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September 24, 2008

Taking It In-house / How two county engineers decide when it's more cost-effective to do their own repairs.

Source: By Michael Fielding, PUBLIC WORKS MAGAZINE, September 1, 2008

Kevin Beachy has been overseeing the bridge replacement program for Alleghany County, Md., since 1985, when the county--located in Maryland's panhandle three hours west of Baltimore--adopted a different approach to rehabilitation and replacement. .........

..........In just two decades, however, the county has cut in half the number of bridges posted at load restrictions (it is at 28%, down from 60%) by contracting out large projects and keeping the smaller, more manageable projects in-house--all without a dedicated bridge crew. Considering that both light and heavy manufacturing equipment as well as coal mining trucks travel the county's 550 miles of roads, that's quite a feat.

New website: Outsourcing News

Here you will find the latest news and developments in outsourcing throughout the United States and around the world, presented in an easily accessed and understandable format, with a couple of characters -- Buck Stevenson and Pirate Captain Mad Dog -- to entertain and guide you along the way. News stories, reports, videos, on-line polls, and much more are presented and regularly updated on Outsourcing-News.org.

Unison report exposes true cost of privatization in the UK


Source: CUPE, September 19, 2008 10:56 AM

'The Rise of the Public Service Industry,' a report released by UNISON (CUPE's sister union in the UK) has important lessons for Canada. It documents the consequences for government and taxpayers of relying on private companies to finance and provide public services."The union is calling on Government to ditch its fair-weather friends in big business and call a halt to damaging privatisation, " said UNISON president Dave Prentis.

September 12, 2008

Prison food vendor pulls out

Source: By Steve Bousquet, St Petersburg Times (FL), Wednesday, September 10, 2008 5:36 PM


Food service vendor Aramark soon will cut ties with Florida prisons, bringing to an end another privatization venture begun when Jeb Bush was governor. Hired in 2001 to replace a state-run food system, the company, often criticized by the state for cutting corners and maximizing profits, said it will stop serving meals Jan. 9. That leaves the cash-strapped prison system four months to find a new way to deliver food to the nation's third-largest prison population, which has more than 92,000 inmates.

........ The company cited "unprecedented" inflation in food costs and a poor working relationship with the state.

...... A review last year by the prisons' inspector general found that Aramark earned a "windfall" because it was allowed to serve cheaper ground turkey instead of real beef, and was paid based on the number of inmates, and not on the actual number of meals served. The report urged a rewriting of the contract or restoring food service to an in-house operation.

U.S. says no to Interstate 80 tolls / Rendell: Privatize turnpike or face crisis

Source: By Tom Barnes, Post-Gazette (PA), Friday, September 12, 2008


The federal government's rejection yesterday of a plan to put tolls on Interstate 80 means Pennsylvania is facing a transportation "crisis," and heightens the need for the Legislature to quickly approve a private bid to operate the Pennsylvania Turnpike, Gov. Ed Rendell said.

Mr. Rendell said yesterday he doesn't think the $12.8 billion lease offer from a consortium of New York-based Citigroup and the Spanish firm Abertis "will stay on the table past Jan. 1. It would be playing Russian roulette for the Legislature not to act [this fall] on the Abertis proposal."

September 11, 2008

Refugees explain problems getting aid

Source: Associated Press (IN), September 9, 2008

Myanmar refugees who are struggling to get benefits such as food stamps and Medicaid are asking congressional staffers for help. Refugees met this weekend to tell their stories to Senate Foreign Relations Committee senior staffer Keith Luse and Cathy Gallmeyer, director of Republican Sen. Richard Lugar's northeast Indiana office.

....... Some Burmese refugees have blamed delays in receiving aid on changes to the state's welfare eligibility system that were implemented in the Fort Wayne area in May.

