Auditor Gives Green Light to Privatization: Follett to Manage Store Starting July 1 Daniel J. Fitzgibbons CHRONICLE STAFF June 16, 2000 The takeover of the University Store and Textbook Annex by a private firm cleared its last hurdle earlier this month when state auditor Joseph DeNucci approved the campus's contract with the Follett Higher Education Group. Under the five-year deal, Follett will assume management of the store and textbook operation on July 1. Shortly after DeNucci's report was issued on June 1, Follett representatives visited the University Store and met with campus officials and store staff. A human resources official from Follett is also expected to visit campus soon and meet individually with store staffers, who are being given the option of joining the company or remaining campus employees. Follett has not yet named a manager for the store. The privatization plan was submitted to DeNucci as required by a state law that calls for a review of any proposal to contract out more than $100,000 worth of services provided by state employees. The auditor must certify that the proposal will result in a cost savings to the agency while retaining equal or better services. According to DeNucci's 18-page report, the University will save more than $1.3 million over the term of the five-year contract. In addition, the auditor determined that the campus will realize more than $879,000 through the life of the Follett contract. The store currently operates at an annual loss of about $90,000. University officials had predicted an additional savings of $1.6 million in renovation costs, utilities and other expenses, but DeNucci rejected those figures citing different interpretations of costs and contract language. Specifically, DeNucci said the University's proposal conformed with state law provisions regarding wages paid by the contractor, health insurance requirements and job protection for employees affected by the contract. The agreement, he noted, requires Follett to offer employment to qualified regular store employees. It also allows the 27 regular staff to remain campus employees or join Follett at their current salary and years of service for calculating vacation and sick leave and disability insurance. "The University has an opportunity to realize cost savings under this initiative while at the same time protecting the jobs of bookstore employees," said DeNucci in a press release that accompanied the report. "My office will continue to monitor the contract to ensure that both UMass and Follett meet their obligations."