Computer bidding process reviewed / Contract would replace tax system

Source: Eric Eyre. Charleston Gazette (WV), December 20, 2005

State investigators are reviewing a proposed $22.5 million contract to replace the West Virginia Department of Revenue’s antiquated computer tax collection system, according to state officials close to the inquiry. The contract is expected to be awarded later this week to Fast Enterprises, a Denver-based company that specializes in providing computer software to state government tax departments. The Legislature’s Commission on Special Investigations has requested copies of the proposed contract and related documents. State tax division employees have complained that the contract was tailored to Fast Enterprises, which was the only company to bid on the “integrated tax system” contract. Fast Enterprises officials have not been accused of wrongdoing.

Computer contractor dumped

Source: Mark P. Couch, Denver Post (CO), Dec 21, 2005

The state of Colorado ended months of protracted negotiations with contractor Accenture LLP on Tuesday, dumping the company after the state poured $35 million into a computer system that doesn’t work. The state and the company agreed not to sue each other and released a joint statement saying they “mutually agreed to terminate” the contract for a new unemployment-insurance system. In addition, Accenture agreed to refund $8.2 million and to release $7 million more that it claimed the state owed for work it already had completed, said Dan Hopkins, spokesman for Gov. Bill Owens. ….. Genesis is not the state’s only troubled computer system. The secretary of state fired Accenture in November after spending $1.5 million on a $10.5 million voter-registration system. And the $204 million Colorado Benefits Management System developed by EDS continues to roil lawmakers with requests for additional money.

A giant behind the scenes / Already growing fast, Convergys sees opportunity for more

Source: Dan Sewell, Associated Press, Wednesday, December 21, 2005

….. Convergys benefits from two powerful trends: outsourcing, in which companies contract out work to companies that specialize in operations to improve efficiency and save money, and globalization, with operations in some 30 countries, services in 30 languages and clients in nearly 70 countries. ….. In Florida and Texas, Convergys’ contracts and early operations have been subjects of controversy. In Florida, critics say the Bush administration’s $350 million, nine-year agreement with Convergys in 2002 to privatize personnel services for state employees has been marked by glitches and delays. “Since its inception, there have been hundreds of complaints, and it continues up until today,” said Florida Rep. Curtis Richardson, D-Tallahassee, saying something like a change in insurance coverage can still take months to get updated. He doesn’t think enough planning and testing went into the project, which backers in Florida say is improving. But Richardson and other critics acknowledge that such moves to privatization are likely to continue under conservative administrations.

Opinion: In Texas, where there's a need, there won't be wait /State streamlines welfare process, takes lead in reform

By JOE BARNETT and CHRISTY BLACK, Houston Chronicle (TX), Dec. 20, 2005, 9:18PM

In a major step forward for welfare reform, Texas is about to roll out an ambitious program using private sector principles to streamline the process of applying for public health and welfare programs. The reform is expected to save taxpayers more than $100 million a year, while making it easier for people who qualify for social services to enroll in programs and claim benefits. Texas is the first state in the country to implement such a comprehensive, statewide reform, and it could serve as a model for other states. ….. By using both state workers and private contractors who specialize in technology, data management and administrative duties, the system will be more efficient, will cost less and will allow state employees to focus on the people they serve, not the paperwork.

(Note: Barnett is director of publications and Black is a research associate with the National Center for Policy Analysis)

Private funding for I-95 scrapped

Source: MIKE BILLINGTON, The News Journal (DE), 12/21/2005

A controversial plan to form a public-private partnership to overhaul the most congested section of I-95 through Delaware has been scrapped, according to state Department of Transportation officials. The decision to abandon first-ever efforts to create such a partnership will not delay the start of work on the project near Christiana, Transportation Secretary Nathan Hayward III said Tuesday. Work is slated to start in the summer, he said.

