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This Week’s Outsourcing Scan 11-2-2015

1. National/Colorado: Tomorrow, voters in Jefferson County will decide what Ballotpedia has called the ‘top election to watch‘ in the country—the Jefferson County school board recall/new seat contest pitting public education activists against national big money supporters of school privatization, including the right wing Koch brothers. “The question facing voters is whether to oust a polarizing school board that has championed charter schools, performance-based teacher pay and other education measures supported by conservatives.” Public education advocates have reportedly been outspent 2 to 1. All five board seats are up for election.

2. National: Seeking to diversify its revenue base as the deincarceration movement grows, Corrections Corporation of America (CCA) completes its buyout of Avalon Correctional Services, boosting its entry into the potentially growing ‘niche market’ of residential reentry. “For Nashville-based CCA, the push into the residential reintegration market is aimed in part at expanding relationships with existing clients such as the federal Bureau of Prisons. (…) CCA and Avalon had common clients including the Texas and Oklahoma correction departments and the Bureau of Prisons.”

3. National: The private prison corporations GEO Group and Corrections Corporation of America (CCA) will release their profit reports this week. CCA will release its results after the market closes on Wednesday, and GEO before the market opens on Thursday. Both will hold conference calls.

4. National: The New York Times runs its second major piece looking into private arbitration, “examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court.” Myriam Gilles, a law professor at the Benjamin N. Cardozo School of Law, says “This amounts to the whole-scale privatization of the justice system. Americans are actively being deprived of their rights.’”

5. National: Booz Allen Hamilton, one of the largest government contractors, announces its second quarter fiscal 2016 results. “The company’s emphasis on bid and proposal activities in the first half of the fiscal year contributed to a very strong award quarter with a book-to-bill ratio of 3.49, the highest since the Company became public in 2010, and total backlog of $12.55 billion, the highest in nearly three years.” It also cites as a risk factor to its business, “increased insourcing by various U.S. government agencies due to changes in the definition of ‘inherently governmental’ work, including proposals to limit contractor access to sensitive or classified information and work assignments.” (p. 30)

6. National: Controversy mounts over whether publically-funded charter schools are barring or screening out weakly-performing or difficult students and pushing them back into traditional public schools so they can raise their performance numbers. Charter school partisans and wealthy funders often point to numbers bolstered by such practices to claim their education model is superior to traditional schools. On Friday, the New York Times reported that documents it has uncovered—especially a ‘Got to Go’ list at Success Academies—and interviews with former staffers at Success Academy indicate that critics’ charges are well founded. 

Yesterday the Washington Post reported that “policies of limiting new enrollment to certain grades and times of the year” in high performing public charter schools in the District of Columbia “have been causing their class sizes to dwindle to less than half of their original size by the upper grades,” raising concern that “it’s not fair for publicly funded [charter] schools to have a key advantage in bolstering academic performance that neighborhood schools don’t have: the ability to limit the number of underprepared transfer students they serve while focusing on more stable students who are better able to meet the schools’ higher expectations.”

7. National: A Federal magistrate has ordered Corrections Corporation of America (CCA) “to provide a more adequate response in discovery to an inmate’s request for admission that defendant forces plaintiff to participate in Christianity through mandatory group sessions.” [Original complaintHunter v. Corrections Corporation of America]

8. National: Good Jobs First’s Violation Tracker [see #29 below] reports that Republic Services, a large waste removal contractor, has been assessed $9.8 million in penalties since 2010, including for three OSHA violations this year.

9. National: A P3 consulting firm predicts more colleges will pursue ‘public private partnerships,’ with “a ton of assets” up for grabs. “‘Universities are complicated, vertically integrated operations that are looking to sort through that and bundle or unbundle where there may be pockets of opportunity to add value or create value,’ said [the co-head of PFM’s P3 practice Tom] Morsch. ‘There is a ton of opportunity and there is a ton of assets.’” [Sub required]

10. Arizona: As the GEO Group is awarded a multimillion dollar contract to operate the private prison outside of Kingman, Gov. Ducey allows counties to compete against for-profit prison companies to house state inmates. Arizona Republic columnist Laurie Roberts writes, “I’m guessing the multi-millionaire who runs the GEO Group must have compromising pictures of some of our leading lights in his hip pocket. Either that, or a fair amount of money to dole out in campaign contributions. How else do you explain the state’s latest embrace of the Florida-based private prison company?”

11. California: An L.A. county judge has issued a temporary restraining order against a charter school chain—Alliance College-Ready Public schools—prohibiting it from interfering with union organizing rights by charter school teachers. Two of the union leader’s complaints will he heard today. Los Angeles Times coverage of the issue is being partly funded “by the Baxter Family Foundation. Frank Baxter sits on the Alliance board of directors. The Broad Foundation and the California Community Foundation also provide financial support for Education Matters.”

12. California: The Richmond Community Foundation is considering a ‘social impact bond‘ to purchase and rehabilitate vacant homes for sale to qualified first-time homebuyers. “But while previous SIBs have been basically just loans from investors to municipalities, the Richmond transaction will be bonds with a 0% coupon, [foundation president Jim] Becker said. ‘Ours is the first one that is a modified revenue bond. If we can make it work, we plan to issue more, maybe in year two or three.’”

