Anatomy of a Government Outsource

Source: ban48, Daily Kos, September 22, 2013

…I came across SafeBuilt, a company that specializes in outsourcing building inspection departments from local governments. One of their posterboys of success is the city of Troy, Michigan….

…First a little bit on Safebuilt. It isn’t rocket science what they do: You fire your building inspectors, they hire them, they sell you their service. All of the expertise they boast of is yours that you threw away, so when you read about their seasoned vets, well, you know. Anyway, they also claim to have saved Troy millions, which is at-first curious because how do you save millions on people reviewing building plans and checking construction sites…???

Oh, it turns out that part is easy – they fired 2/3 of them. Safebuilt took Troy’s building inspection unit of 22 full-time city employees and retained only 8. Ok, no real rocket science here on the savings. Now, number of inspections hasn’t gone down. It did dip during the recession but has since returned to pre-recession levels. So you have 8 people doing the work of 22. Again, no rocket science. But this isn’t the fun part.

The fun part is when you examine the cost. Troy’s building inspection budget slowly rose from 2002 to 2010 (when the outsourcing occurred) from just over $80k per person to just over $90k per-person. That is about a 12% rise over 8 years. Understand that this is budget, not take-home pay, so it includes payroll taxes, benefits, all that good stuff….