AFSCME Privatization Update

Source: California Progress Report, December 13, 2007

"Privatizing in the Dark: The Pitfalls of Privatization & Why Budget Disclosure is Needed" is our site of the day.

The Progressive States Network (PSN), a national think thank, released a report today addressing the need for legislation to establish greater accountability and transparency in the privatization of state government services.

The 31 page report, entitled Privatizing in the Dark: The Pitfalls of Privatization & Why Budget Disclosure is Needed (.pdf), makes the case for a careful reevaluation of the practice of outsourcing traditionally government-administered public services such as education, transit, prisons, and health care to private corporations. In light of the penchant for Governor Schwarzenegger and California Republicans for privatization who see it as a panacea for budgetary and other problems, this is a timely report for those interested in California public policy.

Posted by Info Center at 12:11 PM in Oversight/Contract Management | Overview/General | Permalink

Source: Congressional Research Service (via Federation of American Scientists), January 26, 2007

This report will examine logistical support contracts for troop support services in Iraq primarily administered through the United States'(U.S.)Army's Logistics Civil Augmentation Program (LOGCAP). LOGCAP is an initiative to manage the use of civilian contractors that perform services in support of DOD missions during times of war and other military mobilizations. It was established on December 6, 1985 with the publication of Army Regulation 700-137.

LOGCAP has been used in a variety of military contingency operations and provides for the awarding of contingency, or bridging contracts, or for the inclusion of contingency clauses in peacetime contracts. LOGCAP contracts have been previously awarded for work in Rwanda, Haiti, Saudi Arabia, Kosovo, Ecuador, Qatar, Italy, southeastern Europe, Bosnia, South Korea, Iraq, and Kuwait. LOGCAP contracts are "costs-plus award fee" contracts, meaning that there is a fee paid based on contract costs, in addition to the potential for incentive fees based on performance. There has been a substantial shift in the types of contracts for troop support services, the size of the contracts, and the apparent lack of effective management control over the administration of the contracts and the oversight of the contractors.

Some observers have noted that costs-plus contracts have characteristics that can make oversight difficult. Others note that the very nature of the types of contracts employed in Iraq, combined with the challenges in contract administration, serve as major factors which make contract administration difficult. Given the size and scope of the contracts in Iraq, and the challenge of managing billions of DOD-appropriated dollars, many have suggested it appropriate to inquire whether these types of contracts can be managed better.

Posted by Info Center at 11:35 AM in Federal | Oversight/Contract Management | Permalink

Source: Diane Carman, The Denver Post (CO), 10/16/2007

...... Here in Colorado, private firms supply everything, even bus drivers and prisons. Former Gov. Bill Owens was a believer in the 11th commandment, so contracts for public services during his terms exploded.

Unfortunately, oversight of those contracts didn't keep pace.

The most glaring example of the mess created by overconfidence in private contractors was the Owens administration's bumbling attempt to modernize state government through random, uncoordinated - and very expensive - information-technology systems.

Eight years and nearly $300 million later, Owens moved on, leaving his successor with a bunch of pricey computer systems that couldn't compute.

Among them:

Posted by Info Center at 1:40 PM in Horror Stories | Oversight/Contract Management | Permalink

Source: U.S. Senate Committee on Homeland Security and Governmental Affairs, 10/17/07 10:30 AM

Member Statements
Senator Joseph I. Lieberman [View PDF]

Today we will examine the extent to which the Department of Homeland Security relies on contractors to carry out its crucial mission to secure our home land from terrorism and natural disaster. Plainly put, we will ask who is in charge at the Department of Homeland Security - its public managers and workers, or its private contractors.

Today this Committee is releasing the Government Accountability Office's report, which we requested, in which GAO calls on DHS to improve its oversight of contractors and to better manage the risks associated with relying on contractors. GAO examined 117 statements of work for DHS service contracts and found that over half of those contracts were for services that closely support inherently governmental functions. GAO then examined 9 of these contracts in detail.

Senator Susan M. Collins [View PDF]

Witnesses Testimony: Panel 1

• John Hutton [View PDF] , Director, Acquisition and Sourcing Management , Government Accountability Office


• Elaine C. Duke [View PDF] , Chief Procurement Officer , U.S. Department of Homeland Security


• Steven L. Schooner [View PDF] , Co-Director , Government Procurement Law Program, The George Washington University

Posted by Info Center at 11:26 AM in Federal | Oversight/Contract Management | Permalink

Source: ICMA, October 2007

When a contract changes hands, the contract administration team is likely to face two problems. The first problem is deterioration of the current contractor's performance as the current contract term comes to an end, extending in some cases even to sabotage. The second problem is uneven performance by the new contractor at the beginning of the new contract term.

Here are strategies for dealing with the first problem--deterioration of the current contractor's performance--excerpted from Service Contracting: A Local Government Guide, Second Edition.