13. California: The contractor that runs San Diego’s ambulance service, Rural Metro, has been sold to a rival, American Medical Response. “Rural Metro has provided ambulance service in San Diego since 1997 without a competitive bidding process. City officials approved a new five-year no-bid contract in June. The company was fined $230,000 [last] month for failing to meet response times required in the contract—arriving at emergency scenes within 12 minutes 90 percent of the time, and within 15 and 30 minutes for less serious incidents—from July to September.”

14. Louisiana: ‘Public private partnership’ hospitals consortium pushes back against calls for its contract with the state be renegotiated. Department of Health and Hospitals Secretary Kathy Kliebert, who testified to the Senate Finance committee last week, said “it’s all about trying to get the system in a place to adequately fund the services we need. You need to restructure to make sure you are paying for quantity and quality of services.”

15. Michigan: The Department of Transportation has released a request for letters of interest for a DBFOM ‘public private partnership’ for the state’s 165 pumping stations. “MDOT would maintain ownership of the assets throughout the life of any P3 contract. Other active stakeholders would include county drain commissioners, counties, cities and power supply companies among others not explicitly listed in the documents. While DBFOM is the suggested contract model, MDOT said it would be open to other contractual arrangements as well.” Responses are due Nov. 24. [Sub required]

16. Minnesota: In the Public Interest’s Donald Cohen delves into growing opposition to the state’s funding the reopening of Correction Corporation of America’s (CCA’s) currently-shuttered Appleton prison by leasing the facility. Such deals feed into corporate pressure to boost incarceration numbers. “It’s no accident that CCA wants Minnesota taxpayers to foot the bill to reopen Prairie Correctional Facility,” Cohen writes. “Once operational, the facility could hold up to 1,600 prisoners, which would leave over a thousand open beds beyond Minnesota’s needs. CCA actively markets open beds to state and local governments across state lines as an opportunity to ease overcrowding. As of late 2013, 10,500 prisoners were housed outside of their home states in for-profit prisons. This practice incentivizes more incarceration within and across state lines—with beds to fill and profits to be made, a publicly traded company like CCA will work hard to fill them.”

17. MinnesotaStreet privatization is coming come to roost. Privatized streets are taking a big bite out of homeowners’ wallets, leading them to call for a public takeover. “For residents, private streets offer seclusion and a lower upfront price tag. For developers, they’re an opportunity to build without municipal costs and design constraints. But homeowners in Rosemount and elsewhere, faced with road maintenance costs that will only rise as streets age, are asking local officials to make their streets public. That transition, however, may not be easy. Private streets often skirt city codes—using thinner asphalt, for example, or providing less right of way—so integrating them into a public network can be tricky, said John Bradford, Woodbury’s city engineer. ‘It really poses a maintenance burden on the rest of the taxpayers in the community to take those over,’ he said.”

18. New HampshireOutsourcing opponent Donald T. Jean throws his hat into the ring as a write-in candidate for tomorrow’s Board of Education elections in Nashua. He says “hiring a for profit contractor and distancing the B.O.E. from accountability is reckless, foolhardy and opens the city to expensive lawsuits.”

19. New York: The MTA Board forwards its five year, $29 billion capital plan to Albany. “According to board member Jonathan Ballan from Westchester County, new ways of doing business, such as public-private partnerships, could usher in an era of innovation at one of the nation’s oldest transit systems. ‘We could be in for some very exciting times at the MTA,’ he said.” [Sub required]

20. North Carolina: The Raleigh News Observer breaks a major story about possible corruption at the highest state levels in the process of privatizing prison maintenance services. An FBI investigation has reportedly begun. “Last fall, Gov. Pat McCrory personally intervened on behalf of a friend and major political donor who wanted to renew $3 million in private prison contracts over the objections of McCrory’s top prison officials, records and interviews show.” Secretary of Public Safety Frank Perry’s office “sent a letter to Keith’s company on Oct. 19 saying that the state will take over all maintenance on Jan. 1, 2016. The letter does not state a reason; Perry said in an interview that if privatization was really saving so much money, ‘they should have them all. If not, it should be zero.’” Charlotte Magazine’s Greg Lacour writes that McCrory’s privatization deal has “the distinct smell of genuine quid-pro-quo corruption.”

21. North Carolina: Chris Fitzsimon, the director of N.C. Policy Watch, looks at the state’s online charter schools in the wake of a critical CREDO report on them nationally. “The majority of middle and elementary school charters and almost half of the online high schools expect parents to be active part of the teaching, not just answer questions or help with homework. That’s not always possible, and the study finds that ‘maintaining student engagement in this environment of limited student-teacher interaction is considered the greatest challenge by far.’ That’s probably why the two virtual charter companies operating in North Carolina convinced the State Board of Education to approve a policy allowing the schools to avoid recording daily attendance or reporting it to the state.”

22. Ohio: Gov. Kasich signs a charter school reform bill into law, capping a hard fought, years-long campaign by public education advocates demanding accountability and transparency from the for-profit education sector in the teeth of well-financed industry and political resistance. “The law demands more public accountability from school sponsors, seeks to eliminate conflicts of interest in operating the for-profit schools and creates more tools to address school shortcomings.”

