Tag Archives: Virginia

Servicing Our Economy: Producer Service Location and Government Procurement 2004–2010 in the Washington DC Metropolitan Area

Source: S. C. Christopher, R. D. Vese, M. A. Boyd, A. D. Reddy, A. P. Mulhollen, D. E. Zand and T. F. Leslie, Growth of Change, May 15, 2016

Abstract:

Harrington and Campbell (1997) previously illuminated the pattern of producer services’ suburbanization in the Washington, D.C., metropolitan area between 1970 and 1992. Their results showed producer services growing at a faster rate at locations farther from the central city. We revisit the topic utilizing data from 2004 to 2010, assessing not only changes in the distribution of producer services since their work, but also the impact of massive increases in defense spending on producer services’ growth throughout the first decade of the twenty-first century. Multivariate linear regression is used to estimate per capita growth of producer services employment using six independent variables. Our results reveal producer services employment during the time period has grown significantly more quickly in the urban D.C. core than the outer suburbs, contrary to Harrington and Campbell’s research. Additionally, we find per capita producer services employment is self-limiting over the study period: locations with more producer services employment in 2004 experienced significantly less producer services growth over the period. We find federal procurement has no correlation on producer services overall, with limited effects on some subsectors. Analyzing a select group of producer services subsectors revealed that no sectors followed the overall model exactly, suggesting that targeting producer services for growth must be done carefully. None of our models show employment diversity to be a factor in differentiating economic growth at the intra-metropolitan level.

Development and Management of State Contracts in Virginia

Source: Commonwealth of Virginia, Joint Legislative Audit and Review Commission, Report no. 482, June 13, 2016

From the summary:
Report on the state contracting process, from procurement through contract administration, with a focus on maximizing value and minimizing risk to the state. …

WHY WE DID THIS STUDY
In 2014 the Joint Legislative Audit and Review Commission (JLARC) directed its staff to review the development and management of state contracts. Interest in this topic was prompted by problems that arose from several recent high-profile contracts. Staff were directed to evaluate whether the state’s policies ensure that contracts provide good value to the state and mitigate the risks to agencies and the public.

ABOUT STATE CONTRACTING
State entities in Virginia spent more than $6 billion through contracts in fiscal year 2015, mostly for goods and services related to transportation, construction, and information technology. Several laws and policies govern how agencies procure and use contracts, but the most prominent is the Virginia Public Procurement Act. The contracting process is decentralized, as most contracts are procured, developed, and managed by individual agencies.

WHAT WE FOUND
Some contracts deviated from original expectations Approximately 10 percent of contracts analyzed for this study—12 contracts valued at $1.8 billion—fell significantly short of meeting agencies’ original expectations. Some less significant deviation from original expectations is to be expected, especially with complex contracts. Almost two-thirds of the contracts were at least slightly behind schedule, over budget, or did not meet agencies’ needs. These contracts were procured under different state statutes and therefore the authority of different oversight agencies. In some cases, the public was negatively impacted. Most performance problems appear to be within the control of agencies or vendors and may therefore be preventable through more robust contracting processes.

Some policies can limit agencies’ ability to make quality purchases at reasonable cost ……
Risk management is not sufficiently emphasized to adequately protect the state ……
Many contracts do not contain provisions to allow for contract enforcement ……
Lack of focus on contract administration policies undermines adequate contract monitoring and enforcement ……
Vendors are generally satisfied with state contracting but have difficulties filing complaints when warranted ……
Centralized oversight of state agency contracting is too limited ……
Comprehensive information on contract performance is lacking ……

WHAT WE RECOMMEND
• Legislative action Develop criteria for identifying high-risk contracts and implement a process to oversee them.
• Direct DGS and VITA to develop a centralized approach to tracking contract performance.
• Direct DGS and VITA to develop a comprehensive training program on effective contract administration.
• Executive action Develop tools and policies that allow agencies to balance cost with the quality of goods and services purchased.
• Develop mandatory training on effective risk management.
• Develop guidelines for assigning staff to administer contracts, particularly those that are high risk or high value.
• Develop guidelines for monitoring vendor performance, reporting performance problems, and using enforcement measures.
• Improve awareness of the vendor complaint process and make it easier to use.
Related:
Procurement study finds risks in state contracting and oversight
Source: Michael Martz, Richmond Times-Dispatch, June 13, 2016

…A new study by the Joint Legislative Audit and Review Commission found that the state’s decentralized procurement system allows agencies to agree to high-risk contracts in many cases without including penalties, incentives, and performance measures to ensure the state gets its money’s worth from the deals, or a termination clause to get out of them. The 152-page report, based on a 15-month investigation that ended in March, also found that few agencies seek legal advice from the Office of the Attorney General, even for contracts that include provisions that are not standard state practice, and when they do, they rarely go beyond the legality of the contract to its protections against risks to the state….

