaining or decreasing costs as compared to previous 
food service contracts. However, initially the Air Force estimated 
that the Food Transformation Initiative would achieve a 30 percent 
cost savings when compared to existing food service contracts. Since 
that time, the Air Force has reduced that estimate to 27 percent. 
However, neither figure was being used as an actual metric for 
measuring results for this objective. 

During the course of our review, we brought to the Air Force's 
attention the lack of defined metrics for all objectives and an 
evaluation plan for measuring progress in achieving the initiative's 
objectives. As a result, the Air Force developed four additional 
metrics for its objectives. 

* To measure progress in meeting its second objective--maintaining 
home base and warfighting feeding capabilities--the Air Force plans to 
monitor the readiness of military food service personnel to deploy 
using DOD's readiness system. The goal is to achieve a readiness score 
of C-1, which means that these personnel have the required resources 
and are trained to undertake the full mission for which they are 
trained without any compensation for deficiencies. 

* To measure progress in meeting its third objective--to focus on 
airmen's changing needs, lifestyles, and preferences--the Air Force 
plans to use its annual customer satisfaction survey. Specifically, 
the Air Force has defined goal scores for two specific survey 
sections: food and satisfaction. Under the food section of the survey, 
the Air Force has defined a goal score of 76 out of 100 for the part 
titled "type of food you want." Under the satisfaction section of the 
survey, the Air Force will use the score on how well the dining 
facility rates "compared to expectations" and has defined a goal score 
of 76. In addition, the Air Force will measure the number of available 
meals that meal card holders eat on the installation, with a goal of 
having meal card holders eat 70 percent of available meals. 

* For its fifth objective--to improve programs and facilities--the Air 
Force will again use its annual customer satisfaction survey to 
measure results and has a goal score of 85 out of 100 on the 
facilities section of the survey. 

* To measure progress in meeting its sixth objective--providing 
enhanced nutritious meals--the Air Force has defined a target score of 
80 out of 100 on the "availability of healthy food choices" question 
in the customer satisfaction survey. 

At the time we completed our review, the Air Force had not yet defined 
a metric for its fourth objective--to enhance a sense of community. 
The Air Force stated that it will use its annual customer satisfaction 
survey to measure the effect of increased use of the dining facility 
on having a sense of community, but it had not defined goal scores in 
this area. 

Most of the evidence we obtained on the Air Force's planned 
assessments of the initiative was in the form of written responses to 
our inquiries and a modification to a delivery order under the 
contract that laid out some specific goals the Air Force had developed 
for the contractor. The modification contains an incentive fee plan 
with key performance indicators that will be used to determine the 
availability of an incentive fee. Several of the key performance 
indicators may link to performance metrics for the objectives, 
[Footnote 18] but neither the contract itself nor the delivery order 
explicitly outlines the eight Food Transformation Initiative 
objectives or provides all performance metrics to measure those 
objectives. At the time of our review, Air Force officials stated that 
they did not have planning documents that lay out the metrics, data 
sources, or planned assessment schedules for the pilot program. They 
also told us that they recognized the need to further refine their 
metrics and develop an evaluation plan. 

The Food Transformation Initiative Has Produced Some Food Service 
Improvements, but More Time Is Needed to Measure Results: 

Although the Air Force has made some improvements to its food service 
operations as a result of the Food Transformation Initiative, it is 
too early to measure the results of the initiative. The Air Force has 
obtained mostly positive feedback on the changes it has implemented, 
but the data collected to date are preliminary, and parts of the 
initiative have not been implemented. For example, implementation of a 
key part of the initiative, the campus dining concept, which will 
allow airmen to use their meal cards to eat at food service locations 
other than the main dining facility, has been delayed from January 
2011 and had not been implemented at the time of our review. 
Furthermore, the data we reviewed on labor costs for the first 6 
months of the Aramark contract indicated that the actual savings from 
the initiative may be less than the Air Force's initial 30 percent 
cost savings estimate. In its initial estimates of the costs of the 
initiative, it appears that the Air Force overestimated the number of 
hours military personnel would be able to work in the dining 
facilities and underestimated the wages of contract employees. As a 
result, it is unclear whether the Air Force will successfully meet its 
objective of reducing costs as a result of the initiative. 

The Air Force Has Made Improvements to Its Food Service Operations and 
Progress in Meeting Some Objectives of the Food Transformation 
Initiative: 

The Air Force has made improvements to its food service operations and 
cited progress in meeting five of its eight objectives for the Food 
Transformation Initiative at the six pilot installations. 
Specifically, officials stated that they have made significant 
improvements to the menus and increased the hours of operation, which 
has led to increased customer satisfaction. According to Air Force 
officials, these activities show progress in meeting three of the 
program's objectives: enhancing food quality, variety, and 
availability (objective 1); providing enhanced nutritious meals 
(objective 6); and focusing on airmen's changing needs, lifestyles, 
and preferences (objective 2). 

To achieve its goals, Aramark added a pizza station, improved the 
salad bar, and enhanced the deli menu in the main dining halls. In 
addition, Aramark revitalized the menus, adding new recipes, such as 
chicken marsala and shrimp scampi, while keeping some traditional Air 
Force recipes that were popular among the airmen. According to the Air 
Force officials, more healthy cooking options are now available 
because the menu selections include more fresh vegetables. At each of 
the four bases we visited, Air Force officials stated that there has 
been increased customer satisfaction with the quality of the food. 

Air Force officials also stated that increasing the hours of operation 
to make food service more available was an integral part of the 
objective to enhance food quality, variety, and availability. Under 
the Food Transformation Initiative, the six pilot installations have 
increased the hours of operation at their main dining facilities. The 
hours of operation increased to 112 hours per week at the main dining 
facilities at each base except Patrick Air Force Base, which does not 
have a requirement for a midnight meal period.[Footnote 19] Officials 
at several of the installations we visited noted that the customers 
were pleased with the expanded hours. 

Table 3: Increase in Hours of Operation at the Main Dining Facilities: 

Air Force base: Elmendorf; 
Number of weekly hours before the Food Transformation Initiative: 66.0; 
Number of weekly hours after the Food Transformation Initiative: 112.0; 
Increase in number of weekly hours: 46.0; 
Percentage increase in weekly hours: 69.7%. 

Air Force base: Fairchild; 
Number of weekly hours before the Food Transformation Initiative: 58.5; 
Number of weekly hours after the Food Transformation Initiative: 112.0; 
Increase in number of weekly hours: 53.5; 
Percentage increase in weekly hours: 91.5%. 

Air Force base: Little Rock; 
Number of weekly hours before the Food Transformation Initiative: 45.5; 
Number of weekly hours after the Food Transformation Initiative: 112.0; 
Increase in number of weekly hours: 66.5; 
Percentage increase in weekly hours: 146.2%. 

Air Force base: MacDill; 
Number of weekly hours before the Food Transformation Initiative: 56.3; 
Number of weekly hours after the Food Transformation Initiative: 112.0; 
Increase in number of weekly hours: 55.8; 
Percentage increase in weekly hours: 99.1%. 

Air Force base: Patrick; 
Number of weekly hours before the Food Transformation Initiative: 42.0; 
Number of weekly hours after the Food Transformation Initiative: 98.0; 
Increase in number of weekly hours: 56.0; 
Percentage increase in weekly hours: 133.3%. 

Air Force base: Travis; 
Number of weekly hours before the Food Transformation Initiative: 63.0; 
Number of weekly hours after the Food Transformation Initiative: 112.0; 
Increase in number of weekly hours: 49.0; 
Percentage increase in weekly hours: 77.8%. 

Source: GAO analysis of Air Force data. 

[End of table] 

The data the Air Force plans to use to measure its progress in meeting 
these three objectives are from its annual customer satisfaction 
survey. According to the most recent customer satisfaction survey, 
conducted from December 2010 to January 2011, survey respondents at 
the six pilot installations indicated higher levels of satisfaction 
than respondents at Air Force bases that had not implemented the Food 
Transformation Initiative in the areas of having the type of food they 
wanted, hours of operation, and availability of healthy food choices 
(see figure 1). The respondents indicated higher levels of 
satisfaction at the six pilot locations, but the survey goals of 76 
out of 100 for "type of food you want" and 80 out of 100 for 
"availability of healthy food choices" were not met. The goal of 70 
out of 100 for "hours of operation" was achieved. Air Force officials 
note they used this survey, as well as additional information gathered 
from the private sector, to help define goal scores and will 
reevaluate their goals each year of the program. However, as noted 
previously, due to the low response rate, these survey data may not be 
reliable enough for comparison purposes. 

Figure 1: Comparison of Customer Satisfaction Survey Results for Pilot 
Bases to All Air Force Bases, 2010: 

[Refer to PDF for image: vertical bar graph] 

Survey question: Type of food you want; 
Food Transformation Initiative locations: 75; 
Non-Food Transformation Initiative locations: 67. 

Survey question: Hours of operation; 
Food Transformation Initiative locations: 78; 
Non-Food Transformation Initiative locations: 71. 

Survey question: Availability of healthy food choices; 
Food Transformation Initiative locations: 78. 
Non-Food Transformation Initiative locations: 70. 

Source: GAO analysis of Air Force data. 