Gov., Madigan talk about leasing lottery

Source: ABC Local (IL), Tuesday, September 09, 2008 | 6:34 PM

The Illinois House will begin a special session on its capital bill- which would build new roads and bridges- on Wednesday. At issue- how to pay for the multi-billion dollar bill. House Speaker Michael Madigan is going to propose a plan this week that puts terms on Governor Blagojevich's plan to lease the lottery. Illinois Democrats are under intense pressure- particularly from organized labor- to get a capital spending plan in place as soon as possible. It now appears the warring factions are close to an agreement on how to finance the lion's share of the $25 billion price tag.

Trends In the Region: Akron Seeks Sewer Lease;

Source: Caitlin Devitt, The Bond Buyer (OH), September 10, 2008 Wednesday


The fate of Akron, Ohio, Mayor Donald Plusquellic's controversial plan to lease the city's sewer system and use the proceeds for a local university scholarship fund will be decided by voters after opponents forced the proposal onto the November ballot.The move delays Akron's fast-tracked effort to solicit bids this month and close the first-of-its-kind transaction by the end of the year. City officials instead will launch a campaign urging voters to approve the proposal - apparently marking the first time a city has put a specific privatization proposal before voters.

........ Opposition to the plan is being led by the 100 sewer system employees, represented by the Akron American Federation of State, County, and Municipal Employees Union Council 8, as well as the Northeast Ohio American Friends Service Committee, a Quaker organization.

Outsourcing issue still divides Boeing, Machinists union

Source: By Dominic Gates, Seattle Times, September 10, 2008


A resolution of the Machinists strike at Boeing may rest finally upon one perennial issue: the outsourcing of Machinist work now done in local plants. The union's ambition isn't to scrap the global-manufacturing model Boeing established with the new 787 Dreamliner, in which huge sections of the aircraft are completed overseas and elsewhere in this country. Boeing appears irrevocably committed to that strategic model, and the union can do little about it.

Auditor says Office Depot overcharged state

Source: By Mark Johnson, News Observer (NC), September 10, 2008

Office Depot overcharged state agencies by nearly $300,000 last year, according to a state auditor's report released today and confirmed by the N.C. Department of Administration. The embarrassing overpayment, which has been recovered, comes two years after an administrative law judge ruled that the department improperly awarded Office Depot the state's office supplies contract. The judge ruled the department could have saved $1.8 million by giving the contract to the lowest bidder, Colorado-based Corporate Express.

The department opted to rebid the contract and again awarded it to Office Depot, though at a lower price. The judge in that case, a lawsuit brought by Corporate Express, also criticized Accenture, the consulting firm hired by the state to set up the contract selection process. Accenture failed to disclose that Office Depot was one of its clients. Office Depot paid Accenture $30 million over the preceding three years for software and merchandising help.

Audit: FEMA wasted millions on no-bid contracts

Source: By HOPE YEN, Associated Press, September 10, 2008

The government wasted millions of dollars on four no-bid contracts it handed out for Hurricane Katrina work, including paying $20 million for a camp for evacuees that was never inspected and proved to be unusable, investigators say.

A report by the Homeland Security Department's office of inspector general, obtained Wednesday by The Associated Press, is the latest to detail mismanagement in the multibillion-dollar Katrina hurricane recovery effort, which investigators have said wasted at least $1 billion.

September 9, 2008

EMT petition drive continues

Source: by Mark J. Bonamo, Hackensack Chronicle (NJ), September 04, 2008


A group of nearly 40 supporters of the eight Hackensack emergency medical technicians (EMTs) to be laid off on Sept. 14 protested outside Hackensack University Medical Center (HUMC) last Thursday while continuing a petition drive meant to roll back the city's privatization of emergency medical services.

Daniels still wants more from lottery / Governor's bond-issue plan raises questions

Source: Peter Schnitzler, Indianapolis Business Journal (IN), Sat. September 06 - 2008


Republican Gov. Mitch Daniels' first attempt to raise $1 billion or more by privatizing the Hoosier Lottery failed in 2007 when Democrats in the Indiana House of Representatives balked. Now, Daniels is building his campaign for re-election in part on another attempt to cash in a huge lottery jackpot.

