State officials have ceased negotiations with the food service vendor proposed for the new Transportation building downtown, citing numerous problems with the company's proposal.
In addition, the secretary of the Finance and Administration Cabinet has asked state auditors to review all state food service contracts following their critical examination of the multi-million-dollar food service proposal for the Transportation building.
State Auditor Ed Hatchett raised concerns last week about the food service contract for the as-yet-unfinished Transportation Cabinet building. Hatchett criticized the state's plans to provide a 9,000 square-foot dining facility to be operated by Acorn Food Services, Inc. with minimal investment.
Auditors found the proposed agreement would have allowed Acorn to operate the building free of rent and utility charges, and with no requirement to share profits with the state.
The deal also required the state to reimburse Acorn up to $1.13 million for equipment purchased. Overall, the deal was worth about $2.4 million. The average meal at the Acorn-run facility would have been less than $4, auditors said.
Hatchett characterized the deal as improperly subsidizing meals for state employees and said it gave Acorn a cost-free opportunity to compete against Frankfort's downtown restaurants.
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