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This Week’s Outsourcing Scan 2-18-2015

Update: Upcoming Outsourcing Issues. February 18, 2015
 
1) National: New reports focus on fixing federal, state and local contracting problems. In the Public Interest has published a new report on unaccountable contracting in cities and states. ITPI finds that “problems with contract oversight are pervasive,” and provides policy recommendations to tighten up oversight. The Project on Government Oversight (POGO), focusing on federal contracting, proposes “pro-taxpayer contracting reforms.” It recommends that “Congress should amend federal spending transparency laws to include public disclosure of actual copies of each contract, delivery or task order, modification, amendment, other transaction agreement, grant, and lease. Additionally, proposals, solicitations, award decisions and justifications (including all documents related to contracts awarded with less than full and open competition and single-bid contract awards), audits, past performance and responsibility data, and other related government reports should be incorporated into USAspending.gov.”
 
2) National:
Politico looks into the operations of education contractor Pearson, half of whose $8 billion annual sales come from the United States. “Politico examined hundreds of pages of contracts, business plans and email exchanges, as well as tax filings, lobbying reports and marketing materials, in the first comprehensive look at Pearson’s business practices in the United States.” Its investigation “found that Pearson stands to make tens of millions in taxpayer dollars and cuts in student tuition from deals arranged without competitive bids in states from Florida to Texas. The review also found Pearson’s contracts set forth specific performance targets—but don’t penalize the company when it fails to meet those standards. And in the higher ed realm, the contracts give Pearson extensive access to personal student data, with few constraints on how it is used.” Pearson is a funder of Jeb Bush’s Foundation for Excellence in Education, which just appointed former Secretary of State Condoleezza Rice as board chair.
 
3) National: Sixty national organizations form a “grand alliance” to save the U.S. Postal Service. “Even some postal executives have been complicit in the drive toward the destruction of the Postal Service and ultimate privatization: They have slowed mail service, closed community based Post Offices and mail processing facilities, slashed hours of operations, tried ceaselessly to end six-day service as well as door to door delivery, and eliminated hundreds of thousands of living wage jobs.” The Washington Post reports that “two things are prompting the unions and their allies to coalesce. The Postal Service has a new leader, Megan Brennan. And the APWU, which represents 190,000 clerks, truck drivers, mechanics, support employees, and plant and maintenance workers, starts bargaining this week for a new contract. The current five-year pact expires in May.”
 
4) National: The Congressional Research Service has issued a report on legal and other issues involved in evaluating the past performance of Federal contractors. “Although OFPP, in particular, anticipated that agencies would ultimately be able to rely almost exclusively on agency performance evaluations in their source selection decisions, this does not seem to have occurred, as discussed below.”
 
5) National: Public land advocates protest efforts to place federal land under state control, which they fear will be just a prelude to privatization. “At risk is 640 million acres of federal public lands, including national forests and Bureau of Land Management lands, in nine Western states: Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah and Wyoming.”
 
6) National: Truthout’s Brian Dolinar and James Kilgore look into massive overcharging for phone calls from incarcerated people by Securus Technologies. “Can we just round it out and say it’s $20,000?” [Campaign for Prison Phone Justice]
 
7) National: Victoria Collier of the National Election Integrity Coalition looks at citizen mobilizations against water privatization. She says “Public-Public Partnerships (PUPs) are emerging frameworks for preventing corporate takeovers of natural resources and developing non-profit, public-driven solutions for water infrastructure needs.”
 
8) California: San Diego Republican pro-privatization and outsourcing activist Carl DeMaioforms a super PAC.
 
9) Colorado: Teacher Mark Sass says “teachers, and not paid outside contractors, should be leading professional development. All of this means a new and progressive look at how we recognize and compensate teachers. No more one size fits all compensation program.”
 
10) Colorado: Denver releases a request for statements of qualifications to bid on the redevelopment of its airport’s Great Hall. The deadline is April 1.
 
11) Florida: Miami-Dade County will be soliciting qualifications for firms for a “public private partnership” for its jail and court facilities. Voters turned down a public bond issue in November that would have supported the project. “In coming weeks, the County Commission also plans to appoint a task force of experts to recommend the regulations and policies the county needs in order to use P3s on all types of infrastructure. ‘We have a number of opportunities for P3s in Miami-Dade County [but] we don’t really have a clear path to it now,’ Mayor Carlos Alvarez told the board on Feb 3. ‘We need a road map to what is the process.’” [Sub required]
 
12) Georgia: The Department of Transportation selects four teams of companies to design, build and partially finance (DBF) the I-285 and SR 400 Reconstruction Project. An RFP will be issued this month, and a decision is expected by December.
 
13) Indiana: Muncie school officials refuse to tell the public what is in bids by private companies to outsource janitorial, maintenance and food services. “Even though the board has not yet decided whether outsourcing is the best option, a group of food service employees is already banding together to discourage it. The group started a petition, which already had nearly 650 signatures—more than 500 online and more than 140 on paper—as of the school board meeting this past Tuesday.” Prospective bidders include GCA Services, Aramark, Sodexo, Compass Chartwells and others. [Stop the Outsourcing petition by the Muncie Community Support Staff].
 