Note: Survey respondents were asked to rank items on a scale of 1 to 
10, with 1 considered poor and 10 considered excellent. These rankings 
were then converted to scores of 0 to 100. Due to the low response 
rate, these survey data may not be reliable enough for comparison 
purposes. 

[End of figure] 

Air Force officials stated that, while there is still work to be done, 
they have started to transform the dining facilities to create an 
atmosphere similar to what is found on college and university 
campuses, which is an important part of objective 5--improve programs 
and facilities. Although major renovations of the main dining 
facilities have not begun, Aramark has made some changes, such as 
enhancing food displays and improving the appearance of dining 
facility entryways. The photographs in figures 2 and 3 illustrate 
improvements made to the entryway and the salad bar at MacDill Air 
Force Base. 

Figure 2: Entryway at Dining Facility, MacDill Air Force Base, 
Florida, before and after Initiative: 

[Refer to PDF for image: 2 photographs] 

Source: Air Force. 

[End of figure] 

Figure 3: Salad Bar at MacDill Air Force Base, Florida, before and 
after Implementation of the Food Transformation Initiative: 

[Refer to PDF for image: 2 photographs] 

Source: Air Force. 

[End of figure] 

The Air Force plans to spend almost $9 million in renovations to the 
main dining facilities at the six pilot installations. Air Force 
officials stated that they expect the renovations to begin in June or 
July 2011. Plans for renovating the dining facilities include 
expanding the cashier area to allow for more cashiers during peak 
periods, removing walls to open up the food service area and create a 
more efficient customer flow, adding more seating capacity, and making 
general cosmetic upgrades. Table 4 lists the projected costs of 
renovations at each of the six pilot installations. 

Table 4: Projected Cost of Dining Facility Renovations at Six Pilot 
Installations: 

Air Force base: Elmendorf; 
Cost (dollars): $1,238,439. 

Air Force base: Fairchild; 
Cost (dollars): $2,176,729. 

Air Force base: Little Rock; 
Cost (dollars): $865,029. 

Air Force base: MacDill; 
Cost (dollars): $1,610,745. 

Air Force base: Patrick; 
Cost (dollars): $1,402,358. 

Air Force base: Travis; 
Cost (dollars): v1,696,545. 

Air Force base: Total; 
Cost (dollars): $8,989,845. 

Source: Air Force. 

[End of table] 

Another objective in which Air Force officials said they have made 
some progress is objective 4--enhancing a sense of community. They 
told us an essential part of this objective is to open the dining 
facilities to everyone on the base. Prior to the initiative, five of 
the six pilot installations allowed only active duty enlisted 
personnel to dine at the main dining facilities. Installation 
officials noted that opening the main dining facilities up to everyone 
who has access to the installation has had a very positive effect, 
improving the sense of community. 

Table 5 shows a comparison of the number of meals purchased at the 
pilot installations for the first 6 months after implementing the 
initiative (October 2010 to March 2011) to the same 6-month period the 
previous year. Over 250,000 more meals were purchased in the main 
dining facilities after the initiative was implemented. Over 187,000 
of those meals reflected an increase in the number of cash paying 
customers. 

Table 5: Change in the Number and Percentage of Meals Purchased at the 
Main Dining Facilities: 

Base: Elmendorf; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by meal card customers: 94,979; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by cash customers: 38,511; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by meal card customers: 98,941; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by cash customers: 64,715; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Number: 3,962; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Percentage: 4; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Number: 26,204; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Percentage: 68. 

Base: Fairchild; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by meal card customers: 85,716; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by cash customers: 54,998; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by meal card customers: 86,549; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by cash customers: 76,602; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Number: 833; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Percentage: 1; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Number: 21,604; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Percentage: 39. 

Base: Little Rock; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by meal card customers: 68,914; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by cash customers: 38,546; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by meal card customers: 111,991; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by cash customers: 46,853; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Number: 43,077; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Percentage: 63; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Number: 8,307; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Percentage: 22. 

Base: MacDill; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by meal card customers: 38,073; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by cash customers: 58,494; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by meal card customers: 42,814; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by cash customers: 111,576; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Number: 4,741; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Percentage: 12; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Number: 53,082; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Percentage: 91. 

Base: Patrick; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by meal card customers: 23,012; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by cash customers: 33,776; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by meal card customers: 17,614; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by cash customers: 95,612; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Number: (5,398); 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Percentage: (23); 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Number: 61,836; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Percentage: 183. 

Base: Travis; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by meal card customers: 132,659; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by cash customers: 46,455; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by meal card customers: 150,106; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by cash customers: 62,981; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Number: 17,447; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Percentage: 13; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Number: 16,526; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Percentage: 36. 

Base: Total; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by meal card customers: 443,353; 
Total meals purchased, October 2009 through March 2010: Meals 
purchased by cash customers: 270,780; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by meal card customers: 508,015; 
Total meals purchased, October 2010 through March 2011: Meals 
purchased by cash customers: 458,339; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Number: 64,662; 
Increase (decrease) in total meals purchased: Meals purchased by meal 
card customers: Percentage: 15; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Number: 187,559; 
Increase (decrease) in total meals purchased: Meals purchased by cash 
customers: Percentage: 69. 

Source: GAO analysis of Air Force data. 

[End of table] 

Meal card holders have always been able to use the main dining 
facilities, but Air Force officials said they believe the increase in 
usage is a further indication of the effect of the increased hours of 
availability and improved food choices. The number of airmen choosing 
to use their meal card benefits at the main dining facility after 
implementation of the initiative increased at five of the 
installations, including Little Rock Air Force Base, where customers 
using meal cards increased by more than 60 percent. Air Force 
officials attributed part of the increase to an increase in the number 
of airmen at the installation during this period, but also to the 
expanded menus and increased hours that resulted from the initiative. 
Only Patrick Air Force Base had a decrease in the number of meal card 
customers served. Air Force officials attributed this change to a 
decrease in the number of airmen at the installation during this 
period. The Air Force had not fully developed a metric for measuring 
progress in meeting this objective and had not implemented all changes 
related to this objective, but Air Force officials stated that, based 
on the increased usage of the dining facilities, they believe some 
progress has been made. 

Additional Time Is Needed to Measure the Results of the Food 
Transformation Initiative: 

Although the Air Force reported improvements to its food service 
program, it is too early to measure the results of the Food 
Transformation Initiative, even at the pilot installations. According 
to service officials, data on the impact of changes made to date are 
preliminary and may not predict future results. For example, Air Force 
and base officials stated that some of the increases in the number of 
customers may be due to a "honeymoon phase" in which customers visit 
the main dining facility because it is new or different. Thus, there 
may be some decrease in the number of customers as the newness of the 
changes in the dining facilities wear off. Installation officials also 
told us that increased satisfaction with the food selection and hours 
of operation may also decrease over time. Customers have expressed 
some dissatisfaction already, primarily with the increase in prices 
for cash-paying customers. As part of the Food Transformation 
Initiative, the Air Force raised the prices paid by cash customers at 
the main dining facilities by increasing the surcharge paid on the 
cost of food to 90 percent.[Footnote 20] Previously, cash customers 
paid the cost of food plus a 60 percent surcharge. According to Air 
Force officials, this price increase helps offset the cost of the 
contract. Officials at the four installations we visited noted that 
cash-paying customers expressed some dissatisfaction with the price 
increases. According to the Air Force's recent customer satisfaction 
survey, the six pilot installations scored lower on satisfaction with 
the price of food at the main dining facilities compared to other Air 
Force installations. Air Force officials said that they have adjusted 
some prices in response to the negative comments, especially for the 
salad bar, and will continue to make necessary adjustments as they 
obtain more customer feedback. 

A Key Part of the Initiative--the Campus Dining Concept--Has Not Been 
Implemented: 

At the time of our review, the campus dining concept, in which airmen 
will be able to use their meal cards to eat at dining facilities on 
the base other than the main dining facility, had not been implemented 
at any of the six pilot bases. The Air Force originally expected this 
part of the initiative to be implemented in January 2011. This was 
later changed to April 2011 and then to June and July 2011. Air Force 
officials told us they expected to implement campus dining at Patrick 
Air Force Base in June 2011 and at the remaining five pilot bases in 
July 2011. 

Implementation of the campus dining concept was delayed for several 
reasons, according to Air Force officials, including the need to 
develop a policy on how the campus dining concept will work--such as 
what purchases will be allowed for those using meal cards at 
facilities other than the main dining facilities--and delays in 
developing the software needed to track all meal card purchases. Air 
Force officials told us they only recently acquired the software 
needed to track meal card purchases and were beginning to test it. In 
addition, they upgraded the hardware, if necessary, for the main 
dining facilities and bought additional hardware to support campus 
dining at some of the nonappropriated fund food and beverage 
operations. When operational, this software will allow the Air Force 
to determine how often and where airmen use their meal cards. In 
addition, Air Force officials told us that they recently completed 
negotiations with Aramark on the menu options that will be available 
for airmen to purchase with their meal cards at the nonappropriated 
fund food and beverage operations. 

