Starting next year, Yale’s dining halls will no longer be run by an external food-service company, ending an arrangement that has been criticized by students and union leaders for a decade.

University officials decided in June not to renew their contract with Philadelphia-based Aramark when it expires on Jan. 1, 2008. Yale’s residential and retail facilities will return to in-house management beginning in the spring semester, after 10 years under Aramark management.

Administrators said they decided not to renew the contract because they believe Yale Dining Services can now manage the University’s food operations on its own, not because of any major problems with Aramark. But some said the University’s relationship with Aramark has hampered dining halls from running smoothly and led to a downturn in food quality.

The University first told Aramark that its contract would not be renewed on June 19, said Ernst Huff, associate vice president for student financial and administrative services. Aramark was hired in 1997 to improve quality and cost-effectiveness at the then-inadequate Dining Services. With those goals now met, the need for outside management has disappeared, Huff said.

“Dining Services had reached a level of customer satisfaction and fundamental stability, in some part due to Aramark’s management,” Huff said. “We’ve just reached a point where we can now move on without necessarily having a large corporation as a partner.”

Aramark’s practice of frequently transferring dining hall managers among the 12 colleges also contributed to the University’s decision, said Shauna King, vice president for finance and administration. Bob Proto, president of Local 35, the union that represents dining hall workers, said the continual changes in management disrupted the team-oriented environment needed to run a dining hall effectively.

Students should not notice many changes when Aramark leaves the University, as the menu — retooled just last year — will remain mostly untouched, Huff said. Dining Services does plan to improve food quality in certain areas, he said, but the Yale Sustainable Food Project, an in-house program that has expanded significantly in its four years of existence, will not see any changes this year. The University will increase YSFP offerings as resources become available, he said.

Dining Services also hopes to retain Aramark-employed dining hall managers as Yale employees. Karen Culter, director of communications for Aramark, said managers will be able to choose between the two employers, enabling them to stay at Yale after the contract ends or continue with Aramark elsewhere.

Huff praised Aramark for bringing a sense of accountability to individual dining hall managers, as well as for increased efficiency in food purchasing. A customer satisfaction survey, first developed by Aramark and brought to Yale nine years ago, helped Dining Services recognize its successes and problem areas, he said.

But some criticized Aramark’s emphasis on costs. Under its contract with Yale, the company received incentive bonuses for reducing operating costs, up to $50,000 a year. The incentive to spend less hurt both the quality and quantity of food, Proto said.

“It seemed as though they were more worried about achieving a bottom line as it related to their profit,” he said of Aramark. “They tried at different turns to undermine the quality of food. They cut very close the quantity of food that they ordered and caused us to have certain shortages.”

As part of the changes, Yale will hire a new executive director for Dining Services, a post now held by an Aramark employee. A nationwide search is ongoing.