14) Kentucky/Ohio: The governors of the two states have reached agreement on a plan to allow the $3 billion Brent Spence Bridge project to proceed as a “public private partnership.” Costs and toll revenues would be split evenly. The states’ transportation departments are to come up with a financing plan by the end of this year. “The issue of tolling was also the main reason Governor Beshear blocked P3 enabling legislation last June, by vetoing a bill that would have allowed the public sector to partner with the private sector in delivering transportation projects but specifically banned the use of tolls to fund the construction of a replacement bridge between Ohio and Kentucky.” [Sub required]. Kentucky lawmakers introduced a bill last week that would permit the creation of P3s. “A vote to approve the P3 legislation will not enact tolls on the bridge, but it will allow a P3 to potentially be used on the corridor project.” [HB 443]. The bill “includes a provision that before any such partnerships can be used on a project that involves the state of Ohio specifically, it would require approval of the full General Assembly in a joint resolution.”
 
15) Maryland: Legislative auditors decry a lack of contractor oversight and accountability at the Maryland Transit Administration, and have a made a criminal referral to the Attorney General’s Criminal Investigations Division. “Among the report’s low-lights were a $200,000 no-bid contract awarded by DECO (at the express direction of MTA) to the spouse of an MTA employee (since fired) and $93,000 expended for a non-existent ‘Roads Scholar’ program. Auditors criticized the unchecked growth of the training programs, beginning with a staff of 11 and ballooning 334 percent in dollars spent during four years to as many as 57 persons. They also said the agreements DECO signed were inconsistent with its mission.” [Report]
 
16) Maryland: A report finds that privatizing Montgomery County liquor stores could cost the county $43 million. “The report released Tuesday outlined five possible options for changing the system, ranging from the county completely leaving the alcohol business to keeping the system as is, but adopting ways to make it more efficient and effective. All but one option allow for some private distribution of alcohol in the county.”
 
17) Massachusetts: State education officials turn down all new applications for independent charter schools, “bringing the charter school movement to a screeching halt.” They are recommending approval of two in-district charter schools.
 
18) Massachusetts: The Boston Globe takes a deep dive into longstanding problems with Boston’s transit system, which has had a very bad week because of multiple snowstorms and operational issues. Reporter David Scharfenberg homes in on a central problem: revenue. The public must be willing to pay for what it wants and needs, whether through public or public-private solutions.
 
19) Michigan: Grand Traverse County commissioners are considering outsourcing all county inspections, including soil erosion, building, mechanical, electrical and plumbing. “Commissioner Bob Johnson says he’s open to ‘listening to the presentation’ by AGS, but believes the proposal ‘is not what was originally talked about’ by the board. ‘To me, the better route is to increase user fees (for soil erosion) and close that gap in the general fund,’ Johnson says. ‘You’d have to work hard to convince me right now we can’t fix this in-house.’”
 
20) Michigan: Aramark Correctional Services has been paid over $16.6 million so far this fiscal year by the state.
 
21) New Jersey: Glen Rock school board agrees to hold a public vote on outsourcing the rest of its janitors’ jobs. “No actual costs savings could be provided at the time of the announcement, but we were promised we would be provided with the actual dollar amounts once they were available.”
 
22) North Carolina: Alexandra Forter Sirota, Director of the North Carolina Budget and Tax Center, says misguided tax and other policies have cut deeply into revenue needed for public goods and services. “State policymakers also must consider the long-term costs of proposals to privatize public goods in exchange for quick cash infusions, such as selling off state assets or the rights to toll roads.” [Sub required]
 
23) Ohio: Voters force Brook Park’s pro-privatization mayor to back off from his plans to close a fire station. “Coyne said he would also back off plans to privatize emergency medical services, which would have needed council’s approval.” Councilwoman Jan Powers said “it’s a wonderful day for safety.”
 
24) South Carolina: Angry Columbia residents bombard the city council with objections to the privatization of their water and sewer systems. “‘Companies are accountable to shareholders—not consumers,’ Elaine Cooper told council. Like many in the audience, she wore an anti-privatization badge. Hers said, ‘NO!’ over the image of a water faucet.” Next Monday is the deadline for firms to submit expressions of interest. “In the meantime, council members will meet to rework Plaugh’s resolution in time for the next City Council meeting in March as well as to nominate community members for the citizen review panel.”
 
25) Tennessee: Metro Nashville Public Schools audit pushes for more outsourcing of services to for profit corporations, and warns about the escalating costs of charter schools.
 
26) Texas: Outside contractors continue to bungle highway toll collections and customer service. “Calls from thousands of confused or angry drivers overwhelmed the single call center set up in Austin by vendor Xerox Corp., TxDOT and company officials said, leading to lengthy waits for calls to be answered, then callers being placed on hold until representatives could actually begin to help them. (…) The trouble began under a previous group of vendors, including URS and 3M, who were responsible for billing and collecting toll payments until last July.”
 