This time, he's hedging his bet. In case leasing the Hoosier Lottery outright to a private operator is politically impossible, Daniels is exploring a major bond issue backed by its future revenue. But experts on gambling and finance say the plan remains fraught with uncertainty. For either scenario to be successful, they say, the state would need to substantially increase lottery profits, which have been running between $210 million and $220 million a year.

Library may not fill spots

Source: By NICHOLAS BEADLE, Jackson Sun (TN), September 9, 2008


........ The Library Board will meet next week and discuss a plan to eliminate a $110,000 funding gap that could likely include layoffs of some of the library's about 20 full-time equivalent employees.

....... Richard Salmons, the library's director, said it's possible that not all of the openings will be filled.

......... Despite the shortfall, Library Systems and Services, the private company that manages the Jackson facilities, wants to hire a professional librarian into one of the open positions, said Steve Coffman, a company vice president for public library operations. McIntyre and Rucker said they do not have graduate degrees in library sciences.

September 8, 2008

What happens when the city leases public assets to private investors? You pay a lot more

Source: By Susan Chandler, Chicago Tribune, September 7, 2008

........ The privatization of public assets has sparked a debate among academics and urban officials across the country about whether the leasing of bridges, roads and other infrastructure is a smart way to manage public resources over the long haul or just a desperate quick fix. Because the phenomenon is so new, less has been said about what happens to consumers when they go from being taxpayers using public facilities to customers of a for-profit business. It turns out they pay a lot more.

In the early years, price hikes by new owners are usually fixed and modest, experts say, but over the years, owners generally have more latitude to raise prices: Tolls go up, parking rates rise and the cost of using an airport takes off. In Australia, for example, parking revenue at the nation's five major private airports has soared 77 percent since 2002, even though passenger counts only rose 41 percent.


Drawing the Line between Public and Private Responsibility in Child Welfare: The Texas Debate

Source: CPPP, September 4, 2008

Protecting children and strengthening families is difficult, complicated work. Doing it well requires successfully engaging the entire community--both the public and private sectors. In this report, we explore the issues raised by how a state draws the line between public and private responsibility, and we make specific policy recommendations. The report compares Texas to the two states that have most completely privatized, Kansas and Florida.

Turning the Lottery Loose

Source: By JONATHAN WALTERS, Governing, September 2008

There are plenty of ways for states to pull more revenue out of their games. All of them face substantial political hurdles.

With Virginia struggling to pay for such pressing priorities as transportation and education and the legislature exhibiting its traditional lack of appetite for raising taxes, David Poisson, a Democratic member of the House of Delegates, thinks he knows where to find some easy money. There is gold, he says, to be mined in the state's lagging lottery. If the state would cut the lottery loose to perform to its maximum potential, Poisson thinks it could rake in far more than its flat-line gross revenues of about $1.3 billion in each of the past three years.

But to get the lottery there, Poisson also believes that some entity other than the state needs to be running the games. One idea is to let the private sector -- with its proven record of running casinos and other commercial gambling operations -- lease the lottery in return for $4 billion to $7 billion in up-front cash. Another is simply to turn the management of the lottery over to a private company to maximize revenues, an approach that Poisson figures would add about 50 percent to the $450 million or so that the lottery has been contributing annually to K-12 education over the past few years.

The Continuing Cost of Privatization: Extra Payments to Medicare Advantage

Source: B. Biles, E. Adrion, S. Guterman, The Commonwealth Fund, September 2008


The Medicare Modernization Act of 2003 explicitly increased Medicare payments to private Medicare Advantage (MA) plans. As a result, every MA plan in the nation is paid more for its enrollees than they would have been expected to cost in traditional fee-for-service Medicare. The authors calculate that payments to MA plans in 2008 will be 12.4 percent greater than the corresponding costs in traditional Medicare--an average increase of $986 per MA plan enrollee, for a total of more than $8.5 billion. Over the five-year period 2004-2008, extra payments to MA plans are estimated to have totaled nearly $33 billion. Although Congress recently enacted modest reductions in MA plan payments, these changes will not take effect until 2010. Moreover, while the new legislation removes a few factors contributing to the extra payments, a number of other factors remain unaffected.
Citation

September 5, 2008

Social Embeddedness in Outsourcing: What Shapes Public Managers' Perceptions?

