Catering Firm Lands 22-year Contract for Food Services at New IDF Training Base

Schulz Group will provide estimated 30,000 meals a day at new army complex near Be’er Sheva. It will only lose contract if subject to persistent complaints about food and service

Eyal Toueg

A single catering company has been awarded the exclusive tender to provide food services for a mammoth new training base being built for the Israel Defense Forces near Be’er Sheva.

The catering business at Ir Habahadim (the Hebrew acronym for The Complex) is no small job. The company awarded the food service contract – the privately owned Schulz Group – is to provide catering services for 10,000 soldiers. Perhaps more importantly for the company, it has been given a 22-year contract, to remain in place unless there are persistent complaints regarding the quality of the food and service the company provides.

The Defense Ministry said the contract was not within its remit, explaining that the agreement with Schulz was entered into by Mabat Lanegev, the consortium that won the contract to build and operate the military training complex.

The Schulz Group currently provides about 100,000 meals to a range of corporate cafeterias and snack bars at major Israeli firms, including Bank Hapoalim, Teva Pharmaceutical Industries, Amdocs, Cellcom cellular and Partner Communications. It has 1,500 employees and annual sales of 350 million shekels ($101 million). The Schulz Group also provided food services for the arrival and departure of U.S. President Barack Obama on his most recent visit to Israel last year.

The catering firm said it expects to generate revenues of 80 million shekels a year from its training complex contract. It is to employ a staff of about 250 people and will have exclusive responsibility for the entire food service operation there, serving an estimated 30,000 meals a day that will be prepared at a kitchen on site. Mabat Lanegev, the company that awarded to contract to Schulz, is a consortium of four companies: Minrav Holdings, the Noy Energy and Investment Fund, Elco’s Electra division, and Bynet Data Communications.

Schulz will also run a food court at a shopping center on the site and have responsibility for leasing space to tenants. One of the firm’s owners, Oren Schulz, said his company also intends to compete for the food business at a major teleprocessing complex that the army is planning in the south in coming years.

The transfer of major military installations to Ir Habahadim, south of Be’er Sheva, is expected to provide a major boost to the region’s economy. It is being built at the Negev Junction on a 1,600 dunam (400 acre) site, and will be comprised of eight separate IDF training bases. The catering facility will cover 16 dunams. “The kitchen will be operated using advanced cooking methods and subject to quality and safety food standards with an emphasis on product quality and service to the soldiers,” said Nir Schulz, another company owner.

Oren Schulz said Minrav proposed his company as its candidate to provide the food services at the training complex. When Minrav and its consortium partners were awarded the contract for building and operating the complex, the selection of the Schulz Group automatically followed. The details of the Schulz Group’s contract have just been finalized. “Everything [has been] subject to the review and final approval of the Defense Ministry,” Oren Schulz added.

The contractual arrangement with the Schulz Group was under review for the past six months by the law firm of Herzog Fox & Neeman, and included consideration of the financial stability and reliability of the food service company.

Oren Schulz said his company would provide a service to the Defense Ministry that is comparable to the one it provides to its high-tech clients, but added: “The menu at Ir Habahadim will be simpler. It’s the army that sets the menu specifications.”