Problems with Virginia contracting system
Source: Associated Press, June 13, 2016

Virginia’s $6 billion-a-year contracting system has serious flaws — including multi-million dollar contracts managed by untrained staff and contracts that are prepared without legal review, according to a new state report issued Monday. The General Assembly’s watchdog agency, the Joint Legislative Audit and Review Commission, said in a report that the state’s procurement system sometimes leads to the state overpaying for services or receiving poor quality goods and services. JLARC said some public funds have been wasted because some state contracts don’t have sufficient built-in legal protections. The report identified one unnamed agency that paid $25,000 for materials and work that were never used and another agency that paid $325,000 for “faulty equipment.” The report said many agencies do a poor job of managing a contract once procured by the state. JLARC found that “many agency staff have no prior contract administration experience or training,” including on some contracts worth $50 million or more…..

Raising fees rejected after back-and-forth debate on meal profits

Source: Ashley Hodge, Gazette-Virginian, May 11, 2016

After discussing discrepancies over whether the school system has made money since partnering with food service company Sodexo, Halifax County School Board members opted out of raising meal prices when they met Monday evening in Halifax. A motion was made by ED-4 Trustee Joe Gasperini to accept a 10 cent increase that would hike lunch fees to $2.20, but it failed by a 4 to 4 vote with ED-1 Trustee Orey Hill, ED-5 Trustee Freddie Edmunds, ED-7 Trustee R. K. “Dick” Stoneman and ED-8 Trustee Walter Potts voting no. … Potts then asked if this increase came from Sodexo, and Camp said it did, and that it was needed for the school system to continue to make the same amount of money. ED-6 Trustee Fay Satterfield then questioned if the school system had been making a profit since joining with Sodexo. …

Related:

Schools partner for food service
Source: Ashley Hodge, Gazette-Virginian, June 4, 2014

…Halifax County Public School Board opted Monday night to partner with Sodexo Quality of Life Services to provide food services in the upcoming school year….The food service staff currently in place will remain Halifax County Public School employees. Many of the food service employees packed the meeting leaving standing room only for some, and the school board opened the floor for questions. Most employees were concerned with salary, benefits, training and attire. School board members stressed the salaries and benefits that each employee currently receives would remain the same for the upcoming school year. According to Sullivan, Sodexo will bring in a general manager, an administrative assistant and “a lot of training.” The general manager will implement Sodexo programs and work with the leads and supervisors and front line employees to implement those programs, said Sullivan. Training will be year-round including supervisor training, management training, customer service, technical skills, life skills and comprehensive food and physical safety training. Career growth opportunities also will be provided for employees. Sodexo also will provide uniforms for the employees. … Sodexo also guarantees a surplus of $10,140 at the end of a fiscal year. According to Sullivan, last year the school system had a deficit of $17,855. As Sullivan explained it, if there is a $15,000 loss, Sodexo will give up their fees to “make it good up to the $10,000.”…

School board trustees to mull custodial outsourcing

Source: The Gazette-Virginian, May 4, 2016

Halifax County School Board will discuss bids from custodial outsourcing companies when it meets at 6 p.m. Thursday for a work session in the School Board Conference Room in the Mary Bethune Office Complex in Halifax. The board agreed to receive bids until Wednesday at their last meeting after they amended and approved a request for proposal. … After ED-4 Trustee Joe Gasperini told Jennings that he felt the school board should decide if employees were going to stay with the school system, Jennings told the board he wrote the RFP so that companies would give prices based on if they took the employees or if they remained employees of the school system.

Related:

Schools now taking custodial outsourcing bids
Source: Ashley Hodge, Gazette-Virginian, April 13, 2016

Halifax County Public Schools will receive bids from custodial outsourcing companies through May 4 after Halifax County School Board members amended and approved a request for proposal at their meeting Monday evening in Halifax. The RFP was unanimously approved by a 5-0 vote with ED-3 Trustee Kim Farson, ED-7 Trustee R. K. “Dick” Stoneman and ED-1 Trustee Orey Hill absent from the meeting. … The RFP states the first contract will be for 12 months from June 1, 2016 through June 1, 2017 with the school system having the option of extension annually up to an additional five years. Extension will be based upon satisfactory performance of the contractor. The RFP initially said sealed proposals would be accepted until May 13, but ED-6 Trustee Fay Satterfield suggested moving the date to May 4, so bids could be reviewed prior to the board’s May 9 meeting. … Jennings said he wrote the RFP so that companies will give prices based on whether the employees become company employees or if they remain employees of the school system.