Officials at Elmendorf Air Force Base raised additional concerns about 
the campus dining concept because the installation is a joint base 
with the Army's Fort Richardson. At the time of our review, soldiers 
stationed at Fort Richardson were allowed to use their meal card 
privileges at the main dining facility at Elmendorf Air Force Base. 
Installation officials said they would like that privilege to be 
extended to the nonappropriated fund food and beverage operations 
under the campus dining concept and did not want to implement campus 
dining until this issue had been resolved. Air Force officials told us 
that, initially, campus dining was going to be restricted to Air Force 
personnel stationed at Elmendorf Air Force Base. 

The campus dining concept is an important part of the Food 
Transformation Initiative and of meeting the Air Force's fourth 
objective--to enhance the sense of community--by allowing airmen to 
use more of the base community when eating their daily meals. The Air 
Force recently addressed the issues that led to the delay of the 
campus dining concept, but it had not fully implemented this part of 
the initiative at the time of our review. Therefore, the Air Force 
cannot assess the concept or make necessary adjustments to this key 
part of the initiative. 

Initial Labor Cost Information Indicates Savings May Be Less Than 
Estimated: 

It is too early to determine cost savings resulting from the Food 
Transformation Initiative, but initial information on labor costs 
indicates that actual savings may be less than the 30 percent cost 
savings originally estimated by the Air Force. The Air Force 
underestimated contract labor costs because it overestimated the 
number of military labor hours it could provide to the contractor for 
cooks and food preparers. Specifically, the Air Force estimated that 
military personnel would be able to provide approximately 32,000 hours 
per month of labor in the dining facilities at the six pilot 
installations. However, the military personnel for whom these 
estimates were provided have not been able to provide the projected 
number of hours to the contractor because of other duties. As a 
result, Aramark has hired additional contract staff to make up some of 
the difference, which could increase contract labor costs. 

We found that, for the first 6 months of the contract, the number of 
military labor hours was about 14,000 hours less than originally 
estimated for the six pilot installations. At Elmendorf Air Force 
Base, labor costs were projected to increase by $105,000 for the 
remainder of the fiscal year as a result of fewer military personnel 
being available. Air Force officials told us they plan to hold Aramark 
to its original budget, but they indicated that, in certain 
situations, after Aramark provides adequate documentation, the Air 
Force will pay the higher labor costs. 

The Air Force also underestimated the subcontractor labor costs to be 
incurred by Aramark. For example, we found that, for the first quarter 
of fiscal year 2011, Aramark submitted requests for reimbursement for 
subcontractor labor costs that were about $400,000 more than those 
originally estimated by the Air Force. For the second quarter of 
fiscal year 2011, subcontractor labor costs submitted for 
reimbursement were about $600,000 more than originally estimated. 
According to the Air Force, these costs may be the result of a pay 
raise resulting from an annual wage determination that was unaccounted 
for in the original budget and not under the control of Aramark. Air 
Force officials told us that they have requested supporting 
documentation for the higher labor costs but have not paid this amount 
to Aramark. However, the officials indicated that, with adequate 
support from the subcontractor, the Air Force would pay the higher 
labor costs. 

Implementation of the Food Transformation Initiative Has Had Varying 
Effects on Food Service Workers: 

Preliminary results indicate that the Food Transformation Initiative 
has had varying effects on the three categories of food service 
workers at the six pilot bases: (1) appropriated fund civilian and 
military cooks in the main dining halls, (2) contract mess attendant 
workers in the main dining halls, and (3) nonappropriated fund 
civilian employees who work in the nonappropriated fund food and 
beverage operations. All civilian employees and military cooks who 
worked in the main dining halls retained their jobs,[Footnote 21] but 
some employees expressed concern to us and their union representatives 
that their job responsibilities under the initiative have increased. 
Although most contract mess attendants retained their jobs, the total 
number of contract mess attendant employees was reduced and some 
employees lost their jobs as a result of the Food Transformation 
Initiative. Finally, most civilian employees at the nonappropriated 
fund food and beverage operations accepted employment with Aramark, 
but their job security remains uncertain because if these operations 
do not become more profitable, they may close. 

Civilian and Military Cooks Retained Their Jobs, but Their 
Responsibilities Increased: 

All appropriated fund civilian employees and military food service 
workers at the main dining halls retained their jobs, but some 
employees expressed concern that they had taken on increased 
responsibilities as a result of the initiative. At the six pilot 
bases, 202 military and 20 civilian employees worked in the main 
dining facilities prior to the implementation of the Food 
Transformation Initiative. These workers were not affected by the Food 
Transformation Initiative contract; they continue to be employed 
directly by the Air Force. According to Air Force officials, the 
workers' primary responsibilities are cooking and serving food. 

During our visits to four of the pilot installations, we spoke with 
small groups of civilian and military food service workers and 
individual workers who were available at the time of our visit and 
agreed to speak with us. In addition, we interviewed civilian union 
representatives about implementation of the initiative at the four 
installations we visited. They raised some concerns about the 
increased workloads of these workers and noted that, prior to the Food 
Transformation Initiative, contract workers performed some of the food 
preparation work, such as chopping vegetables and replenishing the 
salad bar. Since implementation of the initiative, this work has now 
become part of the civilian and military cooks' job responsibilities. 
In addition, because the new menus rely on an increased amount of 
fresh ingredients, there has been an increase in the amount of food 
preparation they must perform. While these tasks were new to the 
civilian and military cooks, according to Air Force officials, they 
should have been performing these tasks prior to implementation of the 
initiative. Contract workers were less affected by these changes 
because, according to Air Force officials, over time, they had taken 
on additional duties that might not have been in their original job 
descriptions. Air Force officials also told us the initiative helped 
clarify the required responsibilities of the civilian and military 
cooks and those of the contract employees. 

In addition, some military food service workers at the installations 
we visited told us that, because of the extended hours and increase in 
number of meals served, there is no down time and they are no longer 
getting to take their lunch time or other breaks. They also said they 
are now expected to do physical training and other required training 
on their own time rather than during work hours as was the case prior 
to the initiative. Some of the military cooks to whom we spoke said 
they are putting in 12-or 13-hour days to keep up with the increased 
workload. They also told us they are feeding many more people than 
prior to implementation of the initiative, but they have the same 
number of people cooking. Aramark officials stated that they are 
continuing to determine the appropriate size of dining facility 
operations, including the number of required labor hours, and will 
make adjustments as more information is gathered. 

Most Contract Mess Attendant Workers Were Retained under the 
Initiative, but Some Workers Lost Their Jobs: 

Most contract mess attendant workers in the main dining facilities at 
the six pilot installations retained their jobs after implementation 
of the Food Transformation Initiative. However, some contract mess 
attendant workers--Ability One workers[Footnote 22] and small business 
employees--lost their jobs as a result of the initiative, and others' 
work hours were reduced. Prior to the initiative, five of the six 
pilot installations used Ability One providers for their mess 
attendant contracts and the other installation contracted with a small 
business to provide mess attendants for its dining halls. According to 
Air Force officials, after implementation of the initiative, Aramark 
hired some Ability One workers to provide mess attendant services at 
the sixth installation in place of the small business employees. 

Following implementation of the initiative, the five installations 
continued to use Ability One workers as mess attendants through 
subcontracts between Aramark and Ability One providers. However, 
although many of the Ability One workers retained their jobs, the 
total number of workers was reduced at four of the five installations. 
According to Air Force officials, the five pilot installations that 
initially employed Ability One workers had 273 of these workers prior 
to the initiative. As of March 2011, the number of Ability One workers 
at these five installations decreased to 233 (see table 6). According 
to Air Force officials, 72 Ability One workers initially lost their 
jobs as a result of the Food Transformation Initiative. However, they 
noted that, after the initial layoffs, 32 new Ability One workers were 
hired at the five bases as Aramark adjusted staffing levels at the 
main dining facilities. The officials could not tell us, however, 
whether any of the 32 new Ability One workers hired were among the 72 
workers who initially lost their positions after implementation of the 
initiative. 

Table 6: Number of Ability One Workers before and after the Food 
Transformation Initiative: 

Air Force base: Elmendorf; 
Number of Ability One workers as of October 1, 2010: 47; 
Number of Ability One workers terminated as a result of the Food 
Transformation Initiative: 21; 
Number of new Ability One workers hired from October 2010 to March 31, 
2011: 0; 
Number of Ability One workers as of March 31, 2011: 26. 

Air Force base: Little Rock; 
Number of Ability One workers as of October 1, 2010: 63; 
Number of Ability One workers terminated as a result of the Food 
Transformation Initiative: 26; 
Number of new Ability One workers hired from October 2010 to March 31, 
2011: 1; 
Number of Ability One workers as of March 31, 2011: 38. 

Air Force base: MacDill; 
Number of Ability One workers as of October 1, 2010: 49; 
Number of Ability One workers terminated as a result of the Food 
Transformation Initiative: 2; 
Number of new Ability One workers hired from October 2010 to March 31, 
2011: 10; 
Number of Ability One workers as of March 31, 2011: 57. 

Air Force base: Patrick; 
Number of Ability One workers as of October 1, 2010: 47; 
Number of Ability One workers terminated as a result of the Food 
Transformation Initiative: 6; 
Number of new Ability One workers hired from October 2010 to March 31, 
2011: 16; 
Number of Ability One workers as of March 31, 2011: 57. 

