"In-sourcing": Switching from contracts to staff saves millions for schools

As local politicians bluster about saving money with outsourcing, two San Diego education districts have quietly achieved real savings by doing the opposite - bringing contracted services back in-house.

San Diego Unified School District, the second largest school district in California, ended its bus services contract in January and will save an estimated $1 million per year by bringing the routes in-house. Additionally, in December 2009, the district "in-sourced" the warehousing and distribution of copier paper, at a savings of $153,000 per year.

Meanwhile, the San Diego Community College District is saving $1.1 million a year since it canceled a long-standing IT management contract and brought the entire 62-employee operation in-house. Almost all the 62 employees have kept the same jobs they had with contractor SunGard Higher Education, so "the savings comes from eliminating the profit SunGard was making," said district spokesperson Rich Dittbenner.

"Contrary to the claims of private contractors and their lobbyists, our experience is that workers on the front lines of providing public services consistently identify ways to save money and improve service quality by in-sourcing," said School Board President Richard Barrera. "The key is having workers and management pulling together to actually serve our kids, not subsidizing private profit with taxpayer dollars."