Source: AFSCME Council 5 Stepping Up, Jan/Feb 2010
Workers at Chris Jensen nursing home in Duluth don’t need economists or politicians to tell them what privatization means. Peterson is one of more than 200 caregivers coping with the upheaval St. Louis County created when it sold the nursing home. Under county management, workers had a strong union contract as part of Local 66. On Nov. 1, it all vanished.
Source: By DIANE S. WILLIAMS, Public Employee Press (NY), February 2010
DC 37 leaders blasted a 1,000 percent cost overrun on a computer contract — still unfinished after 12 years — that the city gave to former Giuliani officials with ties to the Bloomberg administration.
They testified Dec. 18 before the City Council Contracts Committee, which is investigating how the $63 million Citytime deal ballooned to $700 million as the city budget went into the red and the mayor laid off employees.
Source: Jeffrey A. Beard & Richard S. Ellers, Corrections Today, October 2009 (not online)
The delivery of health care services in the Pennsylvania Department of Corrections evolved from a decentralized system in the 1970s, during which time institutions contracted with separate local vendors, to a system of separate regional vendors in the 1980s and 1990s.
In 2002, the DOC issues a statewide request for proposal. The belief was that “economics of scale” would result in greater savings for DOC.
…..The lessons learned from the previous unsuccessful contract was that vendors would underbid a request for proposal to secure a contract and then try to recoup additional funding later, or they would inflate their initial bid to protect themselves from unpredictable, catastrophic outpatient expenses.
By Arindrajit Dube and Ethan Kaplan, Industrial & Labor Relations Review, Vol. 63, No. 2 (January 2010), pp. 287-306.
Abstract: Outsourcing of labor services grew substantially during the 1980s and 1990s and was associated with lower wages, fewer benefits, and lower rates of unionization. The authors focus on two occupations for which they can identify outsourcing in those two decades using industry and occupation codes: janitors and guards. Across a wide array of specifications, they find that the outsourcing wage penalty ranged from 4% to 7% for janitors and from 8% to 24% for guards. Their findings on health benefits mirror those on wages. Evidence suggests that the outsourcing penalty was not due to compensating differentials for higher benefits or lower hours, skill differences, or the types of industries that outsourced. Rather, outsourcing seems to have reduced labor market rents for workers, especially for those in the upper half of the occupational wage distribution. Industries with higher historical wage premia were more likely to outsource service work.
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Source: Mary K. Marvel A1 and Howard P. Marvel, Public Performance & Management Review, Issue: Volume 33, Number 2 / December 2009
Local governments that contract out services are faced with a complex problem of developing an appropriate mix of incentives to elicit performance from a diverse set of service providers, including networks of other local governments, mission-driven nonprofit organizations, and profit-maximizing firms. This paper employs agency and stewardship theory to motivate an analysis of rewards and sanctions used in service delivery relationships. Our findings, consistent with principal-agent theory, indicate that a significant proportion of local governments in our sample employ high-powered incentives with for-profit firms.
Source: KPMG, Feb. 2, 2010
…. The survey strongly supports the increased involvement of the private sector, which is likely to help in delivering additional infrastructure more effectively. Increased private sector involvement is not a total solution and the public sector should also bear responsibility for how it leverages the private sector to best add value.
Source: By TONY NAUROTH, The Express-Times (PA), Tuesday, February 23, 2010
After six and a half years working for Sodexo Food and Facilities Management Services at Lafayette College, Genevieve Repsher grew tired of earning $8.25 an hour as a cashier in the Farinon Hall cafeteria.
When she showed interest in organizing fellow workers with Local 32BJ of the Service Employees International Union, she found herself followed, watched, interrogated and disciplined by Sodexo management.
Source: By Debbie Cenziper, Washington Post, Thursday, February 4, 2010; B01
The founder of a city-funded AIDS program that recently closed amid reports of alleged fraud and neglect also operated eight facilities for the mentally ill that were racked for years by similar problems, city officials said.
….. Unlike the HIV/AIDS Administration, which awarded more than $1 million in grants to Hill’s program, the Department of Mental Health provided no money. Instead, with a license from the agency, Hill drew fees for room and board from her clients’ Social Security payments and other public benefits.
Source: David W. Miller, ProQuest Discovery Guides, February 2010
After summarizing the historical chronology of privatized prisons in part I, this Discovery Guide conducts a comparative analysis between public and private prisons in part II. This comparative analysis highlights differences in cost-savings, recidivism rates, and prison culture in relation to level and degree of violence in public versus private prisons.
Concluding remarks will suggest what role the private correctional system can play in the future to assist states in decreasing costs.