Air Force base: Travis; 
Number of Ability One workers as of October 1, 2010: 67; 
Number of Ability One workers terminated as a result of the Food 
Transformation Initiative: 17; 
Number of new Ability One workers hired from October 2010 to March 31, 
2011: 5; 
Number of Ability One workers as of March 31, 2011: 55. 

Air Force base: Total; 
Number of Ability One workers as of October 1, 2010: 273; 
Number of Ability One workers terminated as a result of the Food 
Transformation Initiative: 72; 
Number of new Ability One workers hired from October 2010 to March 31, 
2011: 32; 
Number of Ability One workers as of March 31, 2011: 233. 

Source: GAO analysis of Air Force data. 

[End of table] 

In addition, a representative from NISH, one of the central nonprofit 
agencies that facilitates the Ability One program, reported that the 
work hours of many of those who retained their jobs were reduced. 
Aramark officials noted that the hours of many contract employees were 
reduced as the company worked to achieve the staffing levels it deemed 
appropriate as it gained experience under the new contract. 

Prior to the initiative, one of the pilot installations, Fairchild Air 
Force Base, contracted with a small business to provide services at 
its main dining facility. According to officials, because the Air 
Force requires that installations under the Food Transformation 
Initiative obtain mess attendant services for their main dining 
facilities through contracts with Ability One, as of March 1, 2010, 
Ability One took over the mess attendant services contract at 
Fairchild Air Force Base. According to Air Force officials and Aramark 
officials, prior to implementation of the Food Transformation 
Initiative, 41 workers employed by the small business contractor 
worked in the installation's main dining facility. As a result of the 
initiative, 17 of these workers lost their jobs. According to Aramark 
officials, the remaining 24 workers will be retained until September 
30, 2011, to provide services such as cashiering and cooking and they 
will maintain the contract with the small business contractor until 
that time. Subsequently, Aramark may attempt to directly hire some of 
these workers as cashiers since, according to Air Force officials, the 
Air Force does not require Aramark to contract with Ability One for 
cashier services. 

Most Former Nonappropriated Fund Food and Beverage Operation Workers 
Accepted Jobs with Aramark: 

Most of the civilian employees at the former nonappropriated fund food 
and beverage operations at the six pilot installations accepted jobs 
with Aramark. However, the future of these facilities is uncertain, 
and therefore the job security of these workers is uncertain. Prior to 
implementation of the initiative, a combination of regular and 
flexible civilian food operation workers were employed at the 
nonappropriated fund food and beverage operations at each of the six 
pilot installations: 117 regular and 183 flexible workers.[Footnote 
23] As shown in table 7, most of these workers accepted jobs with 
Aramark. According to Air Force officials, most of these workers now 
receive higher pay and are eligible for increased benefits through 
their employment with Aramark. For example, flexible workers who did 
not receive any benefits while employed by the nonappropriated fund 
instrumentality are now eligible for benefits. However, according to 
Air Force officials, both regular and flexible workers employed by 
Aramark may opt to receive an additional $3.50 more per hour in lieu 
of benefits, and 187 workers accepted the higher pay rather than 
receiving benefits. 

Table 7: Number of Former Nonappropriated Fund Food and Beverage 
Operation Employees Who Accepted Positions with Aramark: 

Air Force base: Elmendorf; 
Type of employee: Regular; 
Number of former employees: 13; 
Number who accepted position with Aramark: 9. 

Air Force base: Elmendorf; 
Type of employee: Flexible; 
Number of former employees: 14; 
Number who accepted position with Aramark: 6. 

Air Force base: Fairchild; 
Type of employee: Regular; 
Number of former employees: 2; 
Number who accepted position with Aramark: 1. 

Air Force base: Fairchild; 
Type of employee: Flexible; 
Number of former employees: 17; 
Number who accepted position with Aramark: 11. 

Air Force base: Little Rock; 
Type of employee: Regular; 
Number of former employees: 11; 
Number who accepted position with Aramark: 8. 

Air Force base: Little Rock; 
Type of employee: Flexible; 
Number of former employees: 27; 
Number who accepted position with Aramark: 18. 

Air Force base: MacDill; 
Type of employee: Regular; 
Number of former employees: 26; 
Number who accepted position with Aramark: 23. 

Air Force base: MacDill; 
Type of employee: Flexible; 
Number of former employees: 47; 
Number who accepted position with Aramark: 31. 

Air Force base: Patrick; 
Type of employee: Regular; 
Number of former employees: 34; 
Number who accepted position with Aramark: 32. 

Air Force base: Patrick; 
Type of employee: Flexible; 
Number of former employees: 42; 
Number who accepted position with Aramark: 31. 

Air Force base: Travis; 
Type of employee: Regular; 
Number of former employees: 31; 
Number who accepted position with Aramark: 27. 

Air Force base: Travis; 
Type of employee: Flexible; 
Number of former employees: 36; 
Number who accepted position with Aramark: 27. 

Air Force base: Total; 
Type of employee: Regular; 
Number of former employees: 117; 
Number who accepted position with Aramark: 100. 

Type of employee: Flexible; 
Number of former employees: 183; 
Number who accepted position with Aramark: 124. 

Source: Air Force. 

[End of table] 

Regular workers who had worked at the nonappropriated fund food and 
beverage operations for at least 1 year of continuous service were 
generally eligible for severance pay; flexible workers were not. 
According to Air Force officials, a regular worker could accept 
employment with Aramark and also receive severance pay. According to 
documents provided by the Air Force, of the 300 former nonappropriated 
fund food operation employees, severance payments were authorized and 
paid to 102 workers at the six pilot installations for a total of over 
$750,000. 

In some cases, regular workers with the nonappropriated fund food and 
beverage operations were earning credit towards federal 
nonappropriated fund retirement benefits. Under employment with 
Aramark, these workers will not have access to the same retirement 
system. However, not all former nonappropriated fund food and beverage 
operation workers were enrolled in the nonappropriated fund retirement 
system. According to Air Force officials, enrollment in the retirement 
system is not automatic and many workers opt not to enroll because of 
the additional deduction from their paychecks. However, officials 
further stated that workers who had enrolled in the system and then 
took jobs with Aramark could either defer their retirement benefits or 
have their contributions returned to them, depending on their age and 
length of service. Table 8 shows the number of workers at the six 
pilot installations' nonappropriated fund food and beverage operations 
who were identified as eligible for and were enrolled in the 
nonappropriated fund retirement system prior to implementation of the 
initiative. 

Table 8: Employees Eligible for and Enrolled in the Nonappropriated 
Fund Retirement System: 

Air Force base: Elmendorf; 
Number of eligible employees: 13; 
Number enrolled in retirement system: 5. 

Air Force base: Fairchild; 
Number of eligible employees: 2; 
Number enrolled in retirement system: 0. 

Air Force base: Little Rock; 
Number of eligible employees: 11; 
Number enrolled in retirement system: 1. 

Air Force base: MacDill; 
Number of eligible employees: 26; 
Number enrolled in retirement system: 23. 

Air Force base: Patrick; 
Number of eligible employees: 35; 
Number enrolled in retirement system: 24. 

Air Force base: Travis; 
Number of eligible employees: 31; 
Number enrolled in retirement system: 25. 

Air Force base: Total; 
Number of eligible employees: 118; 
Number enrolled in retirement system: 78. 

Source: GAO analysis of Air Force data. 

Note: Eligibility was identified by the Air Force. 

[End of table] 

Air Force officials also stated that, because many of the 
nonappropriated fund food and beverage operations were losing money, 
the Air Force may not have been able to keep some of them open and 
running. For example, in 2007, 14 employees from nonappropriated fund 
food and beverage operations at Elmendorf Air Force Base were laid off 
because the operations were losing money. According to Air Force 
officials, if the Food Transformation Initiative had not been 
implemented at the six pilot installations, more workers might have 
lost their jobs. Aramark officials stated that they were making 
changes to these operations and hope to increase efficiencies; 
however, they expressed concern about keeping all of the facilities 
open in the future. Employees with whom we spoke at the installations 
also expressed concern about the possibility of losing their jobs in 
the future. 

The Air Force's Food Transformation Analysis of Alternatives Was 
Limited, and Other Options for Achieving Cost Savings May Be Available: 

The analysis the Air Force conducted for selecting its Food 
Transformation Initiative model was very limited in the options it 
considered. The Air Force included three options in its business case 
analysis, but did not follow its own guidance for identifying and 
assessing alternatives that would meet the program's stated 
objectives. In preparing its business case analysis, the Air Force 
considered alternatives that were not feasible ways of satisfying its 
objectives and did not consider other alternatives that may have been 
feasible options. The Air Force officials who prepared the analysis 
stated that they were unaware of the guidance and that, due to the 
limited time they had to conduct the analysis, they did not explore 
additional alternatives when it became apparent that two of the 
options under consideration were not feasible ways of satisfying the 
objectives. Moreover, the Air Force may have opportunities for 
reducing costs at all of its installations using methods it did not 
consider as part of its business case analysis for the pilot program. 