Judge hears state, union claims

Source: Jennifer L. Boen, Fort Wayne News Sentinel (IN), Wed, Dec. 21, 2005

Allen Superior Court Judge Nancy Boyer heard nearly four hours of arguments and testimony during a hearing Tuesday related to claims that the state of Indiana failed to follow a state law requiring competitive bids be sought before entering into a public-private contract. Council 62 of the American Federation of State, County and Municipal Employees, or AFSCME, which represents about 200 Fort Wayne State Developmental Center employees, plus union member and 34-year employee Anita Stuller, allege the Indiana Family and Social Services Administration entered into a $95 million contract with Liberty Healthcare Corp. of Pennsylvania without seeking requests for proposals from other vendors.

Toll roads with a cash-out option

Source: Dennis Cauchon, USA TODAY, December 15, 2005

State and local governments are singing a new tune in operating toll roads: selling or leasing them for cash and letting private companies run them. The governments plan to use money from the transactions to build new roads, repair old ones or pay for other programs. The idea has caught fire since Chicago leased its Skyway — an 8-mile elevated highway that carries traffic from the city to the Indiana border — for $1.8 billion in cash to Spanish and Australian investors in January. The Skyway had lost money for decades and only recently had turned profitable, generating $40 million in tolls and $20 million in profits last year. The price for the 99-year lease was more than twice as much as any other company bid. Now other governments around the country are examining what their toll roads are worth and wondering whether they can get a Chicago-style windfall — or at least a good deal.

In-house data centers: Living on borrowed time?

Source: LESLIE BROOKS SUZUKAMO, St Paul Pioneer Press, Sun, Dec. 18, 2005

The city of Minneapolis doesn’t own a single computer. …… The machines themselves didn’t disappear, of course. Hundreds of PCs still sit on top of desks in City Hall. But in the Twin Cities and around the country, a few businesses are beginning to do away with the data centers they spent most of the past two decades building up. They are moving to another model of computing called “utility” or “on-demand” computing, in which they buy their computing as a service and let someone else worry about fiddling with the machines. Minneapolis outsourced its entire IT infrastructure to Unisys Corp. nearly three years ago, from the desktop machines to its underground data center that sprawled in the basement level between City Hall and the Hennepin County Government Center. Many of the Minneapolis IT workers moved to Unisys’ payroll. Outsourcing isn’t new, of course, but farming out the city’s data center — the real muscle behind any business’s IT work — is considered radical by most of the IT establishment.

Sanitation contract approved despite looming layoffs

Source: JENNIFER A. WELLS, Marion Chronicle Tribune (IN), Dec 20, 205

Although they’re days away from a layoff and their jobs have been eliminated, the city’s trash workers are still a part of a contract with various city workers that was approved Monday by the city Board of Public Works and Safety. Contract negotiations began before discussions surrounding trash privatization started, which meant that the city’s eight Sanitation Department workers were included in the package, along with street, traffic and fleet maintenance personnel. ….. The contract between the city and the American Federation of State, County and Municipal Employees Local 3063 was approved by a 4-0 vote Monday, with board member Jim Swan absent…… According to Spitzer, the inclusion of the sanitation department in the contract will not prohibit Marion Services Inc. from beginning trash collection next month. The Board of Works voted to privatize services in September. “It is not in any way going to impede (the city’s decision to privatize),” he said. “We are following the contract in terms of sending notifications to employees.” ….. John Francis, president of Marion Services’ parent company, Capital Waste Inc., promised the board and the city that he would hire all displaced workers.

Congress Clamps a Lid on Outsourcing of Government Work

Source: Stephen Barr, Washington Post, Tuesday, December 20, 2005

Congress, in an effort to protect federal jobs, has placed restrictions on the Bush administration’s program that uses cost-comparison studies to determine whether “commercial” activities performed by the government should be turned over to contractors. One of the more significant curbs was contained in the fiscal 2006 spending bill for the departments of Transportation, Treasury and Housing and Urban Development. The provision applies across the government — except for the Defense Department and the Transportation Security Administration’s airport screener operation — and became law Nov. 30. The fiscal 2006 defense spending bill, approved by the House yesterday and sent to the Senate, would place a similar limit on the Defense Department’s conversion of federal jobs to contractor jobs.