Risk Factors in IT Public–Private Partnership Projects

Source: Souhir Ghribi, Pierre-André Hudon, Bachir Mazouz, Public Works Management & Policy, OnlineFirst, February 12, 2019
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From the abstract:
Project managers from both the public and private sectors have always known that better project management is often synonymous with better risk management. As such, all projects are subject to risk factors that make their management more or less complicated. In this article, we contend that successful project managers need tools to better identify and assess project risks and we try to provide such a tool in the form of grid of specific risk factors. This article analyzes risk factors in IT projects conducted using public–private partnership (PPP) procurement from the public partner’s perspective. Our research uses, as empirical case studies, three projects undertaken by the Tunisian government in partnership with IT and engineering companies. The results reveal 13 specific risk factors, which are classified into three generic risk factor categories: strategic, operational, and key resources. The adverse effects of risks materializing are also identified and analyzed.

State public-private partnership (P3) legislation and P3 project implementation: An exploratory investigation

Source: Lawrence L. Martin, The Journal of Public Procurement (JOPP), Vol. 19 no. 1, 2019
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From the abstract:
This exploratory study aims to look at the policy and public-procurement requirements set forth in state public-private partnership (P3) legislation and their relationship to P3 project implementation.

The research uses both cross-sectional and longitudinal approaches. The paper begins by defining P3s and discussing their increasing importance as a form of private-sector delivery of public facilities and infrastructure. The major policy and procurement requirements of state P3 legislation are then identified. Using the public works financing database of 301 P3 project closures between 1996 and 2016, the relationships between state P3 legislative policy and procurement requirements and P3 project implementation are explored.

The study finds positive associations between 15 of 16 state P3 legislative policy and procurement requirements.

This is the first study of its kinds to explore the relationships between state P3 policy and procurement requirements and P3 project implementation (project closures).

Private Prisons and Investment Risks, Part Two: How Private Prison Companies Fuel Mass Incarceration—and How Public Pension Funds Are at Risk

Source: American Federation of Teachers, 2019

From the press release:
The American Federation of Teachers is urging public pension funds with more than $3 trillion of deferred wages under management to review their holdings in the wake of a new report exposing how retirement funds are at risk through investments in private prisons that profit from mass incarceration.

“Private Prisons and Investment Risks, Part Two: How Private Prison Companies Fuel Mass Incarceration—and How Public Pension Funds Are at Risk” was released Tuesday by the AFT with the support of 35 other organizations including the Journey for Justice Alliance. The report reveals the direct and indirect investments public pension funds have in CoreCivic and GEO Group, which reap billions each year by jailing minority populations and exploiting the school-to-prison pipeline. The state pension funds named in the report currently hold over $75 million in private prison stock.

The report features a “watch list” of the private equity firms that own for-profit companies that provide services to detention facilities. And it reveals how pension funds may be backing companies that put public employees out of a job by funding firms that benefit from privatization. Private equity firms have significant investments in for-profit corrections companies, and many retirees are exposed through these funds or via direct shareholdings.

The report urges pension trustees to examine their portfolios for exposure to CoreCivic and GEO Group, and to consult the watch list when making future asset allocation decisions. Both firms’ bottom lines stand to be affected by the bipartisan passage in December of the criminal justice bill, which added to the political, legal and financial pressure on the prison industrial complex.

Part One: Private prisons, immigrant detention and investment risks
Source: American Federation of Teachers, 2018

From the summary:
….”Private Prisons, Immigrant Detention and Investment Risks” is part 1 of two special edition reports that the AFT will be issuing to highlight the investment risks to pension funds and other investors whose portfolios contain exposure to the private prison industry or contractors who provide services to immigration detention centers. Since May 2018, when Attorney General Jeff Sessions conveyed plans to prosecute immigrants crossing trhe U.S. Mexican border, making it official U.S. policy to routinely separate children from their parents, AFT pension trustees and members have been inquiring about public pension funds that may be invested in companies that profit from detention facilities that house separated immigrant families and the risks those investments pose to members’ retirement security.

In response the AFT is issuing this two-part report to inform trustees about the top publicly traded companies that are profiting from the detainment of separated families or the incarceration of mass numbers of people—disproportionately people of color—in private prisons. Public pension funds invested in companies identified in this report may hold direct shares, or may have investments through index funds, private equity funds or hedge funds.