Posted by Info Center at 10:31 AM in Oversight/Contract Management | Permalink

Source: By SUSAN HAIGH, The Associated Press (CT), 9:14 PM EDT, September 20, 2007

...... The Senate earlier passed a bill setting standards for state contracts. But the House was debating the legislation into the evening. The legislation has been years in the making. It became a hot topic three years ago after former Gov. John G. Rowland resigned amid a corruption scandal involving a state contractor.

The bill establishes a board that will oversee the contracting process. It also creates a procedure for privatizing state functions. That process includes conducting a cost benefit analysis to ensure that state employees won't be able to provide the same services less expensively.

"I think it's a good first step. I'm sorry it took so long for it happen," said Sal Luciano, AFSCME Council 4 executive director. But Luciano questions whether the legislation will lead to an accounting of how many privatized contracts the state has with various companies.

Posted by Info Center at 1:44 PM in Laws/Legislation | Oversight/Contract Management | Permalink

Source: Reporters Committee for Freedom of the Press

...... Rare is the reporter who has not dealt with some privatization, whether that is with a contractor paid for some traditionally governmental service — such as running prisons in Texas or performing military duties in Iraq — or with an entity that has some public and private characteristics, such as an economic development corporation.

But the public records and open meetings laws that the press relies on provide much less access to the private contractors than if those responsibilities are still in government hands. That can make it nearly impossible for the media to provide oversight of important public services and report on how taxpayer money is being spent.

See the full Special Report on Privatization v. The Public’s Right to Know with links to additional articles.

Posted by Info Center at 11:42 AM in Audits/Reporting | Oversight/Contract Management | Permalink

Source: New York City Mayor’s Office of Contract Services

The NYC Vendor Search provides detailed information about vendors that do business with the City of New York and their principals. Vendor and principal information available in this application is obtained through VENDEX questionnaires. For more information on VENDEX, please visit www.nyc.gov/vendex.

Note: New York City Vendor Search, “is a subset of data from the City’s Vendor Information Exchange System (VENDEX) system which is maintained by the Mayor’s Office of Contract Services (MOCS).”

Posted by Info Center at 3:18 PM in Audits/Reporting | Oversight/Contract Management | Permalink

Source: By AMY DOOLITTLE, Federal Times, July 23, 2007

House Democrats intend to make it harder for unethical and poor-performing contractors to win federal business.

“Right now, there is nothing stopping a fraudulent contractor from bouncing from federal agency to federal agency, fleecing U.S. taxpayers the whole way,” Rep. Carolyn Maloney, D-N.Y., said July 18 at a House hearing to review the matter.

She and Edolphus Towns, D-N.Y., introduced this month a bill that would create a new extensive database on every federal contractor that has done work for the government in the last five years.

Posted by Info Center at 1:07 PM in Audits/Reporting | Federal | Oversight/Contract Management | Permalink

Source: Project On Government Oversight (POGO), July 18, 2007

POGO announced today that it is releasing an improved and more user-friendly "Federal Contractor Misconduct Database" (FCMD) (www.contractormisconduct.org). For years, POGO has been scouring public sources to compile instances of misconduct involving the top 50 federal contractors to highlight how risky contractors continue to receive taxpayer funds. The new database, which covers instances of misconduct from 1995 to the present, includes the source documents for each instance, drawing primarily from government documents. While the database is not exhaustive, POGO hopes that contracting officials will use it as a resource when awarding contracts to assure that taxpayer dollars are only being directed to responsible contractors.

Posted by Info Center at 1:17 PM in Federal | Oversight/Contract Management | Websites/databases | Permalink

Source: By Bill Cotterell, Tallahassee Democrat (FL), Jul 2, 2007

The whole idea of privatization - or "outsourcing," if you prefer - is to save the taxpayers money and improve services by injecting competition into the government marketplace.

It didn't start with ex-Gov. Jeb Bush, although he was an enthusiastic advocate of giving privateers a shot at the "noncore" functions of state agencies.

......... There is now a Council on Efficient Government that's cleaning up after Bush, although none of its professional staff would put it quite that way. In fairness, the council is doing a lot more than live autopsies on the Bush legacy; it will set up an orderly system for government contracting.

Posted by Info Center at 10:45 AM in Oversight/Contract Management | Permalink

Source: By ROBERT T. GARRETT, The Dallas Morning News (TX), Tuesday, May 22, 2007

A bill that would strengthen protection of foster children – and roll back almost all of the privatization of foster care lawmakers ordered last session – was endorsed by the House on Monday.

…… News reports about the beating deaths of three foster children in North Texas since August 2005 have revealed spotty state oversight of foster care contractors and state officials' lack of information about Texas' nearly 10,000 foster homes.

Posted by Info Center at 11:14 AM in Laws/Legislation | Oversight/Contract Management | Social Services | Permalink

Source: Associated Press (RI), May 20, 2007 07:59 AM

The largest of the state employees' unions is taking Governor Carcieri to court. The American Federation of State, County and Municipal employees wants the governor to comply with a new law requiring him to report the names and salaries of all private consultants who work for state government.