Source: Mary K. Feeney and Craig R. Smith, Public Performance & Management Review (subscription req.), Volume 31, Number 4 / June 2008


Abstract:

As public agencies become increasingly familiar with outsourcing public services, public managers face the challenge of building and maintaining contract management capacity while balancing the demands of external actors, including, but not limited to, contractors, executives, legislators, and clients. Although a great deal of recent research examines contract management capacity in the public sector, few studies have investigated consultants' and public managers' perceptions of one another. Here, within a long-term research project working to build contract management capacity at the Georgia Department of Transportation (GDOT), we draw from in-depth interviews with private consultants to develop and test a model and hypotheses about how public managers' previous work experiences, communication patterns in working relations, and professional and social activities affect their perceptions of outsourcing and consultants. We outline a full model of the relationships between past experiences, perceptions, trust, and relational governance; however, the analysis presented here focuses on the antecedents of public managers' perceptions of contractors and contracting. We test the model and hypotheses with data from a 2003 survey of GDOT managers' perceptions. Our analysis highlights the importance of social mechanisms in creating positive perceptions among public managers. Our findings contribute to the literature on contract management capacity and our understanding of how public agencies can use public management theory, evaluations, and consultant feedback to understand managerial perceptions.

September 3, 2008

Open Letter to the Presidential Candidates

Source: Paul C. Light, Huffington Post, Posted June 25, 2008 | 09:55 PM (EST)

...... Improve oversight of the huge workforce of contractors that now delivers goods and services on behalf of the federal bureaucracy. Presidents and Congress have moved millions of jobs to an estimated contract workforce of more than 7.6 million employees, or three contractors for every federal employee.

The number of contractors has grown by 70 percent since 2002, mostly through contracts that have been awarded without competition. Title V of the McCain-Obama Act would strengthen government's bargaining position by requiring competitive bidding on at least 80 percent of all federal contracts. It would also stop the revolving door between government and contract firms by imposing a five-year ban on lobbying by former presidential appointees and senior civil servants.

Ind. agency wants to move lawsuit to federal court


Source: Associated Press (IN), 09.02.08, 6:18 PM ET

Indiana's human services agency is seeking to move to federal court a lawsuit that would block the state from extending changes in welfare eligibility screening to 13 northern counties. The Family and Social Services Administration filed the motion Tuesday in U.S. District Court in South Bend, agency spokeswoman Lauren Auld said. The agency did not yet know if its motion had been granted.

...... The suit contends that FSSA has not adequately told welfare clients that they still have a right to face-to-face interviews with state case workers despite the addition of telephone call centers, Web interfaces and other automation in seeking and recertifying eligibility for benefits.

September 2, 2008

Ohio city sues CH2M Hill over 'sweetheart deal'

Source: By BRAD KANE, Naples News (OH), 8:25 p.m., Sunday, August 31, 2008


The corporation that Bonita Springs has contracted with to provide its community development services has been sued in an Ohio court for an alleged sweetheart deal it had with a city on Lake Erie. The city of East Cleveland has filed a $14 million lawsuit in Cuyahoga County Common Pleas Court against the local and global offices of CH2M Hill as well as the city's former mayor and a local businessman over a contract to provide utility services. Bonita Springs, which contracts out most of its governmental services, in a controversial move switched its community development contract from Lee County to CH2M Hill on June 30.

..... In the East Cleveland lawsuit, the city is suing because the mayor urged its City Council to sign a contract that eventually paid CH2M Hill $3.9 million to provide Water Department services that the city provided for $1.4 million.

Port Jervis again considers option to privatize school transport

Source: By Stephen Sacco, Times Herald-Record (NY), August 30, 2008

The newly elected Board of Education has reopened the option of privatizing the school district's transportation system. The board has gotten bids for an attorney who could advise the district on labor issues that surround privatization.

....... Of concern are the jobs of roughly 250 CSEA union members who work for the district, the majority of them bus drivers, said Betty Kranz, a union representative and district bus driver.