Part 1 of this report identifies investment managers, namely hedge fund managers, who invest millions of dollars in companies that profit from private prisons and detention facilities.

Part 2 of this report will identify an expanded list of investment managers who invest in private prison companies that profit more broadly from mass incarceration of communities of color.

Safety violations at UM dining hall mean proposed fines of $134,000 for managing company

Source: David J. Neal, Miami Herald, January 23, 2019

An August inspection of a University of Miami dining hall resulted in $134,880 in proposed fines for three workplace safety violations. And two of the three violations at the Mahoney Pearson Dining Hall were classified as Repeat violations because North Carolina-based Compass Group USA, which runs the dining hall through its Chartwells Dining division, got busted breaking similar rules in Illinois in 2014. Of 20 workplace inspections nationally since 2014, according to OSHA.gov, Compass has been fined nine times. The biggest before this was $38,000 for failures at Canteen Vending Services in Bloomingdale, Illinois. …


Chartwells to Open Tossed Unit at University of Miami
Source: Food Management, November 3, 2014
Deal with Compass is part of chain’s strategy to expand in the onsite dining market.

Compass Group/Chartwells has signed a franchise agreement with the Tossed restaurant concept that offers design your own salads, wraps, sandwiches, melts and other menu items…. The self-contained unit will feature the chain’s new stand-alone prototype design, which includes soothing, contemporary and nature-inspired colors with a cool contemporary look. Tossed anticipates opening in Miami’s Whitten Hall in late December in time for the students’ return the first week of January.

Kelly calls for 300 more workers to fix ‘cluster-mess’ KanCare application center

Source: Kansas City Star, January 18, 2019

Kansas Gov. Laura Kelly’s first proposed budget calls for hiring 313 additional state workers at a beleaguered Medicaid application center to take over some functions that were privatized by then-Gov. Sam Brownback. The KanCare Clearinghouse in Topeka has been a target of criticism from legislators, nursing home advocates and other groups since Brownback established it in 2015 and contracted with a Virginia-based company called Maximus to run it. Under Maximus, a backlog of Medicaid applications ballooned into the thousands, leaving nursing homes to wait months or even years for compensation. Some had to stop taking in people whose applications were still pending, leaving them to search elsewhere for a bed. …


Colyer: Kansas Will Pursue Medicaid Work Rules Despite Court Ruling
Source: Jim McLean, Salina Post, July 3, 2018
Kansas Gov. Jeff Colyer says he will continue to push for a Medicaid work requirement despite a recent court order blocking a similar policy in Kentucky. Last week, U.S. District Judge James Boasberg, an Obama appointee in the District of Columbia, questioned whether the Trump administration had adequately considered the consequences of Kentucky’s work requirement before reversing longstanding federal policy to approve it.  Despite the setback, Colyer said his administration will continue discussions with federal officials about requiring some of the more than 420,000 Kansans enrolled in KanCare, the state’s privatized Medicaid program, to work or pursue job training. …

Kansas chooses 3 companies to manage Medicaid
Source: Associated Press, June 22, 2018
The Kansas Department of Health and Environment has awarded new contracts to three insurance companies to manage the state’s privatized Medicaid program.  Two of the new contracts announced Friday are renewals for companies currently in the program, Sunflower State Health Plan Inc. and United Healthcare Midwest Inc. The Lawrence Journal-World reported that the third contract went to a company new to the program, Aetna Better Health of Kansas Inc….

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Foster care bill amendment stirs House division, debate

Source: David Beard, The Dominion Post, January 30, 2019

The House of Delegates sailed through passage of several healthcare- and child welfare-related bills on Wednesday, Jan. 30, but divided on and debated at length an amendment to the foster care bill. The foster care bill is HB 2010. It proposes to allow the Department of Health and Human Resources to contract out foster care to managed care organizations and has been contentious all legislative session. …

After High-Profile A Line Troubles, RTD Plans To Operate N Line Itself

Source: Colorado Public Radio, January 24, 2019

Before construction started on the Regional Transportation District’s N Line in 2014, most of the agency’s senior leadership thought that the private contractor building, maintaining and operating RTD’s other commuter rail lines — the A, B and G lines — should operate the new line to Thornton as well. … In the intervening years, the A, B and G Lines — collectively known as the EAGLE Project — have been beset by delays, dramatic breakdowns, lawsuits, and operational issues that put passengers at risk. While the A Line has been running smoother in recent years — 97 percent of trains are on time, RTD says — the transit agency has decided not to farm out operations to Denver Transit Partners. …

Are charter school building leases fleecing Ohio taxpayers?