Some Alternatives the Air Force Considered Were Not Viable, and It Did 
Not Consider All Alternatives: 

Air Force guidance on business case analysis procedures calls for the 
inclusion of feasible alternatives to satisfy the objectives and 
suggests that all feasible alternatives should be considered. Where an 
alternative was considered but dismissed as infeasible, the guidance 
directs a discussion of the reasons for considering it infeasible. 
[Footnote 24] Further, best practices for preparing business case 
analyses, such as those described in the GAO Cost Estimating and 
Assessment Guide,[Footnote 25] state that all meaningful alternatives 
should be presented and analyzed in a consistent manner. However, the 
Air Force considered, and included in its business case analysis, 
alternatives that were not feasible methods of satisfying the 
objectives and did not consider other alternatives that were feasible. 

The Air Force Services Agency prepared and presented a business case 
analysis in October 2008 with three alternatives to the Air Force 
Smart Operations for the 21st Century[Footnote 26] office, which 
provided start-up funding for the Food Transformation Initiative. 
However, two of the alternatives considered were not viable options 
because they did not satisfy all eight objectives of the program. 

The first alternative presented was to close four dining facilities at 
selected Air Force installations and put all eligible airmen stationed 
at these installations on basic allowance for subsistence.[Footnote 
27] According to the business case analysis, this option would 
potentially save money by reducing facility and contract costs, even 
with the additional expense of providing basic allowance for 
subsistence funds to airmen. Our review of this option found that it 
was not viable because it would meet only three of the Air Force's 
eight objectives for improving food service: maintaining home station 
and warfighting feeding capability, improving program efficiency, and 
reducing costs. This option would not have satisfied the remaining 
five objectives: enhancing food quality, focusing on airmen's changing 
needs, enhancing sense of community, improving programs and 
facilities, and providing enhanced nutritious meals. 

The second alternative presented in the business case analysis was to 
close the four dining facilities presented in the first option, 
centralize the dining facility contracts at the other installations, 
and replace the food service contract workers with nonappropriated 
fund employees. Also, the Air Force would develop "hybrid" food venues 
where airmen could use their meal cards to eat at locations other than 
the main dining facilities. This option would save the same facility 
and contract costs as the first option and further reduce contract 
costs by eliminating the food service contracts at the bases and 
having the Air Force operate the dining facilities. The Air Force 
estimated that this option would have a 43 percent return on 
investment. The Air Force has operated some of its main dining 
facilities using nonappropriated fund employees at other bases, 
including Seymour Johnson Air Force Base in North Carolina. However, 
similar to the first alternative, we found that this option also was 
not viable in that it would meet only three of the eight objectives: 
maintaining home station and warfighting feeding capability, improving 
program efficiency, and reducing costs. Further, this option could be 
inconsistent with a DOD policy providing that nonappropriated fund 
instrumentalities shall not enter into contracts or agreements with 
DOD elements for the provision of goods and services that will result 
in the loss of jobs created under Ability One, Randolph-Sheppard, or 
small business programs.[Footnote 28] However, Air Force officials 
stated that they may have been able to obtain a waiver of this policy 
if this option had been selected.[Footnote 29] 

The third alternative considered was to close the four dining 
facilities and develop hybrid dining facilities to be managed by a 
third-party food service contractor. This option was basically the 
same as option two, but with a food service contractor taking over the 
facilities rather than having them being run directly by personnel 
from the nonappropriated fund instrumentality. The Air Force found 
that this option would save the most money with a 108 percent return 
on investment and would also meet all of its eight objectives. 
Therefore, this is the option that was chosen. 

In developing the business case analysis, Air Force officials told us 
they had discussed at least one other potential alternative, but they 
dismissed the idea as too difficult and did not include it in the 
business case analysis. This option was to form a large 
nonappropriated fund instrumentality, similar to the Army Air Force 
Exchange Service, to run food service facilities at Air Force bases. 

Air Force officials also told us that they would have included more 
alternatives in the business case analysis, but they did not have 
enough time. Due to the time constraints imposed by the Air Force 
Smart Operations for the 21st Century office on the Air Force Services 
agency, they had a very limited time--approximately 2 to 3 weeks--to 
complete the analysis. Because one of the purposes of a business case 
analysis is to provide financial justification for an investment 
decision, it is important to follow guidance and best practices in its 
preparation. However, even though the Air Force has specific guidance 
on how to prepare a business case analysis, Air Force officials told 
us that they were unaware of this guidance as it was not included in 
the specific instructions from the Air Force Smart Operations for the 
21st Century program. 

The Air Force May Have Other Options for Meeting Its Objective to 
Reduce Costs throughout Its Food Service System: 

Using lessons learned from the implementation of the Food 
Transformation Initiative, the Air Force may have additional 
opportunities to meet its objective to reduce costs throughout its 
food service system. To determine the impact of the initiative on 
labor requirements and costs, we compared the estimated amount of food 
service labor for which the Air Force contracted at the six pilot 
installations prior to the initiative to the amount for which Aramark 
planned to contract under the initiative. We found that, even with 
expanded hours of operation and anticipated increases in the number of 
meals served, Aramark significantly reduced the number of hours for 
contract mess attendant labor it needed at the pilot installations. 

According to Air Force and Aramark officials, most of the cost savings 
under the Food Transformation Initiative resulted from reducing labor 
hours at the main dining facilities.[Footnote 30] Prior to the 
initiative, the food service contracts at all six pilot installations 
were fixed-price contracts, according to Air Force officials, 
including for labor costs.[Footnote 31] Officials added that, prior to 
implementation of the initiative, the Air Force did not actually know 
or closely monitor the number of labor hours required to provide food 
services. However, we obtained documentation from the installations, 
including memoranda showing how the prices were negotiated and 
contractor price proposals that estimated the number of labor hours 
for these contracts. Although these documents do not contain the 
precise number of labor hours for the main dining facilities, they 
provided the best estimates of labor costs available. We compared the 
estimated labor hours for these prior food service contracts to those 
presented in the contractor's projected work schedules for the Food 
Transformation Initiative contract and found that the total number of 
labor hours at five of the six pilot installations had been reduced by 
53 percent. For example, at Travis Air Force Base, the number of labor 
hours for the mess attendant contract had been reduced by more than 
half--from approximately 2,042 hours per week to 920 hours per week. 
At Elmendorf Air Force Base, labor hours had been reduced from 
approximately 1,350 hours per week to 588 hours per week.[Footnote 32] 
Table 9 shows the change in the number of labor hours at all six pilot 
installations. 

Table 9: Comparison of Labor Hours under Previous Contract to Labor 
Hours under the Food Transformation Initiative Contract: 

Air Force base: Elmendorf; 
Estimated weekly labor hours under the previous contract: 1,350; 
Estimated weekly labor hours under the new contract: 588. 

Air Force base: Fairchild; 
Estimated weekly labor hours under the previous contract: 979; 
Estimated weekly labor hours under the new contract: 476. 

Air Force base: Little Rock; 
Estimated weekly labor hours under the previous contract: 1,548; 
Estimated weekly labor hours under the new contract: 303. 

Air Force base: MacDill; 
Estimated weekly labor hours under the previous contract: 1,201; 
Estimated weekly labor hours under the new contract: 1,063. 

Air Force base: Patrick; 
Estimated weekly labor hours under the previous contract: 1,218; 
Estimated weekly labor hours under the new contract: 1,349. 

Air Force base: Travis; 
Estimated weekly labor hours under the previous contract: 2,042; 
Estimated weekly labor hours under the new contract: 920. 

Air Force base: Total; 
Estimated weekly labor hours under the previous contract: 8,338; 
Estimated weekly labor hours under the new contract: 4,699. 

Source: GAO analysis of Air Force data. 

[End of table] 

Patrick Air Force Base was the only pilot base where the labor hours 
were not reduced and the only one of the pilot installations where the 
previous food service contract had recently been audited. The results 
of that audit, conducted by the Air Force Audit Agency in 2009, showed 
that the food service personnel did not align the contract workload 
estimates with actual meals served. Specifically, meal counts were 
overstated, resulting in the installation paying more for contracted 
food services than necessary. As a result of this audit, in October 
2009, Patrick Air Force Base renegotiated its workload estimates and 
pay rates, resulting in savings of approximately $77,000 annually. 

The Air Force may have opportunities to reduce its food service costs 
at Air Force installations that are not part of the Food 
Transformation Initiative pilot by reviewing and, where and when 
feasible, renegotiating its current food service contracts to adjust 
the labor costs. Air Force officials told us that they did not 
previously consider this option because they did not realize how 
poorly their food service contracts were structured. Although 
renegotiating the existing food service contracts would not meet all 
of the objectives of the Food Transformation Initiative, given the 
large number of food service contracts within the Air Force, and the 
length of time it may take to implement the Food Transformation 
Initiative at all remaining Air Force installations in the United 
States, the Air Force may be able to achieve significant savings prior 
to expanding the initiative. Throughout our site visits, at which Air 
Force officials accompanied us, we discussed this potential 
opportunity for savings. As a result, the Air Force recently issued a 
memorandum to the Major Commands directing a review of existing food 
service contracts to determine if the contracts meet current mission 
needs. For example, the memorandum indicates that special attention 
must be given to whether the food service contract workload estimates 
were properly aligned with the actual number of meals served. We 
believe that this is a good first step towards addressing this issue, 
but it is important for the Air Force to continue to monitor this 
process and continue to take actions in this area, where appropriate. 

