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This Week’s Outsourcing Scan 12-19-2016

1) National: In the Public Interest publishes a comprehensive guide on responsible contracting and best practices in municipal waste management outsourcing. The Solid Waste Association of North America says the guide features some helpful advice for local governments. SWANA executive director and CEO David Biderman says, “we agree that waste-related services are critical municipal services that require local governments to take reasonable and appropriate steps to ensure that their interests, and the interests of their residents, are adequately protected. These include provisions that ensure continuity of service, protecting the environment and providing for the health and safety of workers and the communities being served.”

Best Practices in Municipal Waste Contracting
 concludes with a list of “must-haves” regarding municipal control, good management, workforce stability, and environmental protections that policymakers and other stakeholders can use when exploring, evaluating, and negotiating municipal waste contracts. The guide’s best practices include the following and more:

•    Establish the conditions and grounds on which the city may terminate a contract.
•    Outline contractor fines for performance issues or failures.
•    Require the contractor to hire locally and pay the local prevailing wage.
•    Include routing provisions to allow the city to control truck traffic and reduce excess air pollution.

“For this industry and others, we think that government agencies often don’t do a good enough job in contract development and contract management,” said ITPI executive director Donald Cohen. “Developing and managing contracts is hard work. It requires skills to do it right, and it’s costly to do it right. With this guide, we hope that government agencies, both policymakers and policy doers, will follow the tips to help strengthen their contracts.”

2) National: Lee Fang of The Intercept digs into the background of the Trump transition official helping to pick those who will oversee profiteering by the private prison and surveillance industry from a massive deportation program. “The selection of [Lora] Ries as a senior official overseeing the transition at DHS, the agency that includes ICE and border enforcement, means privatized deportation interest groups will have a direct line to the new administration.” Her current employer “is CSRA International, a massive federal information technology contractor that, among other things, sells the GangNet software that underpins gang databases maintained by 13 states, ICE, the FBI and ATF.”

3) National: The water privatization industry is looking to profit from contamination risks such the one that produced the disastrous chemical spill in West Virginia. During an investor presentation by American Water last week, their CEO Susan Story was asked, regarding the outlook for the water privatization market, “is there any happy takeaway from the debacle in West Virginia, in terms of your getting regulatory support for forensic work upstream of your intakes, and just trying to head off something like that?” Story’s response: “Absolutely. The thing with West Virginia is that it’s more, it’s not as much regulatory as it was legislative. The fact is in West Virginia, there were no requirements for reporting for Freedom Industries, to report even to the state, DEP, what was stored in the facilities. That was remedied through legislation that now requires anyone who keeps chemicals, they have to report to the DEP, and we have access to those reports.” [CQ FD Disclosure, American Water Works 2017 Earnings Guidance Presentation and Investor Conference transcript, December 15, 2016 (sub required); American Water’s 2016 investor presentation]

4) National: The Campaign Legal Center has raised questions about a possibly illegal Trump super PAC donation by a wholly-owned subsidiary of the GEO Group. “GEO Group defends the contributions to Rebuilding America Now, arguing they were made through a company subsidiary that doesn’t contract with the federal government.” [CLC Complaint]

5) NationalImmigration and Customs Enforcement signs a contact with CoreCivic to operate 2,016 beds for ICE at the Northeast Ohio Correctional Center. crImmigration says, “despite the common refrain that migrants held on behalf of ICE are not prisoners and are not being confined for purposes of punishment, the NEOCC suggests otherwise. As the Ohio state prison oversight commission put it, the NEOCC ‘is built in a high security design, but it houses low security inmates.’ Curiously, the Ohio commission listed the facility’s maximum capacity at 2,016—the exact number of beds that CoreCivic/CCA says it will provide ICE. This suggests that the company plans either to expand its capacity or, if ICE chooses, replace all of its current inmates with ICE prisoners.”

6) NationalThe New York Times reports that Trump’s influential son-in-law, Jared Kushner, told an event hosted by the Partnership for New York City that the president-elect’s infrastructure plan will be closer to that of the Democrats, who want lots of direct public federal spending, than to Republic Senate leader Mitch McConnell’s. McConnell groused last week that the $1 trillion target was extravagant. “Democrats have long said they want an infrastructure plan that has plentiful direct federal funding, something Mr. Schumer has said repeatedly, not tax credits for rich developers. This does not excite Mr. McConnell who, like most Republicans, recalls President Obama’s early stimulus plan unfavorably.”