Group gives proposal on outsourcing custodial services for schools
Source: Doug Ford, Gazette-Virginian, February 1, 2016

Halifax County School Board trustees decided to seek more information on a possible outsourcing of services after listening to a presentation by GCA Services at its work session in Halifax on Friday. … GCA serves approximately 3,000 schools in 48 states, including 17 partners in Virginia and with a 96 percent contract retention rate. … Halifax County Public Schools currently employs 50 custodians and 18 maintenance workers, all vested in the VRS system. Operations and maintenance accounts for approximately 8 percent or $5,271,184 of the current budget for Halifax County Public Schools, and GCA, if implemented would save the school system approximately $958,240 its first year, not including VRS payments, according to GCA representatives. …

What Happens If You Pay Contractors Only When Their Programs Work?

Source: Charles S. Clark, Government Executive, April 20, 2016

The Obama administration is “doubling down” on its study of the “pay for success” approach to funding social services programs after they demonstrate results, rather than in advance. … The Obama administration is “doubling down” on its study of the “pay for success” approach to funding social services programs after they demonstrate results, rather than in advance. … The feasibility studies will be funded in locations such as Boise, Idaho, Baltimore and parts of Virginia and Arizona, OMB said. In total almost 70 projects in 29 states and the District of Columbia are in the works. A grantee called the Nonprofit Finance Fund has been helping nine PFS projects structure the agreements that are the “backbone of PFS projects,” they wrote. Other grantees include the Corporation for Supportive Housing, the Green and Healthy Homes Initiative, the Harvard Kennedy School Government Performance Lab, the Institute for Child Success, the National Council on Crime and Delinquency, Third Sector Capital Partners and the University of Utah Sorenson Impact Center. …

Lynchburg lawmaker suggests privatization to keep training center open

Source: Tim Saunders, WDBJ, January 19, 2016

The state agency that operates all of Virginia’s training centers is moving away from institutional care and shifting funds to private groups that provide home-based care.  Some training centers in other parts of the state have already shut down. State Senator Steve Newman has proposed legislation to slow the process of closing CTVC. … Newman has introduced a budget amendment that would prevent money from being shifted away from the Central Virginia Training Center. He also wants the state to consider partnering with a private agency to operate four buildings on the training center property. … Under Newman’s plan the state would retain ownership of the training center, but a private group would be in charge of its day-to-day operations. Some families worry a private operator will cause the level of care to go down. … 212 people live at the Central Virginia Training Center right now, according to a spokesperson for the facility.

Roanoke School Board promises to scrutinize food outsourcing

Source: Sara Gregory, Roanoke Times, January 12, 2016

Roanoke School Board members promised to closely watch how Sodexo performs following their unanimous vote to turn over operation of the district’s breakfast and lunch program to the company. … With the vote, the board affirmed the recommendation of Roanoke Superintendent Rita Bishop and is set to become the 11th school district in Virginia to outsource food services. Per a draft of the contract, SodexoMAGIC will begin serving meals to students starting in June. The company is a corporate partnership between Sodexo and Magic Johnson Enterprises. … From the beginning of the negotiation process, which began last summer after the board gave its approval, the district demanded Sodexo put in place safeguards for current employees and local vendors, Barnett said. … The contract does not address the 82 cafeteria workers employed through Elwood Staffing, which has managed some food service jobs since 2012-13 at a cost of around $100,000 per month. Barnett said that the district wasn’t in a position to negotiate assurances for those positions because they are employed by Elwood and not Roanoke schools but that he suspects some would be hired by Sodexo.

Related:

Roanoke City Public Schools to vote on outsourcing contract Tuesday night
Source: Amanda Kenney, WDBJ, January 11, 2016

Tuesday night the Roanoke City School Board will vote on a contract that will outsource food services to Sodexo. … Tuesday night the Roanoke City School board will vote on a contract that will outsource food services to a company called Sodexo, which doesn’t guarantee that Roanoke Fruit and Produce Company will supply the district. …

Roanoke Education Association opposes school board’s plan to privatize food services
Source: WSLS, January 8, 2016

The Roanoke Education Association has come out against Roanoke City Schools’ interest in hiring Sodexo for its food services. The district has been in talks with the company to provide food and nutritional services for students. The R.E.A. is speaking out against the idea, saying there is no reason for the school board to fire the current food service employees, and that the public service should not be privatized. The R.E.A. also says the move would sever ties with local vendors, and decrease the quality of nutritional services for the children.

