Student Stores Outsourcing
After careful consideration, and with unanimous recommendation from the 13-member RFP Advisory Committee, we have reached a decision in the UNC Student Stores outsourcing process: As part of a 10-year, $30 million agreement, the UNC Student Stores management, except for the Pharmacy and the Print Stop, is going to be outsourced to Barnes & Noble College, effective July 1, 2016.
Every one of our full-time UNC Student Stores staff members will still have a job. Some staff will shift over to the Finance and Administration Service Center of Excellence; Print Stop employees will stay in their current jobs at UNC-Chapel Hill; and the rest will be offered full-time positions at their current salary with Barnes & Noble College, with a guaranteed three-year employment.
Read the UNC-Chapel Hill news release for more information.
Read the Fact Sheet for details about the partnership with Barnes & Noble College.
The Student Stores RFP Advisory Committee met for a total of 12 hours on March 30 and 31, during which they listened to presentations by seven different bidders, including one from the current UNC Student Store management.
The presentations were from Barnes & Noble, Follett, and UNC Student Store management for the management of the entire store; and from Akademos, Amazon, eCampus and MBS for the textbook-only portion of the management of UNC Student Stores.The presentations were focused on the qualitative and service aspects emphasized in the RFP: fair treatment of existing employees; affordability of course materials for students; preservation of academic quality; enhancing the UNC brand; customer satisfaction through innovation and cutting-edge retail “Premier” services; and increased financial contributions to student scholarships.
Based on the planned timeline, the evaluation process activities are on track. The next step in the process is due diligence activities on the bids and bidders. With help from CBC Consulting, this activity may take four to six weeks. The Committee members have been asked to maintain confidentiality to ensure integrity of the process.
Student Stores RFP Advisory Committee
Office of Human Resources
- Linc Butler – Associate Vice Chancellor, Office of Human Resources
- Winston Crisp – Vice Chancellor, Student Affairs
- Harry Edwards – Chief of Staff to President, Student Body
- Houston Lee Summers – President, Student Body
- Mike Freeman – Director, Auxiliary Services
- Lloyd Kramer – Professor, History and Director, Humanities and Human Values
- Beverly Taylor – Chair, English and Comparative Literature
- Shirley Ort – Associate Provost and Director, Scholarships and Student Aid
- Barron Matherly – Assistant Provost for Finance
Finance and Administration
- Mike Patil – Executive Director, Carolina Counts
- Brad Ives – Associate Vice Chancellor, Campus Enterprises
- Katie Turner – Communications & Public Relations Committee Chair, Employee Forum
- Charles Streeter – Chair, Employee Forum
Role of the Committee
The Student Stores RFP Advisory Committee’s role is to evaluate pertinent proposal materials along with the presentations that will be made by bidders for management of the Student Stores or the textbook operations, as applicable. The committee will be asked to share views on the pros and cons of each proposal. While the Committee will not recommend a specific course of action or a specific bidder, their views will inform Finance and Administration’s decision-making process.
Role of Campus Bookstore Consulting Corporation (CBC)
Campus Bookstore Consulting is a well-known and highly respected independent consulting company. They specialize in higher education institutional bookstore business: assessment, bidding process, bid evaluation and contract negotiation. Tom Byrne from CBC will run our bid evaluation process. He also will serve as the moderator for the RFP Advisory Committee’s discussions of the bids and will record the conclusions of the committee for use by Finance and Administration.
Committee Evaluation Process:
- The committee will meet a couple of times to discuss the overall process, their roles and responsibilities, and CBC analysis and evaluation of the bids.
- In late March the committee will hear from three bidders for full management of the Student Stores (including current Store management) and from five bidders for online sales of textbooks.
- Tom Byrne from CBC will prepare a summary of the discussions, which will contain the committee’s view of the pros and cons of each proposal. CBC will present those findings to Finance and Administration leadership in early April.
Under applicable law and regulations, the University is authorized to keep sensitive business information confidential during an evaluation and negotiation process that ultimately results in a final contract. Such provisions promote maximum competition, which, in turn, protects the best interests of North Carolina taxpayers. Our selection criteria for this project are not based solely on the financial terms. Our objective is to carefully balance funding more need-based scholarships, keeping textbook prices affordable, and treating employees fairly. At the end of the process, we will release all proposals consistent with the North Carolina Public Records Act.
The University issued a “Request for Proposals,” or RFP, Jan. 11, 2016, to invite outside companies to submit proposals for management of the operations of UNC Student Stores under a time-limited arrangement with the University.
The University will make a determination on whether to outsource UNC Student Stores by spring 2016. If a decision is made to outsource, a transfer of operations would occur sometime in early July 2016.
No decision has been made on whether outsourcing is best for UNC Student Stores. The University will form a Student Stores RFP Advisory Committee to assist with evaluating bookstore management service proposals. This includes providing input to the University regarding the qualitative aspects of proposals and proposal presentations. The final decisions regarding outsourcing UNC Student Stores, proposal selection, and/or a potential business model change rest solely with the University.
UNC-Chapel Hill is evaluating whether to outsource the operations of the UNC Student Stores to a third party or to continue self-operation. The University began this process in September 2015 after receiving an unsolicited bid for outsourcing in the late summer.
The University has operated UNC Student Stores for 100 years. The Stores currently sell approximately $25 million worth of books, computers, apparel and other merchandise through the physical store on campus, a small satellite facility at the Friday Center and online. In the most recent fiscal year, the Stores had net proceeds of approximately $400,000, which are used to support student scholarships. The Stores employ 49 full-time staff and a large number of students and temporary employees.