7) National: The infrastructure investment community appears divided on the ramifications of Donald Trump’s election victory: “While one fund manager reckoned the President-elect’s arrival in the Oval Office would herald a new ‘Pax Americana’, some clean energy investors did not seem quite ready to make peace with the looming prospect of a climate-skeptic presidency. (…) While energy, the historic engine of U.S. infrastructure investment, was still expected to roar along in the years to come, the audience conveyed unprecedented hope that the port, airport and road sectors would finally take off. Stars were also seen to be aligning to facilitate projects, thanks to changes in the tax code and better publicity given to PPPs.” [Sub required]

8) NationalPrivate equity gets ready to move into infrastructureThe Wall Street Journal reports that Blackstone is planning to introduce a dedicated infrastructure platform. “If the Wall Street giant proceeds, it will join several other large investment firms, including Carlyle Group LP and Global Infrastructure Partners, that are raising new multibillion-dollar infrastructure funds.  (…) Big investors have committed about $52 billion to private infrastructure funds this year, the highest annual total ever, according to Preqin. The data provider says the amount of ready-to-invest money in such funds exceeds $140 billion. The rush of cash into these funds coincides with the election of Donald Trump, who has promised to boost private investment in U.S. infrastructure. But it is unclear whether the president-elect’s plan to stimulate investment by trimming taxes can help deliver such a result, even with Wall Street sitting on a mountain of money with which to invest.” [Sub required]

Public pension funds are also eyeing the market
. The Pennsylvania Public School Employees’ Retirement System’s board recently committed $100 million to an infra fund, and the Employees Retirement System of Texas committed A$65 million to QIC Global Infrastructure Fund. But the Dallas Police & Fire Pension System is offloading some of its infrastructure assets, “at a time when withdrawals from the pension fund’s Deferred Retirement Option Plan are skyrocketing.”

9) National: Questions and concerns mount over the Trump administration’s policy on public lands privatization. On the on hand, both Interior Secretary nominee Ryan Zinke and Trump’s son Donald Jr. have expressed opposition to a wholesale selloffThe New York Times reports, “Mr. Trump’s son Donald Jr. quashed a competing candidate, Representative Cathy McMorris Rodgers of Washington State, because of her support for selling off public land, a senior Republican official said.” But on the other hand, Zoë Carpenter writes in The Nation that the coal industry may be given free rein to exploit federal lands: “Trump also campaigned on a promise to ‘unleash’ domestic energy production, and his team in Washington is stacked with oil, gas, and coal interests who have long sought greater access to public lands. On Tuesday, Trump promised to ‘cancel the restrictions on the production of American energy, including shale, oil, natural gas and clean beautiful coal.’ The moratorium on the federal coal leases will probably be one of the first things to go. (…) It’s hard to imagine Trump sending drilling rigs to Yellowstone; the landscape is too iconic, backlash too certain. It’s the lesser known, little-visited public lands that are most at risk for becoming sacrifice zones for fossil-fuel development.”

10) National: Federal inspectors find that a government-run hospital on the Pine Ridge Indian Reservation is in violation of quality of care standards. “The inspection findings are a setback for the agency and raise questions over the efficacy of some of the changes that the agency promised and implemented throughout 2016, including the privatization of emergency rooms at three hospitals and changes in leadership at a regional office based in South Dakota.”

11) NationalThe Intercept’s Janosch Delcker takes us “Inside the Deadly Mississippi Riot That Pushed the Justice Department to Rein In Private Prisons.” Delcker “reached out to former Adams inmates who are now serving time on charges of rioting in a federal correctional facility. Responding in letters in Spanish, several described the unrest as primarily the result of conditions they felt had become increasingly dangerous and intolerable, including medical neglect, excessive use of segregation, spoiled food, a lack of interpreters, and mistreatment by staff.”

