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This Week’s Outsourcing Scan 03-24-14

Update: Upcoming Outsourcing Issues. March 24, 2014

1) National: Hungers strikes to protest against deportations and conditions at GEO Group facilities in Washington and Texas highlight federal policy and prison privatization. “At the peak of the Tacoma hunger strike, which began March 7 at the Northwest Detention Center, at least 750 detainees were refusing meals. Currently, there are two detainees at the Tacoma facility still on hunger strike. The Tacoma detainees recorded messages in solidarity with the detainees in Texas, inspiring them to take similar action and draft a list of demands. (…) The hunger strikers’ demands include an immediate halt to all deportations, just treatment for detainees, an end to crowding in cells, an end to double judgment policies, adequate food and medical care, affordable calling prices and lower rates at commissary.” GEO Group “has denied all allegations of guard retaliation against hunger strikers, saying that its facilities conform to ICE’s operating standards.”

2) National: Vice magazine profiles anti-prison privatization activist Alex Friedmann. “Personally, I would like to see at some point private prison stock be lumped in the same category as tobacco companies, arms manufacturers, and people that make land mines,” Friedmann told the magazine. “Toxic stocks that people do not want to be involved in for ethical and moral reasons.”

3) National: Sarah Shik Lamdan analyzes how outsourcing damages transparency in environmental protection. “As swaths of information move from FOIA’s realm into the protected world of contractor practices, environmental information becomes veiled from public view. The FOIA is being hollowed out as the government outsourcing and public-private partnerships increase and contractors take over more and more traditionally regulatory roles.”

4) National: SAFEbuilt, a Colorado-based government services outsourcing company that grew out of a building inspection contracting company, makes its case for privatization in an advertising brochure, using Reason Foundation arguments to debunk “myths.” “One of the most common misconceptions or beliefs about privatization is that it threatens and displaces local jobs.” SAFEbuilt describes itself as providing “privatized community development solutions including building department services, community and transportation planning and code enforcement in short-and long- term engagements to public agencies.” The company faced complaints of poor service in Granby, Colorado.

5) National: Eric Liu applauds bipartisanship on reducing mandatory minimum sentencing. “Democrats and Republicans agree the metastasis of the prison-industrial complex is unhealthy. But for each side there are also benefits to acknowledging the other side’s rationale. In a GOP sometimes perceived as intolerant, Rand Paul’s embrace of sentencing reform lets him to show his concern for minorities. Civil rights Democrats, meanwhile, get to embrace fiscal responsibility.”

6) National/International: As Vancouver taxpayers get closer to paying half a billion dollars for a new incinerator, The Vancouver Observer looks at “some of the incinerator disasters in other cities that continue to drain city coffers.” Includes Detroit and Harrisburg. “For half a billion dollars, Metro Vancouver could build the world’s premier zero waste program, rather than build a $480 million incinerator, a San Francisco environmental advocate said. The Vancouver Observer went to North America’s ‘Greenest City’ to find out how waste is managed there.”

7) National/California: A new GAO report on military housing reviews privatization of unaccompanied personnel housing. GAO makes no recommendations, but notes that “the Air Force and Marine Corps concluded that privatization was not suitable for meeting any of their housing needs. For example, an April 2000 Air Force memorandum indicated that privatization could have a negative effect on building unit cohesion.” The report also notes that a San Diego Navy housing privatization project is costly.

8) Arizona: An Arizona Star editorial urges business leaders to provide a counterweight to those advocating privatized education. “Advocating for public education, the business community must flex its muscle to stop bad bills in the Legislature and to make the convincing business case for education. Lawmakers hear from constituents and interest groups that want to privatize education, punish schools financially and philosophically oppose public education. They must hear with equal force from business owners and operators who support students, who need smart, educated employees and can speak not only of the problems they see, but offer solutions.”

9) Arizona: The DOT is seeking public comment through May 31 on a proposed high speed rail link between Phoenix and Tucson. A DOT spokesperson “said there are several potential sources of funding, including the state and federal governments or public-private partnerships.”