Source: Jim Siegel, The Columbus Dispatch, January 21, 2019

For-profit management companies are receiving rents from the Ohio charter schools they operate that are significantly higher than rents of comparable buildings in the same area, according to a report released by former state auditor Dave Yost. Cincinnati charter school Orion Academy paid $867,000 more to lease its facilities in 2016 than what was paid for comparable buildings in the area, according to a recent state auditor’s report. In 2015, Cleveland-based Harvard Avenue Performance Academy paid about $516,000 above market value for its facilities. That taxpayer money went to subsidiaries of the schools’ for-profit management companies, National Heritage Academies and Imagine Schools. Imagine became non-profit in mid-2015, and the numbers account for only one year of multiyear leases. The payments were highlighted by former state Auditor Dave Yost who, in one of his last acts before switching offices to become Ohio attorney general, issued a 30-page, public-interest report examining problems with the way charter schools obtain and pay for their facilities. …

Read full report.

Editorial: Consumers paid, then paid again

Source: Lexington Herald Leader, January 27, 2019

Five years ago, the private Kentucky American Water quit including local government fees on water bills then used the resulting revenue loss to justify charging Lexington households and businesses more for water. It still galls that the public had to pay twice — once because it cost $700,000 a year more to outsource sewer and other billing to the Cincinnati Water Works, and again when the water company used its annual loss of $1.59 million from canceling the city contract to argue for a rate increase, an argument accepted by the Kentucky Public Service Commission. The city recently brought the billing home, in hopes of eventually saving $400,000 a year. The transition to in-house billing also created six customer service jobs in Lexington. It appears to be a smart move by Mayor Jim Gray’s administration. The city has paid the increased billing costs out of fees paid by consumers. That’s millions of dollars that could have gone into upgrading sanitary sewers, controlling flooding and supporting recycling if Kentucky American had not ended the billing agreement. Most cities never face such a problem because most water utilities are owned by the public. …

How One Company Is Making Millions Off Trump’s War on the Poor

Source: Tracie McMillan, Mother Jones, January/February 2019

President Trump plans to make the poor work for Medicaid and food stamps. That’s extremely punitive for them—but highly lucrative for companies like Maximus. ….

…. Missing from the debate—perhaps because there’s hardly been any reporting on the subject—is the fact that work requirements are also a profit center for a rapidly growing private industry. Exhibit A is Maximus, the company that helps run HIP and the bureaucracy that stands between Sue and insurance. Business processing behemoths like Hewlett-Packard and IBM often run the minutiae of public-benefit paperwork and accounting. Local nonprofits sometimes contract for services like job training and case management. But Maximus does it all, holding contracts for everything from job training to child support enforcement to health care enrollment. In a 2014 business presentation, the company claimed to have a hand in the cases of roughly 59 percent of America’s Medicaid clients. ….

…. As workfare programs began to sprout up nationwide, Maximus capitalized on the doublespeak. The big payoff came when Clinton signed welfare reform into law with the Personal Responsibility and Work Opportunity Recon­ciliation Act in 1996. Welfare agencies told clients to start looking for employment if they wanted to keep cash assistance; if they couldn’t find a job, the state would try to give them work to do. Sue, then a young, single mother, first went on welfare that year.

The following year, Maximus went public, posted rev­enue of $128 million, and told investors that far greater profits were to be found in the social safety net. In its annual report, Maximus laid out its targets: 6.5 million people on Supplemental Security Income (which goes mostly to people with disabilities), requiring $2 billion in administrative spending a year, and 28 million people on food stamps at $3.7 billion in overhead. Between those, plus Medicaid, welfare, disability assistance, and child support, Maximus was eyeing a $21 billion market serving about 100 million people. …