12) NationalThe selection of a VA secretary is reportedly roiling the Trump team. ”These guys are like the dog who caught the car,” said Paul Rieckhoff, executive director of Iraq and Afghanistan Veterans of America. ”They suddenly realize how big the machinery really is and that privatization isn’t financially viable. So they are testing names, looking for different ideas.”

13) National: Author Katherine Stewart links school privatization to the drive of the religious right for political dominion. “As Joseph Bast, president of the Heartland Institute, which receives support from a DeVos-funded donor group, explained: ‘Complete privatization of schooling might be desirable, but this objective is politically impossible for the time being. Vouchers are a type of reform that is possible now.’’ The DeVoses well understand that, stripped of specious language about reform and choice, such a plan for public education would be deeply unpopular. In 2002, Mr. DeVos Jr. advised a Heritage Foundation audience that ‘we need to be cautious about talking too much about these activities.’’”

14) National: The GAO has published a report on issues to consider in the discussion on restructuring the air traffic control system. “funding approaches for an ATC entity would depend, in part, on the type of organizational structure chosen, (e.g., public or private ownership), but most experts indicated a user-fee system should be implemented if a change occurred.” But general aviation stakeholders are concerned.

15) California: A Superior Court judge has issued a final ruling blocking the city of Claremont from taking back its water system from a private operator via eminent domain. “In response to the tentative decision, city attorneys argued that the court refused to accept an administrative record containing support for the Resolutions of Necessity, the backbone of the city’s case. In doing this, the city alleged, the court erred in judgement, dismissing a key piece of evidence in the right-to-take trial. But the court refuted this notion, stating that an administrative record is not required in a trial proceeding.” Mayor Sam Pedroza responded to the decision in a 16-page letter (docx file).

16) IndianaU.S. Senator Joe Donnelly (D) opposes the privatization of Medicare. “Every day, across Indiana and our country, millions of seniors rely on Medicare for the quality, affordable health care it provides. More than 1.1 million Hoosiers are enrolled in Medicare today, and thousands more will join in the next few years. It is central to the promise that, after years of hard work, seniors have earned the right to the peace of mind that they will be able to access care. To that end, I have consistently opposed efforts to privatize Medicare. And I will oppose any effort to end Medicare as we know it or turn it into a voucher program in the future.”

17) IndianaA state rebate to the private concession company (ITRCC) that has kept down toll prices on Indiana Toll Road will be expiring in February. “The state agency pays the Indiana Toll Road Concession Co., which leases the 157-mile road from it, a rebate for users of E-Z Pass and compatible electronic transponders. A trip along the entire route costs $4.65 for transponder users driving two-axle vehicles, but $10.50 for cash users, with the state making up the difference. ITRCC is preparing for a Feb. 28 expiration of the program, but hasn’t decided what it will do after that, a company spokeswoman said Thursday.”

18) KansasThe state has renewed its contract with the private companies administering its Medicaid program. “In 2013, Kansas turned over management of its Medicaid program to state subsidiaries of Amerigroup, Centene Corp. and United Healthcare. [Lt. Gov. Jeff Colyer] led the privatization effort.  Colyer said the state will wait until late in 2017 to solicit proposals for new contracts.”

19) MassachusettsMore MBTA privatization battles are on the way, as state transportation secretary Stephanie Pollack points to a McKinsey report. “Pollack said T officials are questioning McKinsey, and that they’re likely to discuss its findings “more publicly” next month. T spokesman Joe Pesaturo declined to release the firm’s full report yesterday, saying officials were still ‘processing’ a Herald request for it.” Among the options are leasing buses and privatizing routes.

20) InternationalJacobin reports on the devastating effect that privatization, or even moves toward privatization, of public services can have on public employees’ mental health. “On October 26, bosses at La Poste announced that all restructuring plans would be suspended to allow for talks with the unions. Their decision was prompted by the publication of an open letter signed by dozens of medical experts, who warned of a ‘rapid deterioration in the state of health of employees’ that is generating dangerous levels of stress and, in some cases, worker suicides.”