Conclusions: 

The Air Force is in the process of developing an approach for 
assessing the results of the Food Transformation Initiative, but has 
not yet developed well-defined metrics that are clearly linked to the 
objectives of the initiative and adequately described in an evaluation 
plan to assess the results of the initiative at the pilot 
installations and make informed decisions about the initiative's 
future. Because the Air Force had not yet implemented the campus 
dining concept at the six installations in the pilot at the time of 
our review, it did not have the information available to assess the 
results of this key part of the initiative to make any adjustments 
that may be needed before expanding the initiative to other Air Force 
installations. In addition, until the Air Force reevaluates the actual 
number of hours its military personnel can provide the contractor, the 
cost savings generated by the initiative will not be clear. Finally, 
by reviewing the actual labor costs of its current contracts at Air 
Force installations that are not part of the pilot, the Air Force may 
have opportunities to reduce its food service costs prior to expanding 
the Food Transformation Initiative. 

Recommendations for Executive Action: 

Before implementing the Food Transformation Initiative at other Air 
Force installations, we recommend that the Secretary of the Air Force 
direct the Air Force Services Agency to take the following three 
actions: 

* Develop an evaluation plan to accurately and reliably assess the 
results of the pilot phase of the Food Transformation Initiative. This 
evaluation plan should include, at a minimum, well-defined, clear, and 
measurable metrics to use in determining the results of the initiative 
and time frames for collecting data and reporting results. 

* Evaluate the results of the implementation of the campus dining 
concept at the six pilot locations to determine if adjustments are 
needed before expanding the initiative to additional installations. 

* Reevaluate the number of military personnel hours the Air Force can 
provide the contractor for food service, make adjustments where 
possible in projected labor hours, and take into account the increased 
labor costs in revising the cost savings estimates for the future. 

We further recommend that the Secretary of the Air Force monitor the 
actions taken by the Air Force Major Commands in response to the 
recent direction to review food service contracts, and take actions, 
as appropriate, to ensure that cost savings measures are implemented. 

Agency Comments and Our Evaluation: 

In written comments on a draft of this report, DOD stated that it 
concurred with all of our recommendations and that the Air Force is 
already taking steps to implement them. For example, DOD has taken 
action to implement our recommendation that the Secretary of the Air 
Force monitor the actions taken by the Air Force Major Commands to 
review food service contracts, and take actions, as appropriate, to 
ensure that cost savings measures are implemented. In its response, 
DOD stated that each Air Force Major Command has tasked its bases to 
conduct a 100 percent review of existing food service contracts to 
determine if their current contracts require modification to meet 
current mission needs. DOD further noted that it intends to share the 
results of the Air Force's review of its food service labor costs to 
achieve cost savings with the other services. DOD's comments are 
printed in their entirety in appendix II. 

DOD also commented on our discussion of the response rate for the Air 
Force's recent customer satisfaction survey. In our report, we stated 
that the low response rate (17 percent of active duty airmen) for the 
Air Force's annual customer satisfaction survey could bias the data it 
uses to measure the results of the Food Transformation Initiative. DOD 
stated that, according to the contractor who conducted the survey, the 
response rate achieved in the Air Force's customer satisfaction survey 
met and, in most cases, exceeded the response rate that is usually 
achieved for these types of surveys. However, we continue to believe 
that this response rate decreases the likelihood that the survey 
results are representative of the views and characteristics of the 
population. According to the Office of Management and Budget's 
standards for statistical surveys, a nonresponse analysis is 
recommended for surveys with response rates lower than 80 percent to 
determine whether the responses are representative of the surveyed 
population. Conducting a nonresponse analysis would allow the Air 
Force to more confidently rely on the survey results in assessing the 
results of the initiative. 

We are sending copies of this report to appropriate congressional 
committees, the Secretary of Defense, and the Secretary of the Air 
Force. The report is also available at no charge on the GAO website at 
[hyperlink, http://www.gao.gov]. 

If you or your staff have any questions regarding this report, please 
contact me at (202) 512-3863 or moranr@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. GAO staff who made key contributions to 
this report are listed in appendix III. 

Signed by: 

Revae Moran: 
Director, Defense Capabilities and Management: 

List of Committees: 

The Honorable Carl Levin: 
Chairman: 
The Honorable John McCain: 
Ranking Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Daniel Inouye: 
Chairman: 
The Honorable Thad Cochran: 
Ranking Member: 
Subcommittee on Defense: 
Committee on Appropriations United States Senate: 

The Honorable Howard P. McKeon: 
Chairman: 
The Honorable Adam Smith: 
Ranking Member: 
Committee on Armed Services: 
House of Representatives: 

The Honorable C.W. Bill Young: 
Chairman: 
The Honorable Norman D. Dicks: 
Ranking Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
House of Representatives: 

[End of section] 

Appendix I Scope and Methodology: 

To assess the Food Transformation Initiative's objectives and 
performance measures, we reviewed pertinent documentation and 
interviewed Air Force headquarters and Air Force Services Agency 
officials about the initiative's background, goals, and how the 
results of the initiative would be determined. We also reviewed 
Department of Defense (DOD) and Air Force guidance, as well as 
criteria from our previous work, for developing metrics and plans for 
assessing the results of programs such as the initiative. We compared 
principles we derived from this guidance and criteria with the Air 
Force's metrics and assessment plans for the initiative and where 
there were differences we discussed the reasons why with Air Force 
officials. 

To review the Air Force's progress in meeting its objectives for the 
initiative, we collected available quantitative data related to each 
of the initiative's objectives and compared the data before and after 
implementation of the initiative. For example, we obtained and 
reviewed changes in hours of operation of the main dining facilities, 
the menus being used, the number of meals served, and the cost of food 
service contracts. Also, to discuss with installation officials 
changes made under the initiative and progress towards the 
initiative's objectives, we visited four of the six installations 
where the initiative was being piloted--Elmendorf Air Force Base, 
Alaska; Fairchild Air Force Base, Washington; MacDill Air Force Base, 
Florida; and Travis Air Force Base, California. We selected the bases 
to visit to include various geographic locations and other factors. In 
addition, we reviewed the Air Force's customer satisfaction survey 
results on changes in the reported level of airmen satisfaction with 
various aspects of their food service experience. In areas where 
initiative progress to date differed from Air Force plans, such as in 
the timing of the implementation of the campus dining concept and 
changes in labor costs, we discussed with Air Force officials the 
reasons why and the associated impact on measuring the progress of the 
initiative at the pilot installations. In examining the meal count 
data, we looked for anomalies by comparing data month to month. We 
discussed anomalies with knowledgeable officials. As a result, the Air 
Force went through a revalidation process to verify the numbers and 
provided us with corrected data. Therefore, we believe that the meal 
count data we assessed are sufficiently reliable for the purposes of 
this report. To assess the reliability of the customer survey data, we 
discussed the data with knowledgeable officials and examined the 
survey response rate. The survey response rate is low and the Air 
Force did not perform a nonresponse analysis to clarify whether those 
who did not respond to the survey may provide substantively different 
answers than those who did respond. The survey results could be 
interpreted more confidently if a nonresponse analysis was done to 
establish whether or not it is likely that there are any systematic 
biases due to some people being more or less likely to respond to the 
survey. However, we are presenting these data as descriptive 
information that the Air Force is using to measure its progress in 
meeting these objectives and have noted its limitations. 

To document the initiative's impact on the food service employees at 
the pilot bases, we considered the three types of food service 
employees: appropriated fund civilian and military food service 
employees at the main dining halls, contract workers at the main 
dining halls, and nonappropriated fund employees at nonappropriated 
fund food and beverage operations. Specifically, for the civilian and 
military food service employees, we interviewed union representatives 
and groups of food service workers, as well as individual workers, who 
were available to meet with us during our visit about their 
experiences under the initiative, and also spoke to Air Force and 
Aramark officials about how the initiative affected these employees, 
including any changes in employment numbers. For the contract 
employees at the main dining facilities, we obtained and compared the 
number of employees prior to and after the implementation of the 
initiative and also spoke with Air Force, Aramark, and Ability One 
officials about changes under the initiative. Aramark officials stated 
that the numbers represent the number of employees the day Aramark 
took over the contract and accurately reflect the terminations and 
hires since October 1, 2010. However, the contract employee numbers 
cannot be validated since the names of the individuals are not 
available. These are small numbers of employees, and Aramark was able 
to count the number of Ability One workers at the dining halls on the 
first day of the contract. Because these are small numbers of 
employees, we believe there is less possibility for error. Therefore, 
we believe the data are sufficiently reliable for the purpose of this 
report. For the employees at the nonappropriated fund food and 
beverage operations, we obtained and compared the number of employees 
prior to and after the implementation of the initiative and documented 
the employment options taken by these employees after the 
implementation of the initiative. We also interviewed some former 
nonappropriated fund food and beverage operation employees who were 
available to speak with us during our visit to discuss their 
experiences under the initiative and discussed with Air Force 
headquarters and installation officials employee severance payments at 
the bases we visited. 

