7997038195_d2c6451e20_o
SHARETweet about this on TwitterShare on FacebookEmail to someonePrint this page

This Week’s Outsourcing Scan 5-31-2016

1) National: Terry Sambrowski of the National Service Alliance looks at some of the issues involved in outsourcing cleaning services in government buildings. “Some building managers that have outsourced their cleaning say there are also some downsides. For instance, according to Allen Rathey, a cleaning expert with years of experience in the industry, ‘One of the dilemmas…of cleaning being contracted out is that you do not know the people anymore. They knew ‘Joe the Janitor’ [but with cleaners working for a cleaning company] they are all strangers. You lose that sense of community.’ In addition to losing that sense of community or a friend, a bigger dilemma with outsourcing is ‘control.’ When in-house cleaning workers maintain a government facility, they are usually responsible to a manager working for the same government entity. Their performance or lack thereof will be evaluated as it is with any government worker. When working with a contract cleaning company, some of this control is lost. It is replaced by ‘results.’ If government managers do not believe they are getting satisfactory service, the contract typically runs its course with the contractor leaving or in a worst case scenario, the contractor is asked to leave before the end of their contract.”
 
2) National: In a Wall Street Journal op-ed, Anthony Principi, a former secretary of Veterans Affairs, says privatizing is not the answer to the VA’s woes. “We shouldn’t fully privatize veterans care. There are many exceptional people working for the VA, and its health-care system has helped tens of millions of veterans live better lives. But the department needs to focus its health-care and research on issues of particular importance to veterans, such as prosthetics, rehabilitation, spinal-cord injuries, post-traumatic-stress disorder and suicide prevention. Private providers should augment the VA in caring for veterans unable to receive timely care.”
 
3) National/GeorgiaMold infested privatized prisons are allegedly sickening inmates and guards. “Three separate complaints cite the GEO Group, a leading private prison corporation, for alleged mold violations at sites across the country. ‘Mold throughout building,’ reads one occupational complaint regarding a GEO-run state prison in Milledgeville, Georgia. Another complaint against the GEO Group regarding a federal detention center in Texas states: ‘Mold found in housing 2, 3 and file area exposing employees to health issues.’”
 
4) National/CaliforniaThe Bond Buyer looks at some of the issues behind the California Public Employees’ Retirement System’s (CalPERS) purchase of an equity stake in the Indiana Toll Road. “The deal irked some stakeholders, including the Professional Engineers in California Government, who criticized the riskiness of the toll road investment. PECG, the union that represents engineers employed in California state government, is hostile to public-private partnerships that it sees as a threat to its public employee members.” Assembly Bill 2348, which would make such investments easier, is awaiting committee action in the Assembly. [Sub required]
 
5) National/DC/VA/MD: As Washington’s Metro system struggles to cope with safety concerns, chronic outages, and commuter dissatisfaction, Republicans refuse to pony up more funding, drawing criticism from Democrats. Rep. John Mica (R-FL) has threatened to introduce legislation next year to privatize the system. Last week The Washington Posttied the system’s woes to years of underfunding, denouncing Congress for its lack of action and calling for ““Less Carping, More Funding.”
 
6) National: Public finance experts urge governmental entities not to ignore the advantages of tax-exempt financing in an atmosphere where long-term ‘public private partnerships’ are being heavily marketed as magic solutions. “I’ve tried to make it clear that this is not a pot of gold at the end of a rainbow. The private sector is in it to basically make a profit,” said bond attorney Randall Clement of Bryant Miller Olive. Ben Watkins, director of Florida’s Division of Bond Finance, “said he finds fault with the growing use of P3s based on the European DBFOM design-build-finance-operate-maintain model, where a public entity uses a contractual agreement with the private sector to finance, design, construct, operate, and maintain a project. ‘There is no rigorous analysis,’ he said, adding that feasibility assumptions of such P3s are embedded in paperwork done by industry insiders and supporters. ‘The recipient doesn’t care about the cost of financing, they just want the project.’”
 
7) National/International: WikiLeaks releases an October 2015 draft of the professional services annex of the Trade in Services Agreement that is currently being negotiated by international officials. Critics of TiSA said the draft “shows how officials negotiating the Trade in Services Agreement, or TiSA, could force privatization on public institutions around the world.” Mark Langevin, subregional secretary of Public Services International, a coalition of labor unions, says the agreement also would bar government entities from undoing privatization. “Pearson sells a lot of educational services around the world to public school authorities. What happens when a public school authority says ‘We aren’t going to buy these texts anymore? We are going to make our own.’ Under this, they would be sued.” The deal would also cover “schools, water utilities, and similar public sector businesses.” [Draft text]
 
8) Alabama: Letters of Interest for those wishing to start charter schools in the state are due by next Tuesday, June 7. The state Public School Charter Commission may consider an application “in the event an authorizing school system has denied an application to form a public charter school and the applicant chooses to appeal that denial to the commission.”
 