10) California: The San Diego Reader says that new Mayor Kevin Faulconer is moving on a “behind-the-scenes ramp-up of what is expected to be a sweeping privatization at San Diego’s city hall.”

11) Connecticut: The City of Bridgeport signs a 10 year contract with Severn Trent to operate its wastewater treatment services. The contract “includes two subsequent five-year options. The public-private partnership is the first in Connecticut for Severn Trent Services, which now operates facilities in 22 states.”

12) Indiana: Lake Station EMS workers protest plans to privatize the town’s ambulance service. The move will cost almost two dozen part time paramedics and EMTs their jobs. “Vic Vargas, a 35-year veteran of the city’s EMS, was among those picketing Saturday. Vargas said he learned from media reports Thursday that he was losing his job. ‘They should have been professional enough to call a meeting to tell us they’re privatizing,’ Vargas said.”

13) Massachusetts: State Rep. Pacheco, author of a rigorous Massachusetts law regulating outsourcing, calls out the conservative Pioneer Institute, demanding that it release information on its funding. “Facing a Republican-led effort to exempt transportation projects from the strictures of the law last week, Sen. Marc Pacheco, a Taunton Democrat, accused the conservative Pioneer Institute of shielding its financial backers and cast skepticism on a Pioneer study that found the state could save hundreds of millions of dollars if bus repairs were privatized.”

According to tax filings by some of its donors, the Pioneer Institute has received funding from the “dark money” Donor’s Capital Fund and DonorsTrust; the Jacqueline Hume foundation, associated with anti-labor millionaire Jerry Hume; and the David H. Koch foundation (back in 2001).

14) Michigan: Muskegon public school clerks and aides take a 4.5% pay cut and make other concessions. Jim Webber, president of the Muskegon Clerks-Classroom Assistant Association, “said the ‘first question’ he asked [Superintendent] Felske during their private talks was about his intention to privatize any of the employee classes in his bargaining unit. Felske told him he had no such intention, Webber said. The district recently sought bids for privatizing transportation services, including bus drivers.”

15) Michigan: Detroit Water Department plans mass shutoffs of service for nonpayment. “A new contractor has been hired to target those who are more than two months behind or who owe more than $150—twice the average monthly bill of $75.” Emergency Manager Kevyn Orr “said he is actively moving ahead with a second plan—selling the city-owned system or leasing it to a private management firm. Orr toldThe Detroit News on Wednesday he will send out requests for information in a couple of weeks or sooner gauging interest from private operators.”

16) New Jersey: AFSCME accuses Warren County freeholders of putting out false propaganda about abuse of sick time to push privatization of the Warren Haven nursing home. “‘Were the freeholders in sunny Florida during all of the snowstorms we endured this year?’ [AFSCME Local 3287 president] Tracy Smith said in the statement. ‘Or is this just another lame attempt by the freeholders to try and redirect the public’s attention from the ineffectiveness of the Warren Haven administrator?’”

17) New Jersey: Hamilton Township school board votes for a budget that will outsource the jobs of 30 custodial workers to a for-profit company, GCA Services. “Carmen Choseed, a Hamilton Township School District custodian and the Hamilton Township Education Association union representative, said she was notified Friday that their contract is expected to end June 30. The board had just settled a three-year contract Feb. 14, she said. ‘We feel disrespected,’ said Choseed, who has been employed by the district since 1998, as a custodian since 2008. ‘Why didn’t they come to us. We would have taken pay cuts. They basically said, “You’re not worth it, and we’re getting rid of you.”‘“

GCA Services, which has entered a consent decree to remedy wide ranging labor law violations in Arizona, is owned by the $39 billion Blackstone Group, co-founded byPete Peterson. Blackstone’s 2013 executive compensation exceeded $106 million.

18) New Jersey: Methuen mayor makes a second attempt to privatize the town’s IT department. “Council Chairman Jamie Atkinson said he planned to set a public hearing once the council receives the proposal from the mayor and hopes to hold a vote by the end of April or early May.” The school department’s IT service may also be privatized.

