Research

Standing Guard: How Unaccountable Contracting Fails Governments and Taxpayers

When governments outsource vital public services, how carefully are contractors being watched? As local and state governments increasingly contract out critical public services that are crucial to the well-being of the community, the need for robust contract oversight is pressing. Yet, recent research and the experiences of cities and states across the county show that too often contract oversight is lax. 

Robust oversight means that the government can hold contractors accountable for their performance, and ensure that the public receives quality services at a reasonable cost. Proper oversight can protect public health and safety. Strong oversight allows governments to catch waste, fraud, and abuse in real time instead of long after the fact, and correct mistakes before they result in serious harm.

Lax oversight has detrimental impacts for the people served by a program or service, and for the public at large. Poor oversight of government contracts can mean:

  • Wasted public tax dollars
  • Fraud and abuse
  • Poor quality of service and underperformance by contractors
  • Risk to vulnerable residents and to public health and safety

Problems with contract oversight are pervasive. These problems occur in cities and states across the country and across all sectors of government, including health and human services, criminal justice, information technology, education, public works, and more. Recent research and numerous examples illustrate why contract oversight often falls short. This report discusses common problems and the real world consequences of lax oversight, and provides policy recommendations to help cities and states improve their oversight of government contracts. The appendix provides additional examples of recent government contract problems not included in the report.  

Shift: How Taxpayers Began Reclaiming Control of their Public Services

In 2014, nineteen states saw action to curb the reckless outsourcing of public services, and four states so far have signed responsible contracting measures into law. This legislative recap includes a chart and map showing the legislative shift. 

Download the report:

Race to the Bottom: How Outsourcing Public Services Rewards Corporations and Punishes the Middle Class

Race to the Bottom Report Image

As state and local governments outsource important public functions to for-profit and other private entities, what happens to the quality of life for the workers who provide these services, and the communities in which they live? A growing body of evidence and industry wage data suggest an alarming trend: outsourcing public services sets off a downward spiral in which reduced worker wages and benefits can hurt the local economy and overall stability of middle and working class communities. By paying family-supporting wages and providing important benefits such as health insurance and sick leave, governments historically created intentional “ladders
of opportunity” to allow workers and their families to reach the middle class. This is especially true for women and African Americans for whom the public sector has been a source of stable middle-class careers. Low-road government contracts reverse this dynamic. While corporations rake in increasing profits through taxpayer dollars and CEO compensation continues to soar, numerous examples in this report show that workers employed by state and local government contractors receive low wages and few benefits.

 

Who's The Boss: Restoring Accountability for Labor Standards in Outsourced Work

Lead companies that outsource distance themselves from the labor-intensive parts of their businesses and their responsibilities for those workers. While some of these outsourcing practices reflect more efficient ways of producing goods and services, others are the result of explicit employer strategies to evade labor laws and worker benefits.

Charter School Vulnerabilities to Waste, Fraud, and Abuse

To understand why there are so many problems in the charter industry, one must understand the original purpose of charter schools. Lawmakers created charter schools to allow educators to explore new methods and models of teaching. To allow this to happen, they exempted the schools from the vast majority of regulations governing the traditional public school system.

Do Poor Kids Deserve Lower-Quality Education Than Rich Kids? Evaluating School Privatization Proposals in Milwaukee, Wisconsin

During the past year, Wisconsin state legislators debated a series of bills aimed at closing low-performing public schools and replacing them with privately run charter schools. These proposals were particularly targeted at Milwaukee, the state’s largest and poorest school district.

Safeguarding Children in Texas Foster Care: Key Issues in Policy and Practice Recommendations to Improve Child Safety in Foster Care

In Texas, there has been a dramatic increase in the number of children dying in foster care due to abuse and neglect. These tragedies are preventable. Children in foster care deserve to be protected from further maltreatment and placed in settings where they are safe and can thrive for a lifetime.

More Dangerous, More Costly: An Analysis of Transportation Outsourcing

Contrary to popular belief, outsourced school transportation services generally have weaker safety records and are more costly than districts operating their own transportation services, according to a number of public documents Minnesota 2020 analyzed for this report.

Better to Own or to Regulate? The Case of Alcohol Distribution and Sales

Alcohol-related income generation is compared across monopoly and license off-premise alcohol regulatory models in U.S. states, 1977-2010. The findings challenge the wisdom of asset divestment as a response to fiscal stress and contradict a central tenet of New Public Management (NPM) Theory.

The Tragedy of the Private, The Potential of the Public

Over the past 30 years, since Margaret Thatcher and Ronald Reagan gained office, it is clear that the problems the welfare state was designed to alleviate - hunger, disease, unemployment, poor living conditions - have thrived once again, as these dogmatically pro-market politicians drove the destruction of the model. In the case of too much of the Global South, their ideology contributed to blocking attempts to build public services where they are most needed.