9) Alaska: The state is looking into privatizing some health and juvenile justice services. “The Alaska Department of Health and Social Services on Wednesday put out requests for proposals for studies that would examine privatization of services at the Alaska Psychiatric Institute, four Division of Juvenile Justice facilities across the state, and the pharmacy program at Alaska Pioneer Homes.” The feasibility studies are due by the opening of the next legislative session, January 1.
 
10) ColoradoA charter school is threatening to sue its home district if it doesn’t get more taxpayer money. “MCA wants $600,000 a year, or 15 percent of the $4 million the district collects annually from the mill levy override. Overrides are ballot proposals on which residents agree to pay higher property taxes to provide additional funding to schools. The school is threatening not only to sue the district for future funding, but also for back pay for the previous 17 years, a total approaching $8 million.”
 
11) Florida: A charter school management company, Newpoint Education Partners, pleads not guilty to charges of grand theft, money laundering, and aggravated white collar crime. “It is unclear whether the attorneys represented just Newpoint or the other related companies as well, which are Epiphany Management Group, Red Ignition and School Warehouse.”
 
12) FloridaA family member has filed suit against Corizon, alleging, in part, that “Corizon staffers failed to properly evaluate” her brother, who had mental health issues, “and prescribe him needed medications, and that the sheriff’s office improperly allowed the use of pepper spray” on him. Corizon and the sheriff’s office have denied the charges. “Within a week after Laudadio’s attempted suicide, Corizon administrators noticed something missing in Laudadio’s file: documents showing he had been evaluated before his transfer out of suicide watch.”

13) FloridaFormer state lawmaker Paul Dockery shines a light on Enterprise Florida, the dysfunctional, privatized economic development agency. 91% of the funds of this ‘public private partnership’ come from taxpayers. “Is there a good rate of return on the tens of millions of tax dollars spent? It’s hard to tell. Many of its activities—including deals receiving millions in public funds—are shielded from public-records laws, at least for some period of time. One indication that the program is not meeting its goals is [Gov.] Scott’s attempt to lower the required return on investment criteria. The Florida Legislature expressed concern that EFI was holding on to $140 million of unspent funding that couldn’t be used for other, more immediate needs.”
 
14) Idaho: On closer examination, what seemed like a good idea to build a charter school for “at risk” Caldwell youth may not be appropriate. “The charter reads like an educator’s dream, hitting all the right points—small group instruction, individualized programs, flexibility, productivity, even self-direction. But Cavener points out that the budget calls for only six FTE teachers for an enrollment of 300 students. Can anyone advocate having a single teacher for every 50 at-risk students?” [Idaho’s Promise]
 
15) Louisiana: Charter school teachers and paraprofessionals at the International High School of New Orleans vote to unionize, becoming the third New Orleans charter school to do so in the past few years. “It’s a great day for teachers in the city of New Orleans,” United Teachers of New Orleans President Larry Carter said.
 
16) Maine: The city of Portland will consider privatizing its trash collection and recycling services. “The Kessler Consulting report said a private company would bear the upfront costs of vehicles, equipment and training, but Portland would lose full control over service quality and responsiveness to customers. The report did not ‘perceive a compelling
reason’ to privatize from an operational or cost-saving perspective. The city also would lose employees who double as snowplow operators during the winter.” The city council will hold a workshop to discuss the issue on June 14.
 
17) New MexicoCorizon loses its contract to provide healthcare to 7,000 inmates. “The Santa Fe New Mexican reported recently that, during the bidding process, state officials rejected bids from both Corizon — even though it scored highest on technical grounds—and Wexford, which held the job until 2007. The paper also points out that 200 inmates have filed 150 lawsuits since 2007 that allege various shortcomings in Corizon’s care and that state officials did not regularly audit the company’s operations. Centurion’s contract is for one year, has three one-year renewal options and is worth $41 million.”
 
18) New YorkBuffalo citizens beat back big money from charter school privatizers to regain public control of their school board and education in their city. “donations identified by The Buffalo News underscore the intense interest in this year’s election as well as the organized effort to upset control of the board by ousting members of the majority. And the results reinforce one point: Money can’t buy a seat on the Buffalo School Board. Contributions from the 15 donors who gave at least $1,000 – in most cases to members of the now-outgoing majority – accounted for two-thirds of the money in the race.”
 
19) New YorkNassau County is considering privatizing its sewer system. It has released a Request for Proposals for a financial advisor for the possible ‘public private partnership.’ “‘The county had thought about doing this back in late 2011,’ Eric Naughton, Nassau’s deputy county executive for finance, told Infrastructure Investor in a phone interview on Tuesday. ‘This is actually the third time the county is issuing a formal RFP […] but it’s the first time we have the momentum and support of the board to actually move forward with this RFP process,’ he said, referring to the Financial Control Board that has to approve the county’s contracts. Suez Water Long Island currently operates and manages the system under a 20-year contract that expires in 2035. ‘They would continue to be the operator for whoever chooses to be the concessionaire,’ Naughton said.” [Sub required]. Responses for the “transaction facilitator services” are due next Tuesday, and then another RFP process would be launched for the system itself.
 