21) International/Brazil/USADonald Trump and Michel Temer confer as infrastructure and water tenders loom. “Moreover, in early December, government officials from both countries met to discuss ways of encouraging more US companies to participate in Brazil’s upcoming infrastructure concessions… Concessions are planned in Brazil for airports, highways, railways, port terminals, oil fields, electric power and basic water and sanitation works under the federal government’s Crescer program.” [Sub required]

22) Think Tanks/Massachusetts: The Pioneer Institute, which is funded by the millionaire-backed, right-wing Donors Capital Fund, Roe Foundation, Jaquelin Hume Foundation, and Lovett and Ruth Peters Foundation, issues a report saying Social Security benefits should be taken away from MBTA workers. Last year, the Pioneer Institute’s executive director, James Stergios, was paid $229,661 in compensation.

Legislative Issues

1) National: Opposition to the confirmation of Betsy DeVos as education secretary is growing. The Network for Public Education has created three toolkits to help, and reminds us “our senators are in district offices from 12/17 – 1/2.” They say, “the more we learn, the more we are certain that Betsy DeVos is bad for public schools and for kids. When DeVos has to choose between quality schools and ‘the free market,’ she chooses ‘the free market’ of privatized choice every time. The best interests of children take a back seat. And we know the DeVos endgame–shut down our neighborhood public schools, and replace them with a patchwork of charters, private schools and online learning. We can’t let that happen and we need your help. Present and future generations of children are depending on us to act now. We now know that some Senators have grave doubts. It is our job to make those doubts grow into active resistance to DeVos.”

Writing in The New Yorker about the rhetoric of “choice” that will fill the confirmation debate, Amy Davidson says, “missing in the ideological embrace of choice for choice’s sake is any suggestion of the public school as a public good—as a centering locus for a community and as a shared pillar of the commonweal, in which all citizens have an investment.”

2) National: A battle over federal Medicaid privatization seems on the way as Trump appoints Heritage Foundation policy director Nina Owcharenko to his HHS transition team. Heritage “wants privatization at the federal level rather than see Medicaid expansion continue as it has under the Affordable Care Act.” But “Ron Pollack of Families USA said policy must be based on an understanding of Medicaid’s beneficiaries. ‘They are people who have very low incomes, and who do not have disposable income that enables them to purchase health insurance,’ he said. ‘Creating a premium support system that requires low income people to pay out of pocket for premiums that they will find unaffordable is a very cruel hoax.’” [Sub required]

3) National: Several sources are reporting that Hanna Skandera, secretary of education in New Mexico and onetime chairperson of Jeb Bush’s Chiefs for Change is in line for the deputy education secretary post in he Trump administration. A couple of years ago, David Aram Wilson reported on Skandera’s record when he testified again her being named New Mexico education secretary: “No friend of education would neglect, ignore, and disparage the educational needs of New Mexico’s Hispanic, African American, Native American, immigrant, and non English speaking students. In a state that was the first minority-majority state and has the largest minority population per capita, her negative attitude and damaging actions toward these majority populations is astonishing.”

4) IowaLawmakers continue to raise questions about the state’s Medicaid privatization program. “Democratic Sen. Liz Mathis said she was particularly concerned that some providers are reportedly owed hundreds of thousands of dollars. ‘We want to iron out these difficulties and we want to have the best system we can for the people who are the most vulnerable,’ she said. (…) [Also] some expressed reservations about an estimate from DHS that the state is projected to save $118 million during the current budget year for privatizing Medicaid. Democratic Sen. Joe Bolkcom called the figure ‘smoke and mirrors’ because the department did not pinpoint specific areas in the system where savings were achieved.”

5) Pennsylvania: Privatization may be on the way as a result of Republican dominance of the legislature. “Republicans, who hold commanding majorities in both legislative chambers, signaled that they are eyeing radical changes to government, including privatizing services and consolidating state departments. State officials had banked on new revenue this fiscal year from expanding gambling. But legislators have yet to even devise a plan. If they don’t create one, the projected $600 million gap in this year’s $31.5 billion budget will keep growing. (…) [House Majority Leader Dave Reed (R)] made the case for continuing the push to privatize liquor sales and other services, and raised the possibility of routing more government dollars to social-service nonprofits, with stricter auditing of those providers.” The Democratic governor, Tom Wolf, delivers his budget address February 7.

 

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