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Herr's Foods no longer selling chips to prisons

| Monday, Nov. 1, 2004

Herr's Foods has supplied potato chips and other snacks to the state prison system on and off for 20 years.

But beginning today, a St. Louis-based company will provide all commissary items -- from chips and pop to shampoo and soap -- to Pennsylvania's 40,000 inmates.

"We weren't even aware the contract went out to bid," said Don Lyle, Pittsburgh regional manager for Chester County-based Herr's Foods. "We were notified by the prisons themselves, and they didn't seem too happy about it."

Lyle, who works out of the Herr's facility in Perryopolis, said the loss of the state contract won't affect employment there. Forty-three full-time and two-part time employees work at Perryopolis. It will, however, affect commissions for some sales representatives.

Lyle said the corrections department decision could cost 20 of his salesmen from $200 to $300 a week apiece. "They're paid on commission," he said. "The amount they could make would vary by prison, depending on what each prison wanted to buy that week."

The Perryopolis facility supplied the state prisons in Hempfield Township in Westmoreland County, Luzurne Township in Fayette County, and Franklin Township in Greene County.

St. Louis-based Keefe Supply Co. is the new supplier, replacing Herr's and numerous other vendors. Keefe's three-year contract is worth about $24 million a year and could be extended for an additional two years, said Sheila Moore, deputy news secretary for the Department of Corrections.

The corrections department sent out a request for proposals to a list of vendors in April 2003, Moore said.

She acknowledged that some current vendors, including Herr's, were left off that list. Some vendors were solicited by the state; other companies sent in proposals after learning of the state's request.

"We couldn't send it out to every little potato chip vendor because we knew they wouldn't have the capability to provide what we wanted," Moore said.

The corrections department sought one company to provide all commissary items, she said. "No one else could offer us what Keefe offers."

The list of vendors that received requests for proposals includes only one company based in Pennsylvania: Covenco Inc., of Dauphin County. Moore did not have information on vendors that sent proposals independently after seeing it advertised in the RFP Bulletin, a trade publication.

Keefe provides toiletries and snacks to commissaries at prisons in 25 states, and has been around since 1975, according to spokeswoman Katie Ashcroft. Keefe's parent company, St. Louis-based Centric Group, boasts annual sales at its eight subsidiaries of more than $500 million, according to its Web site.

An Internet search on Keefe shows there have been complaints by inmates, formal and informal, about the company's prices. One Kansas inmate filed a lawsuit against the company in 2003, claiming its high prices constituted "cruel and unusual punishment." The case was dismissed.

Having one company provide commissary items will save taxpayers $2.5 million a year, Moore said, and will increase security at prisons by cutting down on the number of deliveries. At least three state prisons -- in Pittsburgh and in Fayette and Indiana counties -- have been using Keefe for at least the past year, Moore said.

Standardizing commissary items will be more convenient for prisoners, Moore added. "An inmate could start out at a bigger jail, and go to a smaller one and there's less of a selection and different prices. This way, we can offer the same products across the board at all institutions."

Moore said the change to a single vendor is part of Gov. Ed Rendell's pledge to save money by re-examining state contracts for goods and services.

"We had to look at the overall picture of how to save money, look at the bottom line," she said. "We have to run our institutions in the best, most cost-effective manner that will allow us to offer our inmates quality products and services."

State agencies can't limit their contracted services to Pennsylvania companies, Moore said. In fact, said Frank Kane of the state Department of General Services, the state can't even offer preferential treatment to Pennsylvania companies.

On the other hand, Kane pointed out that a contract to supply food to prisons, state hospitals and other state agencies went to W.S. Lee & Sons of Altoona. The three-year contract is valued at $51.4 million and may be extended two additional years. The contract will save taxpayers $13.8 million, Kane said.

The prison commissary contract did not go through the state's general services department, Kane said. It was handled by the corrections department.

Lyle said Herr's Foods would have liked the chance to bid on the contract. He said he and his staff have tried to get some answers from Harrisburg about why they weren't included in the request for proposals.

"The governor's office would give us no information," he said. "They blew us off in Harrisburg. As far as I know, we still haven't heard officially from them."

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