Roanoke schools to vote on whether to outsource food services to Sodexo
Source: Sara Gregory, Roanoke Times, January 7, 2016

Under the terms of the contract, Sodexo would manage the school district’s food services program, including its current employees, for the next two years with options to renew. The food services program operates outside of the district’s normal operating budget and is expected to be self-sufficient, funded primarily through payments and reimbursements for meals sold. In the first year of the contract, Sodexo promises Roanoke schools a surplus of $483,927 after normal expenses and Sodexo’s fees, which come to 23 cents per meal in administrative and management fees. … The contract doesn’t require that Sodexo hire the 86 cafeteria workers who are staffed through Elwood Staffing. Roanoke outsourced some food services jobs starting in 2012-13 to Elwood and pays the company about $100,000 per month, according to a report given to the school board last month. When it comes to local vendors, the contract says Sodexo must use them to purchase food and supplies “when practical and in the best interest of the students.” Any purchases with non-local vendors that exceed $5,000 must be reviewed by the district, but the contract says the district cannot require Sodexo to use vendors the company hasn’t approved.

Meal Plan Costs Tick Upward as Students Pay for More Than Food

Source: Stephanie Saul, New York Times, December 5, 2015

…For the first time this year, the University of Tennessee imposed a $300-per-semester dining fee on Mr. Miceli and about 12,000 other undergraduates, including commuters, who do not purchase other meal plans…..Tennessee’s contract with its dining vendor, Aramark, is just one example of how universities nationwide are embracing increasingly lucrative deals with giant dining contractors, who offer commissions and signing bonuses to help pay for campus improvements and academic programs. It is part of a new model of raising money through partnerships with private vendors, officials say, and with state funding for higher education still below pre-recession levels, a way to replace lost revenue. Under its contract, which runs through 2027, Tennessee will get 14 percent of all food revenues plus $15.2 million in renovations to dining facilities. In exchange for signing a 20-year contract that runs through 2034, the University of Virginia recently got a $70 million contribution from Aramark, based in Philadelphia — in addition to $19 million in renovations and annual commissions increasing to $19 million a year. Texas A&M announced a 10-year deal in 2012 with Chartwells, a subsidiary of the British-based Compass Group, that included a $22.7 million signing bonus and $25 million in capital investments…. At South Carolina State University, a historically black institution, a 2014 audit found that students paid $343 a year in “hidden costs” for food. The money was rebated to the institution by its vendor, Sodexo, a French company, partly to pay for a $5 million wellness center, which was never built….. An audit this year at the University of Louisiana at Lafayette found that the food vendor catered free parties for children of a university employee while inflating bills to the university.

Suffolk looks at privatizing school bus operations

Source: Mike Connors, The Virginian-Pilot, September 21, 2015

Buses have caused many a headache in city schools the past few years, making some students late to class. Maintaining enough drivers has been hard, with some complaining about pay. School Board member David Mitnick thinks he has a possible solution: outsourcing the division’s transportation department. … According to an article this spring in School Bus Fleet magazine, which covers national school transportation topics, an estimated 35 percent of buses nationwide were contractor-owned in 2012-13. That was up from barely 25 percent five years earlier. … Board member Linda Bouchard said she favors any kind of outsourcing that is fiscally sound and does not interfere with students’ ability to learn. She noted that Suffolk faces unique busing issues because of its size and wide variety of landscapes, from urban to rural. … Board member Judith Brooks-Buck disagrees. She said that when she was principal of a school in Alabama a few decades ago, busing was outsourced. Problems still popped up, she said. She also said Suffolk has loyal drivers, and she wouldn’t want to diminish them in any way.

City considers privatizing water treatment

Source: Denice Thibodeau, godanriver.com, August 30, 2015

The city will be asking for proposals from commercial water plant operators to see if the water treatment plant, pumping stations, water towers and storage facilities could be managed more cost-effectively by a private company — much the same way as the wastewater treatment plant has been managed by a private operator since 1998, Grey said. … Grey said many existing employees were hired by the new wastewater operator when it took over, and he expects the same thing to happen if it makes sense to privatize operation of the water treatment plant. … The city would still be responsible capital expenses of the plant, while the operator would be responsible for day-to-day operation, facility management and maintenance, hiring and training staff and all chemical costs.

Related:

City considers privatizing water plant operations
Source: GoDanRiver Staff, godanriver.com, August 26, 2015

Danville Utilities will seek bids from commercial water plant operators to determine whether operation of the city’s water treatment plant and storage facilities could be cost-effectively privatized. The proposals would solicit statements of qualifications, technical approach and pricing from firms capable of providing full service operations. … Jason Grey, interim director of utilities, said the objective is to determine if outsourcing operations would be more efficient. A commercial operator also would provide technical assistance regarding future capacity and regulatory issues.