Posted by Info Center at 2:12 PM in Laws/Legislation | Oversight/Contract Management | Permalink

Source: Jim Siegel, THE COLUMBUS DISPATCH (OH), Sunday, December 10, 2006

....... Republicans will still control both branches of the legislature next year, albeit by smaller margins than now. ......Now, attention is focused on bills that: ........

• Restrict contributions from individuals and firms getting no-bid contracts, and require the attorney general to approve all state contracts over $1 million.

• Require that the state contract with at least two private prisons, keeping the current number intact.

Related item from OCSEA: Take Action: Urge Ohio Senate to oppose new prison privatization mandate

Posted by Info Center at 9:54 AM in Corrections | Oversight/Contract Management | Permalink

Source: By Scott Higham and Robert O'Harrow Jr., Washington Post, Saturday, December 2, 2006

The new chief of the U.S. General Services Administration is trying to limit the ability of the agency's inspector general to audit contracts for fraud or waste and has said oversight efforts are intimidating the workforce, according to government documents and interviews. GSA Administrator Lurita Alexis Doan, a Bush political appointee and former government contractor, has proposed cutting $5 million in spending on audits and shifting some responsibility for contract reviews to small, private audit contractors.

Posted by Info Center at 2:52 PM in Audits/Reporting | Federal | Oversight/Contract Management | Permalink

Source: By Beth Musgrave, HERALD-LEADER (KY), Thu, Oct. 19, 2006

The state's top auditor is calling for an overhaul of laws that exempt about $1 billion of state contracts from strict oversight. State Auditor Crit Luallen, in a third and final report on the state's contracting laws, said the state's privatization statute is ineffective. Almost all privatization contracts are exempt from strict scrutiny, meaning thousands of contracts to private vendors do not have to go through a cost-benefit analysis before a deal is signed.

.......To illustrate her point, Luallen cited the state's handling of contracts at the Communities at Oakwood, the Somerset home for the mentally handicapped. The Cabinet for Health and Family Services, which oversees Oakwood, entered into a contract that eventually totaled $17 million for Liberty Healthcare, a private Pennsylvania company, to provide management and staff at Oakwood last year. But those contracts were not covered under the privatization law because the Liberty contract did not call for the replacement of more than 10 state workers.

Instead, Liberty replaced state workers as they left.

Kentucky Auditor press release: State Auditor Crit Luallen Releases Assessment of Kentucky’s Privatization Efforts

Report: Assessment of Kentucky's Privatization Efforts (.pdf), October 2006

Posted by Info Center at 11:29 AM in Laws/Legislation | Oversight/Contract Management | Permalink

Source: By Gail Russell Chaddock. The Christian Science Monitor, September 14, 2006

Coming soon to a laptop near you: how government is spending your federal tax dollars - contracts, grants, and special projects sought by lawmakers. From wartime contracts for Halliburton to earmarks for the Punxsutawney Weather Discovery Center (think "famous groundhog") in Pennsylvania, all will be listed on a searchable database. It's the least controversial of all the reforms Congress has considered since last year's bribery and corruption scandals, and its passage will provide an effective new tool for anyone wanting to look over lawmakers' shoulders soon after they clear spending bills.

Bill S.2590 - Title: A bill to require full disclosure of all entities and organizations receiving Federal funds.

Posted by Info Center at 10:12 AM in Federal | Oversight/Contract Management | Permalink

Source: Lee Drutman, TomPaine.com, May 22, 2006

In the weeks following Hurricane Katrina, there was much hue and cry about the massive no-bid “cost-plus” cleanup and rebuilding contracts going to politically-connected firms like Bechtel, Fluor and CH2M Hill. And sure enough, eight months later, the first audits are in and it is that same old depressing reel of fraud and waste and mismanagement. ....... We’re talking about double-billing for hauling the same debris, hauling extra debris to boost reimbursements, overstating mileage—the same old tricks. As a neat touch, inspectors found that Army Corps of Engineers officials had an “informal agreement” not to challenge bills that exceeded estimates by 50 percent.

...... The argument then and today is that turning to the private sector harnesses the power of competitive markets. Since companies must compete for contracts, this competition should discipline them into using taxpayer money more efficiently, especially compared to the dreaded government bureaucracy. So why hasn’t this worked? The first reason is that contracting out requires monitoring—and monitoring requires actual people. Over and over again, reports of contractor fraud find at best minimal oversight.

Posted by Info Center at 3:03 PM in Federal | Oversight/Contract Management | Permalink

Source: By Katherine Barrett & Richard Greene, Governing Magazine, May 2006

The exact numbers are a mystery. Even Khi Thai, director of the Public Procurement Research Center, says that "no one even really knows the extent of outsourcing in the states." The best guess is that somewhere between 15 and 20 percent of all state spending is contracted out to third parties. That adds up to a total that may be in excess of $200 billion. The real trouble isn't in the numbers. It's in the absence of solid management for privatized service contracts. Problems are common all along the route--from the decision to outsource a government service, to overseeing the effort, to ensuring that the contractor delivers what's promised.

Posted by Info Center at 2:48 PM in Oversight/Contract Management | Permalink