19) New York: After Orange County lawmakers schedule an April 4 public hearing on the privatization of the Valley View nursing home, the Civil Service Employees Association asks for “marathon” contract negotiations with the county to avert the privatization and possible loss of jobs. “Sabina Shapiro, president of CSEA’s Orange County Unit 7900 and its countywide Local 836, said in a statement, ‘With the future of many important county services in jeopardy, we’re asking Mr. Neuhaus and his staff to meet with us next week and work out an agreement that will allow Orange County employees to continue providing county taxpayers the vital services they currently receive.’ In response, county officials, who must negotiate new contracts with all six employees’ unions, say only that they’ll meet with CSEA on Thursday and again on Friday if necessary.”

20) Maryland: The Purple Line light rail, a full DBFOM “public private partnership,”moves closer to realization as federal environmental approval is given and President Obama recommends partial federal funding for the project in his budget. The deal would likely not proceed if federal funding falls through in budget negotiations.

21) New York/New Jersey: The Port Authority is reconsidering a deal to lease valuable land for $1 to NJ Transit. “NJ Transit has for years been trying to privatize its parking operations. The North Bergen lot, its biggest, is a key part of that. Under the program, NJ Transit would agree to have a private company run the paid parking lot in exchange for a fee. The program, NJ Transit officials have said, would maximize the agency’s profits and help keep bus fares stable. But Port Authority Commissioner David S. Steiner said Tuesday that the Port Authority should get some benefit from the privatization plan, too. ‘It seems to me that if they are going to get money on it, why are we getting only a dollar?’ he asked. Francois said the Port Authority studied the fair market lease rate in 2011. It was $685,000.”

22) Ohio: After a pro-privatization lawmaker backtracks from calling public schools “socialism,” the Cleveland Plain Dealer writes that it was going to call for State Rep. Andrew Brenner’s resignation, but instead urges him to “visit several struggling public schools in Northeast Ohio, talk to parents, teachers, and principals and find out what they really need. We’ll bet that privatizing the system is pretty low on their list.”

23) Pennsylvania: A Philadelphia Inquirer report on an alleged lobbyist-turned undercover operative touches on state liquor privatization.

24) Tennessee: Nashville Metro Council approves the mayor’s plan to outsource the operation of the Bordeaux Long Term Care and Knowles Home Assisted Living facilities to Signature Healthcare. “As for the employees, [At-Large Councilman Jerry] Maynard announced Tuesday that the Service Employees International Union Local 205, which represents thousands of Metro workers, had reached an agreement with Signature.”

25) Texas: Retired educator criticizes an op-ed for misreading data on charter school performance. “I doubt that anyone knows the extent to which charter schools are losing support from public officials, nor whether wealthy conservatives wish to use them as tools to privatize education. I am aware that some charter schools enjoy strong political and financial support from some very wealthy conservatives who have little use for public institutions, such as the Koch brothers and the Bradley Foundation. What concerned me most about the editorial was its treatment of selected results from the Stanford University study.” [Sub required]

26) Virginia: The state has halted construction on the US 460 toll road “public private partnership.” The temporary work stoppage “comes amid concerns over costs, management, oversight and environmental permitting tied to the $1.4 billion project, awarded in late 2012 to US 460 Mobility Partners in a public-private partnership deal pushed by the administration of then-Gov. Bob McDonnell.” US 460 Mobility Partners is a for-profit joint venture of Ferrovial Agroman, S.A. and American Infrastructure. The state DOT is supposed to kick in over $900 million.

27) International: A heated debate over the efficacy of “public private partnerships” breaks out in France after the government exits a PPP concession contract to operate a major hospital, and buys out the stake of the private operator, which was supposed to run the hospital until 2041. “The debate has had a particular focus on the role of PPPs in social infrastructure.” [Sub required]

28) International: Researchers studying primary healthcare delivery in India find “there is no remarkable improvement in the quality of services provided by PPP models.”