27) Virginia: Roanoke school board moves to outsource food services. “Two people who spoke during the public comment period at Tuesday’s school board meeting voiced concerns about outsourcing.”
 
28) Revolving Door News/Indiana: Indiana finance chief Kendra York leaves office for the construction contractor American Structurepoint. York was one of the key financial architects of the East End Crossing of the Ohio River Bridges “public private partnership” project. [Sub required]. Indiana Business Journal reports: “As American Structurepoint President Willis ‘Rick’ Conner noted in a blog post last year, the firm is ‘part of one of the biggest transportation infrastructure P3 projects in the country, the Louisville-Southern Indiana Ohio River Bridges East End Crossing project.’ And the firm expects more states to use P3 financing on public infrastructure, according to Conner’s blog post.” York has received a waiver from the State Ethics Commission.
 
29) Think Tanks/New Jersey:  New Jersey Transportation Commissioner Jamie Fox debunksthe “flawed” research methodology used by the right wing, Koch-backed Reason Foundation to claim that building roads in the state costs $2 million per mile.
 
30) Upcoming Meeting: The Network for Public Education will have its 2015 National Conference in Chicago from April 25-26. Speakers will include Karen Lewis, Randy Weingarten, Jitu Brown, and Diane Ravitch.
 
 
Legislative Issues:
 
1) National: Chances of Congress passing a transportation funding bill by May 31 look slim.The current bill, MAP-21, expires on that day. State road programs would be affected. “Should Congress fail to meet the deadline, [Transportation Secretary] Foxx said his agency will begin notifying states of cash management measures as early as June.” [Sub required]
 
2) National: House Transportation and Infrastructure Committee approves legislation providing for more rail “public private partnerships.” The bill passed committee after Rep. John Mica (R) withdrew an amendment that would have required Amtrak to involve private partners in its Northeast Corridor. H.R. 749, “the Passenger Rail Reform and Investment Act of 2015, would require officials of the National Railroad Passenger Corp. to report within a year of the bill’s passage on ways to enhance development around Amtrak stations, including options for capturing development-related revenue streams. Amtrak would then have to issue requests for proposals from private partners on station development projects within the next six months.” [Sub required]
 
3) National: Republican science subcommittee chair wants to privatize the National Oceanic and Atmospheric Administration and its sub agency, the National Weather Service.
 
4) National: Corrections Corporation of America hires Nashville lobbyist Robert Hobart to lobby for them on budget issues related to the Bureau of Prisons, United States Marshals Service, the Office of the Federal Detention Trustee, and Immigration and Customs Enforcement. Hobart is a former deputy chief of staff to Rep. Zach Wamp.
 
5) National: The National Alliance for Public Charter Schools hires Rep. Tom Cole’s former chief of staff, Pete Kirkham, as its budget lobbyist.
 
6) Michigan: Two bills have been introduced to privatize elements of the Michigan lottery. “The lotto employees handle everything from accounting to regulatory compliance and management to marketing. The bills don’t spell out which of those functions should be outsourced.”
 
7) New York: Andrew Pallotta of United University Professors pushes back against Gov. Cuomo’s proposed budget for allowing private equity investment into public university hospitals. Pallotta points to Massachusetts’ bad experience with allowing private equity into public hospitals. Transparency has been limited and leverage has been loaded onto hospitals to fund payouts to investors. “This legislation allows for the establishment of up to five business corporations, one of which must affiliate with an academic medical institution or teaching hospital (this could be a SUNY hospital).  It also authorizes these corporations to own and operate hospitals, as well as other health care facilities. NYSUT strongly opposes this proposal which if enacted, could set the stage for the closure, or at the very least, the privatization of our SUNY hospitals. This cannot be allowed to happen.” [Study by Massachusetts Nurses Association]
 
8) Ohio: Tougher rules on charter schools get support. Sen. Peggy Lehner (R) “also would like to address questions of who actually owns school property—an issue pending before the Ohio Supreme Court in a case involving charter school operator White Hat Management. She also would like more oversight provisions related to operating companies, some of which are major Republican legislative donors.” Democratic State Senator Debbie Phillips says “it’s a good starting place. It’s a sincere discussion about what we need to do. I think it needs to have more teeth, and I think the sponsors are willing to work with us to strengthen the bill.” But the ranking Democrat on the House Education Committee has called the House bill just “tweaking” and “window dressing.”

9) Pennsylvania: House Republicans will try yet again to privatize the state’s public liquor stores. Past attempts have failed. House Democratic spokesperson Bill Patton opposes the move, saying “with the state facing a large structural budget deficit, it would be foolish to forfeit a valuable, revenue-producing asset like the wine and spirit shops just to get an uncertain amount of one-time revenue.”
 
10) Wisconsin: Gov. Scott Walker “outdoes ALEC” in his budget proposal to waive through charter school approvals.  “These new, private charter school authorizers ‘would have no disclosure obligations, would not be subject to the open records law, and would not be bound by conflict of interest restrictions,’ [Madison School Board member Ed Hughes] wrote. And they could pay their officers whatever they choose to.”