23. Oklahoma: The Oklahoma Health Care Authority is exploring privatizing care of the aged and disabled. “The state tried that once before, and it didn’t work out. Costs escalated, companies dropped out, and the state pulled the plug. Supporters of the new effort predicted it might turn out better because of improvements in managed-care practices. Even if it does, however, advocates of the aged, blind and disabled said a new managed-care program could be highly disruptive for thousands of impaired Oklahomans who might be forced to switch doctors and adapt to new care regimens.”

24. Oregon: The grocery industry has renewed its drive to privatize liquor sales in the state. “One of their major political issues was that Washington voters privatized liquor sales starting in June of 2012, and studies show it has tended to increase—not lower—prices.  In large part, that’s because the privatization initiative included taxes aimed at producing as much revenue as the state made when it acted as the state’s sole liquor retailer. This time, the Northwest Grocery Association is proposing an initiative that leaves it up to the Legislature to decide how to tax liquor.”

25. TennesseeWorkers protest Gov. Haslam’s drive to privatize facilities management at state buildings. “The fact Haslam and the administration don’t want to publicly release emails tied to the privatization plan, discourage employees from discussing the plan in public emails and have already created a potential timeline for expansion means Haslam is hiding something, said [United Campus Workers] spokesman Thomas Walker.”

26. Virginia: In an update to its regular reports, the state’s P3 Office has identified seven potential projects that may be financed as ‘public private partnerships,’ and eight conceptual projects “that could be advanced as P3s once the scope of each has been established.” The project list has been expanded beyond transportation for the first time. “The seven projects identified as potential P3 candidates include two road projects in the Hampton Roads area, a proposal to replace the 36,000 lights along interstate highways with energy-efficient LEDs, and advertising on state-owned buildings, vehicles, and facilities.” The final report will be published in December. [Sub required]

27. InternationalA ‘fire sale’ of shares in Ontario’s Hydro One power system draws widespread denunciation, including by Ontario’s non-partisan financial accountability officer. The Toronto Sun says the IPO was “for a quick fix of cash in a desperate bid to balance the province’s budget by 2017-2018, despite the fact it will damage the province’s long-term finances and increase its debt load.” [Budget watchdog report]

28. International: Human Rights Watch urges Brazil to learn for U.S. mistakes when it comes to privatizing prisons. “Some Brazilian politicians argue for the privatization of prisons as the solution to the country’s prison crisis. But that measure will do nothing to address the key problem in Brazil: the excessive and ever-growing rate of incarceration. On the contrary, privatizing prisons adds the profit motive to the mix, which may make reform more difficult.”

29. Think TanksGood Jobs First’s corporate misconduct database goes live. “The database includes 100,000 cases with penalties of $5,000 or more initiated by the Environmental Protection Agency, the Occupational Safety & Health Administration and 11 other agencies, including cases referred to the Justice Department. Additional violation categories will be added later.” Database findings include that “of the 100 largest federal contractors, ten are among the 100 most penalized firms.” Good Jobs First’s Phil Mattera says “the fact that so many companies in Violation Tracker are repeat offenders highlights the need for stronger measures to deter corporate recidivists.” [Violation Tracker]

Legislative Issues

1. National: The Congressional Transparency Caucus organizes a bipartisan panel to discuss the need for taxpayer-funded Congressional Research Service formal reports to be made available to the public. “In conjunction with the panel discussion, 22 former CRS researchers sent a letter to Congress in support of free public access to CRS formal reports. The letter scrutinized the arguments against allowing public access (as did another letter supported by over 30 organizations including the Project on Government Oversight). Collectively the former staff who signed the letter had more than 500 years of experience at CRS.”

2. National: Sen. James Lankford (R-OK) squawks about delays imposed on hiring contract workers to work at military installations by the ‘inherently governmental’ nature of the process, but is told by Brig. Gen. Mark Johnson, commander of the Oklahoma City Air Logistics Complex at Tinker, “we are talking about how to streamline all the necessary steps of the process, but we need to continually balance that desire to go quickly with the necessity to ensure security of the installation and the workforce.”

3. Iowa: Four Democratic members of the Iowa House’s Oversight Committee will request a November 18 meeting to discuss possible improprieties in the Medicaid privatization process. The issue surfaced in an administrative law hearing considering charges that the bidding process was improper and subject to political influence. The lawmakers “were particularly concerned about emails that show communications while state officials were reviewing company proposals to privatize Medicaid between Michael Bousselot, Gov. Terry Branstad’s current chief of staff, who was his policy director and legal counsel at the time, and former Reps. Rants and Renee Schulte, R-Cedar Rapids, who now work for WellCare.”

4. Pennsylvania: The Lehigh Valley Express Times says the new CREDO report shows that Pennsylvania “must demand accountability from cyber charter schools.” The editorial says Pennsylvania lawmakers “should use this opportunity to adopt reform legislation—even as school districts and charters struggle under the financial pressures of a fourth-month budget standoff between Gov. Tom Wolf and legislative leaders.”

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