29) Revolving Door News: GEO Group recently announced the promotion of David J. Venturella to Senior Vice President, Business Development with oversight of their business and proposal development efforts. Venturella “joined GEO in 2012 with more than 26 years of experience in federal law enforcement operations and business development. In addition to a 22-year career in increasingly senior roles with U.S. Immigration and Customs Enforcement, Mr. Venturella previously served as Vice President of the Homeland Security Business Unit for USIS in Falls Church, Virginia.” USIS is the privatization spinoff that did background checks on Aaron Alexis and Edward Snowden. The U.S. Office of Personnel Management is considering insourcing security clearance checks.

30) Think Tanks: The pro-privatization Reason Foundation publishes the first three sections of its annual Privatization Report, covering air transportation, surface transportation, and transportation finance.

31) Forthcoming Research on Outsourcing Contracts: Kelsey Hogan writes on “Protecting the Public in Public-Private Partnerships,” an analysis of municipal concession contracts. “The few concession contracts that have been implemented, however, have generated considerable controversy. The biggest concern is that these long contracts are sacrificing long-term public interest for short-term economic gain. This Note seeks to evaluate the legal strategies available to governments to ensure that governments who enter into concession contracts are able to adapt to changing circumstances throughout the course of the lease. This Note proposes several strategies that governments can implement through structural, regulatory, and contractual channels in order to maximize long-term adaptability and ensure that public interest is never subordinated to private economic gain.”

Legislative Issues:

1) National: Attorney General Holder backs the U.S. Sentencing Commission’s recommendation on reducing drug sentencing. The Commission’s “star proposal, a response to growing pressures of prison overcrowding in the federal Bureau of Prisons, would change the process judges use to calculate an appropriate sentence for almost 70 percent of drug trafficking offenders in the federal system.” Congress must approve the proposal, but there is resistance: “the National Association of Assistant United States Attorneys (NAAUSA), a group that represents about 1,300 of the DOJ’s 5,600 federal prosecutors, has come out strongly in favor of maintaining the mandatory minimum status quo.” Private prison companies have cited possible sentencing reductions as a risk to their business model.

2) National: The House Panel on Public-Private Partnerships will hold a roundtable tomorrow at 10 am eastern on “Public-Private Partnerships for Water Supply and Treatment.” The event will be livestreamed and includes Dan Sugarman, vice president of United Water, and Mitch Jones, program director of Food & Water Watch.

3) Florida: The state moves toward rapidly expanding its school voucher program, “but with no accountability.” The legislation, which has strong corporate backing and builds on a program developed by Jeb Bush, “is soaring through the House with relative ease despite the fact that Floridians voted overwhelmingly against vouchers to religious schools in 2012. And it is now moving through the Senate as well, where critics are offering testimony decrying the lack of accountability in the bill.”

4) Georgia: Legislature passes bill “that will prevent bus drivers and cafeteria workers employed by school contractors from receiving unemployment insurance benefitsduring summers and Christmas holidays.” Will take effect on January 1 if Gov. Deal signs the bill.

5) Illinois: There are now more than a dozen bills before the legislature to amend the Open Meetings and FOIA laws. [Summary]

6) Kentucky: The $2.6 billion Brent Spence Bridge “public private partnership” project “might not be quite dead yet, but it’s definitely on life support,” the Cincinnati Enquirerreports. “The project was dealt two major setbacks [last] week: Kentucky’s House of Representatives voted to ban tolls for it and legislative leaders yanked $37 million in state money intended for the project.” But Kentucky transportation secretary Mike Hancock holds out hope that the funding will be restored by the state senate.

7) Pennsylvania: Lawmaker proposes compromise legislation to reform the public liquor sales system in the state without privatization. “The bill would give the LCB the ability to control pricing and create ‘stores within stores’ in supermarkets and big-box outlets as well as expand Sunday sales and allow direct shipment of wine. [Rep. Gene DiGirolamo (R)] said the changes would boost LCB profits by $185 million to more than $300 million after the first year.”

8) Utah: On Friday the House concurred with Senate amendments to HB 96, which allows private dollars to fund pre-k education. The bill now goes to the governor for his signature.