To assess the Air Force's consideration of alternative approaches for 
transforming its food service program, we reviewed the Air Force 
business case analysis that was used to evaluate alternatives for 
meeting the Air Force's food service improvement objectives. 
Specifically, we discussed the business case analysis process with Air 
Force officials and compared the methodology used in the analysis with 
Air Force guidance for conducting such analyses and with guidance 
contained in the GAO Cost Estimating and Assessment Guide.[Footnote 
33] In areas where the business case analysis did not follow guidance, 
we discussed the reasons why with Air Force officials and also asked 
about options for meeting the Air Force's food service improvement 
objectives that were not included in the analysis. Further, we talked 
with Air Force officials about opportunities for reducing food service 
costs outside of the Food Transformation Initiative. 

We provided a draft of this report to DOD officials for their review 
and incorporated their comments where appropriate. We also provided 
the pertinent factual information contained in this draft to the 
contractor, Aramark, for review and incorporated Aramark's comments as 
appropriate. 

We conducted this performance audit from September 2010 to July 2011, 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Comments from the Department of Defense: 

Office of the Under Secretary of Defense: 
Personnel and Readiness: 
4000 Defense Pentagon: 
Washington, DC 20301-4000: 

July 8, 2011: 

Ms. Revae Moran: 
Acting Director, Defense Capabilities and Management: 
Unites States Government Accountability Office: 
Washington DC 20548: 

Dear Ms. Moran: 

Thank you for the opportunity to comment on GAO Draft Report, GAO-11-
676, "Defense Management: Actions Needed to Improve Management of Air 
Force's Food Transformation Initiative," dated June 9, 2011 (GAO Code 
351536). The Department concurs with the four recommendations and 
appreciates the comprehensive review the GAO conducted on this 
important initiative. The enclosure to this letter outlines the 
actions Air Force is taking in response to the recommendations. 

Of particular note is GAO's recommendation to use lessons learned from 
the Food Transformation Initiative to review and renegotiate current 
food service contracts to adjust labor costs as necessary at all Air 
Force dining facilities, potentially achieving immediate savings prior 
to expanding the initiative. We intend to share this lesson learned 
with the other Services. 

With regard to the annual customer satisfaction survey that Air Force 
will use to measure progress for several Food Transformation 
objectives, it is important to clarify the survey methodology and 
reliability. The CFI Group, a management consulting firm conducts the 
survey and specializes in the application of the American Customer 
Satisfaction Index (ACSI) methodology to individual Air Force program 
objectives. The ACSI, established in 1994, is a uniform, cross-
industry measure of satisfaction with goods and services in a number 
of national industry sectors from transportation and health care to 
hotels and food service. 

CFI group uses the ACSI methodology to identify the causes of 
satisfaction, and relates satisfaction to business performance 
measures. Using CFI Group results. Air Force can identify and improve 
those factors that will improve satisfaction and other measures of 
business performance. ACSI ratings are presented on a 0-100 scale. 
Within the context of the survey results, scores in the 60s are 
characterized as "fine but could use work," the 70s as "good job but
keep working on it - and the 80s as "excellent - keep it up." At the 
program area level, CSI scores in the mid-70s are expected; it is 
unlikely that any program area will achieve a score greater than 85. 
An increase of two points or more is considered significant for 
increased customer satisfaction (and business performance). Therefore, 
the comparison on page 15 between customer satisfaction with several 
criteria for the pilot bases and non pilot bases shows significant 
improvement in customer satisfaction where Food transformation has 
been implemented and Air Force's stated goals for future CFI scores 
are commendable. 

The GAO expresses concern about a low (17 percent) response rate among 
active duty personnel for the recent surveys. In consultation with CFI 
group personnel, we have benchmarked the achieved response rate to 
several surveys conducted by CFI of a similar methodology (i.e., 
"outbound" email invitation with some pre-notification, 
reminder/follow up emails sent, no incentives offered for completion). 
For example, a survey of institutional investors of financial services 
had a 24 percent response rate; account holders at credit unions a 1-8 
percent response rate; businesses and organizations within government 
agencies a 5-20 percent response rate; and subscribers to satellite 
television a 3-5 percent response rate. 

The response rates achieved in the Air Force 2010 Caring for People 
survey meet and in most cases far exceed the rates CFI Group is 
accustomed to seeing in its other client work. For the sample sizes 
used, the confidence intervals around the scores are within 2-3 points 
on the 0 to 100 point reporting scale at the 90 percent level of 
confidence (some programs areas will be higher), which is sufficient 
to identify substantive differences in performance over time and/or 
across various segmentations of the data. 

Thank you again for the excellent review. The professional and 
experienced conduct of you and your staff was exceptional and 
contributed to a very productive study. 

Signed by: 

Robert L. Gordon III: 
Deputy Assistant Secretary of Defense (Military Community and Family 
Policy): 

Enclosure: As stated: 

[End of letter] 

GAO Draft Report Dated June 9, 2011: 
GAO-11-676 (GAO Code 351536): 

"Defense Management: Actions Needed To Improve Management Of Air 
Force's Food Transformation Initiative" 

DoD Comments To The GAO Recommendations: 

Recommendation 1: Before implementing the Food Transformation
Initiative at other Air Force bases, the GAO recommends that the 
Secretary of the Air Force direct the Air Force Services Agency to 
develop an evaluation plan to accurately and reliably assess the 
results of the pilot phase of the Food Transformation Initiative. This 
evaluation plan should include, at a minimum, well-defined, clear, and 
measurable metrics to use in determining the results of the initiative 
and time frames for collecting data and reporting results. 

DoD Response: Concur. Air Force Services will complete the evaluation 
plan, with well defined measureable metrics, in August 2011. There are 
currently measureable metrics for seven of the eight Air Force 
objectives, and work continues on the development of measureable data 
for the eighth objective, "providing a sense of community." Final 
efforts are being made on the Balanced Scorecard and evaluation plan, 
and the completed plan will be in effect well before implementation of 
Food Transformation at the next portfolio of bases. 

Recommendation 2: Before implementing the Food Transformation
Initiative at other Air Force bases, the GAO recommends that the 
Secretary of the Air Force direct the Air Force Services Agency to 
evaluate the results of the implementation of the campus dining 
concept at the six pilot locations to determine if adjustments are 
needed before expanding the initiative to additional bases. 

DoD Response: Concur. The implementation of Campus Dining began June
6, 2011 at Patrick AFB. Implementation of Campus Dining at all six 
pilot bases is scheduled for completion by the end of July 2011. As 
each implementation occurs, Campus Dining will be subject to initial 
and ongoing analysis, with adjustments made as issues are identified. 
The Air Force delayed Campus Dining until an effective method for 
capturing Essential Station Messing (ESM) usage at nonappropriated 
fund (NAF) food service operations could be implemented. The 
requirement to discontinue use of the member's social security account 
number as a means to identify enlisted members on ESM required the 
identification and development of an alternative method of identifying 
ESM members and the meals they consume. Use of the alternate 
identifier on a military member's identification card was pursued, and 
the appropriate software product developed. Air Force is confident 
they can now provide a Campus Dining benefit to enlisted members on
ESM with the level of accountability required. 

Recommendation 3: Before implementing the Food Transformation
Initiative at other Air Force bases, the GAO recommends that the 
Secretary of the Air Force direct the Air Force Services Agency to 
reevaluate the number of military personnel hours the Air Force can 
provide the contractor for food service, make adjustments where 
possible in projected labor hours, and take into account the increased 
labor costs in revising the cost savings estimates for the future. 

AF Response: Concur. The Air Force Services Agency (AFSVA) has tracked 
the availability of military food service manpower since the initial 
implementation of Food Transformation, and this process continues. The 
pilot bases arc currently conducting a 100% revalidation of available 
military manpower for use in a final 4th quarter FYI 1 cost 
projection, and for determining the cost estimate for their food 
service contract for FY12. Applying the lessons learned from the 
initial implementation, additional planning factors for use in 
determining the amount of available military food service manpower 
were sent to each base in the next portfolio and their parent Major 
Command. Once the final manpower estimates are provided to AFSVA, the 
Food Transformation team will contact each base to insure all planning 
factors have been properly considered prior to releasing any due 
diligence data for contract bidder use on the next portfolio. 

Recommendation 4: The GAO recommends that the Secretary of the Air
Force monitor the actions taken by the Air Force Major Commands in 
response to the recent direction to review food service contracts, and 
take actions, as appropriate, to ensure that cost savings measures are 
implemented. 

DoD Response: Concur. On March 28, 2011, the Commander, AFSVA 
requested each Major Command task their bases to conduct a 100% review 
of existing food service, to determine if their current contract 
workload estimates meet current mission needs or if the contract 
requires modification. Results of this review are currently being 
analyzed. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Revae Moran, (202) 512-3863 or moranr@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, key contributors to this 
report were Laura Durland, Assistant Director; Leslie Bharadwaja; Dawn 
Godfrey; Sharon Reid; Joanne Landesman; Carol Petersen; Michael 
Shaughnessy; and Amie Steele. In addition, Michele Fejfar, Kirsten 
Lauber, Brian Lepore, Pat Owens, Cheryl Williams, and William Woods 
provided their expertise and guidance. 

[End of section] 

Footnotes: 

[1] The pilot installations include Elmendorf Air Force Base, Alaska; 
Little Rock Air Force Base, Arkansas; Fairchild Air Force Base, 
Washington; Travis Air Force Base, California; MacDill Air Force Base, 
Florida; and Patrick Air Force Base, Florida. 