The climate for sustaining a revenue-producing operation has changed significantly in the past 10 years. Top-line revenue for the Student Stores has declined by more than 15 percent since 2007-2008 and has been flat for the last five years. Total sales figures have dropped from $29.2 million in 2006 to $25 million in 2015. In addition, the textbook and trade book (Bull’s Head Bookshop) businesses face an uncertain future due to the rise of digital books and online shopping. In fact, the Bull’s Head has lost money for more than 15 straight years, and sales are down from $1.7 million in 2006-2007 to $700,000 in 2014-2015. As a result of the overall declining sales and margins, contributions to scholarships are inconsistent from year to year. This inconsistency, combined with the rising cost of attending UNC-Chapel Hill, mean that the Student Stores are not keeping pace with the growing need for scholarship funds.
Our Vision for UNC Student Stores
- To provide outstanding products and services to the University community while generating funds for need-based scholarships.
- To be an iconic campus destination.
- To be a state-of-the-art, cutting-edge collegiate store, which is innovative and nimble in an ever-changing marketplace.
What is Outsourcing?
To outsource would be to contract with an outside company to manage the operations of UNC Student Stores under a time-limited arrangement with the University. Outsourcing would not involve selling the Student Stores or the building. The Stores would continue to look and feel like a University-owned and -operated facility. Other campus operations that have been outsourced include Carolina Dining Services and The Carolina Inn.
Why Consider Outsourcing?
- To increase funding for need-based scholarships by increasing sales at the Student Stores.
- To take the University out of the business of managing the challenges of declining textbook and independent bookstore (trade books) sales.
- To return the Bull’s Head Bookshop (the trade books store) to profitability after more than 15 years of losses, while continuing to carry faculty and local books and hosting author events.
- To leverage the resources of a national market-leading store design and operational expertise team.
- No decision has been made on whether outsourcing is best for UNC Student Stores. Any decision will be made through a thoughtful and deliberate process based on many factors including the ability to significantly increase contributions to need-based scholarships and improve service for the campus community, as well as careful consideration of our current full-time employees and student employees.
- Prior to any outsourcing, some current employees may be offered other positions within Finance and Administration’s new Service Center of Excellence. Our RFP will require all proposals to provide a detailed plan for employee retention.
- During any outsourcing process, we would comply with all state personnel laws regarding employee benefits and pensions.
- The University will require that any increased sales cannot be a result of raising textbook prices, reducing buy-back proceeds or cutting service or selection. Increased sales should be a result of growing sales volume, especially online.
- The University will form a Student Stores RFP Advisory Committee that includes representatives from Student Government, the Employee Forum, the Faculty Council and other areas to ensure that important campus constituencies have a voice in the process to determine whether outsourcing is appropriate.
Process and Timeline
The consideration of outsourcing UNC Student Stores pertains to a revenue-generating endeavor and does not involve the expenditure of University funds. That means our process is not subject to State or University purchasing laws and regulations. However, we have decided to gather relevant information and conduct a competitive process by inviting proposals in a manner similar to that of issuing a “Request for Proposals” or RFP.
The University plans to issue the RFP in early January in order to make a determination on whether to outsource in spring 2016. If a decision is made to outsource UNC Student Stores, a transfer of operations would occur sometime in early July 2016. A link to the RFP will be provided on this page when the RFP is issued.
|RFP Issue Date||Jan. 11, 2016|
|Site Visits||Jan. 20, 2016|
|Proposals Due||Feb. 18, 2016|
|Review of Proposals by UNC||February / March 2016|
|Presentations by Contractors||March 2016|
|Negotiations / Finalize Contracts(s), if a Contract Management Firm and/or a Virtual Course Materials Provider selected||March / April 2016|
|Contract Begins, if a Contract Management Firm and/or a Virtual Course Materials Provider has been selected||July 1, 2016|
The national consulting firm Campus Bookstore Consulting Corporation (CBC) has been engaged to assist with facilitating the competitive proposal process and to serve as a resource for University administrators and the Student Stores RFP Advisory Committee as they review proposals.
UNC will consider two business models (or a combination of them) in evaluating proposals.
- On-Campus Full-Service Bookstore: A third-party company will provide comprehensive on-campus course materials services, emblematic merchandise, school supplies, technology products/Computer Store and Carolina Computing Initiative, Bull’s Head Bookshop, convenience products, Coffee Shop, Post Office, Print Stop, etc.
- Virtual Course Materials Store: An On-Campus Course Materials Storefront/Kiosk component will provide customer service, order pick-up, refunds, etc., for all UNC Programs (e.g., undergraduate, graduate, professional, etc.).
Student Stores management will also be invited to submit its business plans or proposals for one or both of the business model options. Student Stores also may submit creative alternatives to be considered along with third-party businesses.
The Student Stores RFP Advisory Committee role will be to assist the UNC Administration with evaluating bookstore management services and Business Model Options. Specifically the Committee will:
- Assist with analyzing proposals submitted to the University
- Attend vendor presentations
- Provide input to the UNC Administration regarding the qualitative aspects of proposals and vendor presentations, including the Student Stores business plan and presentation.
The final decisions regarding outsourcing UNC Student Stores, proposal selection, and/or a potential business model change rest solely with the University.