[2] In a decision issued August 2, 2010, we denied a bid protest 
concerning the Food Transformation Initiative solicitation. See John 
P. Santry--Designated Employee Agent, B-402827, Aug. 2, 2010, 2010 CPD 
¶ 177. 

[3] The Air Force calls its main dining facilities "mission essential 
feeding facilities," which is also the term used in the contract. We 
use the term main dining facilities to refer to these facilities in 
this report. 

[4] Certain junior enlisted personnel, primarily in grades E1-E4 and 
who are assigned to the dormitory, are usually placed on essential 
station messing. Enlisted personnel on essential station messing 
receive meals in the dining facility by presenting proper 
identification. In this report, we use the term meal card to refer to 
these benefits. 

[5] See S. Rep. No. 111-201, at 115 (2010) (accompanying S. 3454); 
H.R. Rep. No. 111-491 at 264-265 (2010) (accompanying H.R. 5136). 

[6] GAO, GAO Cost Estimating and Assessment Guide: Best Practices for 
Developing and Managing Capital Program Costs, [hyperlink, 
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: March 2009). 

[7] According to the Small Business Administration, a food service 
contractor is considered a small business if its average annual 
receipts are equal to or less than $35.5 million. Information on 
calculating annual receipts is provided in 13 C.F.R. § 121.104(c). 
Prior to November 5, 2010, the threshold for food service contractors 
was $20.5 million. See Small Business Size Standards; Accommodation 
and Food Service Industries, 75 Fed. Reg. 61,604 (Oct. 6, 2010) (to be 
codified at 13 C.F.R. pt. 121). 

[8] The Randolph-Sheppard Act created a vending facility program in 
1936 to provide blind individuals with more job opportunities and to 
encourage their self-support. See Pub. L. No. 74-732 (1936) (codified 
as amended at 20 U.S.C. §§ 107 to 107f). The program trains and 
employs blind individuals to operate vending facilities on federal 
property. Federal law gives blind vendors under the program a priority 
to operate cafeterias on federal property. See 20 U.S.C. § 107d-3(e). 
According to Air Force officials, the Air Force currently has nine 
Randolph-Sheppard Act contractors operating dining facilities. 

[9] The Ability One program, formerly referred to as the Javits-Wagner-
O'Day Act program and codified at 41 U.S.C. §§ 8501 to 8506, provides 
training and employment opportunities for persons who are blind or 
have other severe disabilities through the purchase of products and 
services from nonprofit agencies employing these individuals. If a 
product or service is on the procurement list maintained by the 
Committee for Purchase from People Who Are Blind or Severely Disabled, 
a government entity intending to procure that item or service 
generally must procure it from a qualified nonprofit agency. See § 
8504. Federal Acquisition Regulation provisions implement the program. 
See 48 C.F.R. subpart 8.7. 

[10] The contract contains a Statement of Objectives for each pilot 
location, each of which indicates that Ability One participation is 
not required at nonappropriated fund food and beverage resale 
operation locations but is encouraged. 

[11] The contract and orders under the contract use the terms 
concessionaire or commission rate in describing the nature of the 
contract. 

[12] Nonappropriated fund instrumentalities are organizations that 
typically provide for the morale, welfare, and recreation of 
government officers and employees. Employees of armed forces 
nonappropriated fund instrumentalities are generally not deemed to be 
employees of the United States except as specifically provided by 
statute. 

[13] See GAO, Agency Performance Plans: Examples of Practices That Can 
Improve Usefulness to Decisionmakers, [hyperlink, 
http://www.gao.gov/products/GAO/GGD/AIMD-99-69] (Washington, D.C.: 
Feb. 26, 1999). Although this report focuses on agency plans under the 
Government Performance and Results Act, it presents useful principles 
for measuring program performance. 

[14] For example, although DOD Instruction 5000.02, which includes 
guidance on the acquisition of services, may not directly apply to the 
Food Transformation Initiative, it provides useful information 
concerning considering performance evaluation in the context of 
acquisition planning. See DODI 5000.02, Operation of the Defense 
Acquisition System, enc. 9, § 4(f) (Dec. 8, 2008). Similarly, although 
officials indicated that Air Force guidance regarding performance-
based acquisition of services would not apply in the context of the 
Food Transformation Initiative, the guidance provides principles that 
we believe would be useful in the context of the initiative's 
objectives. See, for example, Air Force Instruction 63-124, 
Performance-Based Services Acquisition (Aug. 1, 2005). 

[15] These objectives are not explicitly provided in the contract, but 
rather are contained in Air Force briefing materials and other 
documents. 

[16] As with the Food Transformation Initiative objectives, these 
metrics were not clearly contained in the initial contract, but rather 
provided to us in written responses to our questions to Air Force 
officials. 

[17] Survey respondents were asked to rank items on a scale of 1 to 
10, with 1 considered poor and 10 considered excellent. These rankings 
were then converted to scores of 0 to 100. 

[18] For example, one of the key performance indicators would require 
a review of customer satisfaction scores in the categories of hours of 
operation, variety, pricing, and overall dining experience. The 
overall rating must exceed a customer satisfaction index of 75 and any 
one survey factor must not fall below a score of 70. Another key 
performance indicator would measure performance against the annual 
budget in reducing contractor nonfood costs per meal. 

[19] The midnight meal is designed to provide food to airmen who work 
overnight shifts and cannot eat at normal designated meal times. 

[20] The contract statement of work lists two categories of patrons 
for the main dining facilities: essential station messing customers, 
to be fully reimbursed by the government as part of the delivery order 
and all other eligible patrons, considered "cash customers." 

[21] During the course of the bid protest on the Food Transformation 
Initiative, the Air Force amended the solicitation to provide that 
appropriated fund wage grade employees would not be "displaced, 
reassigned, subjected to reduction in force, or otherwise adversely 
affected by the implementation of FTI phase I." See John P. Santry-- 
Designated Employee Agent, B-402827, Aug. 2, 2010, 2010 CPD ¶ 177 at 5 
(citing Letter to Offerors, June 30, 2010, ¶1.a). 

[22] We use the term Ability One workers to refer to employees 
participating in the Ability One program through employment by a 
nonprofit agency for the blind or a nonprofit agency for employing 
persons with severe disabilities. 

[23] According to Air Force Manual 34-310, Nonappropriated Fund 
Personnel Management and Administration Procedures (Jan. 19, 2011), 
regular employees are guaranteed a minimum of 20 hours to a maximum of 
40 hours of work per week, and they receive benefits. Flexible 
employees have work schedules that depend on the needs of the 
activity. These employees may work a minimum of zero hours to a 
maximum of 40 hours per week, but do not receive benefits. The version 
of the Manual in existence prior to January 2011 contained the same 
information regarding the two employment categories. See Air Force 
Manual 34-310, Nonappropriated Fund Personnel Program Management and 
Administration Procedures § 1.7 (Dec. 1, 1995) (obsolete). 

[24] Air Force Manual 65-510, Business Case Analysis Procedures (Sept. 
22, 2008). 

[25] [hyperlink, http://www.gao.gov/products/GAO-09-3SP]. 

[26] The Air Force Smart Operations for the 21ST Century program began 
in 2006. Its goal was to integrate improvement and efficiencies into 
Air Force programs. 

[27] Basic allowance for subsistence is a payment designed to defray 
the costs of an eligible servicemember's meals. 

[28] See Memorandum from the Under Secretary of Defense for Personnel 
and Readiness, Limitations on the Use of Contracts and Other 
Agreements with DOD Nonappropriated Fund Instrumentalities (NAFIs) 
Pursuant to 10 U.S.C. 2492 (Dec. 29, 2004). Section 2492 of Title 10 
of the United States Code provides authority for DOD nonappropriated 
fund instrumentalities to enter into contracts or other agreements 
with other DOD elements in certain circumstances. 

[29] The Air Force ultimately requested and received approval for a 
waiver to this policy to implement the Food Transformation Initiative 
by using a nonappropriated fund instrumentality memorandum of 
agreement to provide the installation appropriated fund food service 
mission. See Memorandum from the Under Secretary of Defense for 
Personnel and Readiness, Request for Waiver to OSD Policy (Aug. 4, 
2010). The waiver approval recognized efforts of the Air Force to 
partner with Ability One, use an acquisition strategy requiring right 
of first refusal for qualified small business and nonappropriated fund 
employees as applicable, and omit from the initiative installations 
with existing Randolph-Sheppard Act dining facility contracts. See id. 

[30] Air Force officials told us that additional savings under the 
Food Transformation Initiative come from optimizing the use of 
military personnel in the main dining facilities. 

[31] Generally, under a firm fixed-price contract, the installation 
pays the fixed price even if the actual total cost of the product or 
service--that is, the contractor's cost experience in performing the 
contract--falls short of or exceeds the contract price. See 48 C.F.R. 
§ 16.202-1. 

[32] The labor hours presented here do not include any additional 
labor hours that might be needed because of a lack of available 
military personnel. 

[33] GAO, GAO Cost Estimating and Assessment Guide: Best Practices for 
Developing and Managing Capital Program Costs, [hyperlink, 
http://www.gao.gov/products/GAO-09-3SP] (Washington, D.C.: March 2009). 

[End of section] 

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