20) Tennessee: Major problems have arisen at Corrections Corporation of America’s new Trousdale prison, which has now stopped taking new prisoners. “A memorandum from a state prison official about the privately run Trousdale Turner Correctional Facility says guards there do not have control of the housing units, aren’t counting inmates correctly, and are sending them to solitary confinement for no documented reason.” State Correctional Administrator Tony Howerton’s memo says, regarding solitary confinement, “we still have inmates being placed in segregation with … no explanation as to why they were ever placed in segregation.”
 
21) Tennessee: The Memphis Commercial Appeal says the Shelby County school district was right to close four charter schools for underperformance, but says the rules for closing charter schools should be better defined and regularized.
 
22) Texas: The Austin City Council is likely to consider proposed changes to the codes governing the building of charter schools (land use, construction permits, etc.). “The Austin Independent School District Board of Trustees took its own stab at leveling the playing field between public schools and charter schools. Board members unanimously urged Council to amend the city’s Land Development Code to require nearby open-enrollment charter schools to abide by the same development standards the city requires of AISD.”
 
23) Utah: The Salt Lake Tribune exposes widespread profiteering by management companies from charter schools that are “abdicating administrative and academic functions” to them. “Academica West and Eminent Technical Solutions aren’t simply ground-maintenance companies—they function as the information technology and human resources departments for Ascent Academy and 16 other charter schools, which on paper are their own school districts.” The Tribune reports that “several of Utah’s highest-earning charter companies are owned by or employ current and former state lawmakers and their family members, leading to frequent accusations of bias as legislators direct state resources to school-choice alternatives.” The paper found that the state’s highest-scoring charters don’t outsource administration.
 
24) Think Tanks: Using UK healthcare as a case study, Simon Bishop and Justin Waring of the University of Nottingham have analyzed the frontline dynamics of ‘public private partnerships.’ How the tensions and institutional logics of the public and private sides play out at different levels, how they are “managed” and a “negotiated order” takes shape. Existing research argues against both “simplistic notions of market efficiency, as well as more developed arguments for ‘boundaryless’ networks.” Hybrid organizations are “potentially volatile ‘mixtures’ rather than ‘solutions’, because negotiated settlements remain open to ongoing revision, and tensions in the institutional foundations of hybrids are provisionally settled in view of local contexts of work.” [Becoming Hybrid: The Negotiated Order on the Front Line of Public–Private Partnerships; Sub required]
 
Legislative Issues
 
1) National: J. David Cox, president of the American Federation of Government Employees (AFGE), tells the House Homeland Security Subcommittee on Transportation Security that privatization is not the solution to problems with TSA airport screening. He says the Obama administration’s plan to use airline and airport authority employees to address the problem, “and individual decisions by airport authorities to hire contract workers undermine the ability to realize a permanent solution for current staffing shortages.” Cox points to previous bad experiences with “public private partnerships” and privatization:
 
“Airports in the Screening Partnership Program (SPP) are also experiencing long lines and frustrated passengers. Private security companies are required to follow the same procedures and SAM as airports with federal TSOs. Airports in the Screening Partnership Program have serious problems. TSA ended the contracts at four Montana airports because the screening companies were unable to meet the agency’s requirements for security. Multiple security breaches occurred after Orlando Sanford Airport privatized screening. There is a decline in workforce experience when airports privatize security screening. TSOs want to serve the public as government employees; they do not want their security mission compromised by the for-profit incentives of private contractors.” [NPR report on privatization’s limitations]
 
2) National: A bipartisan group of 31 Senators introduce an amendment to the defense authorization bill to block privatization of base commissaries. “I’m fighting to protect our commissaries because service members and their families deserve the benefits they’ve earned and a government on their side,” said Sen. Barbara Mikulski (D-MD). “Commissaries feed our troops. They help military families stretch their budgets, and they provide jobs to military spouses, teens old enough to work, and military retirees. And commissaries are the military’s most popular earned benefit.”
 
3) Arizona: The Arizona Capital Times looks at the influence of model legislation, including by NCSL, ALEC, and SiX. “But making concrete observations about when and where it’s been used has been practically impossible, Sunlight Foundation’s Emily Shaw said. ‘There’s not been an easily searchable copy of all legislation across the country,’ Shaw said. A new tool could change that. In 2015, the University of Chicago’s Data Science for Social Good Fellowship program developed the Legislative Influence Detector to analyze similar text in bills across the U.S.”
 
4) New York: The Republican chair of the Senate Racing Committee wants to privatize the NY Racing Association and end government oversight of Aqueduct, Belmont and Saratoga. The legislation was introduced a day after the state chamber of commerce demanded privatization. But “a spokesman for the governor said Cuomo saved New York racing from bankruptcy and set up an oversight team that ended years of operating deficits. ‘The governor will ensure the future of NYRA continues this trajectory of success,’ the spokesman said. Cuomo became governor in January 2011, more than two years after the New York Racing Association emerged from bankruptcy.” [Sub required]

 

We’d love to hear from you. Send us an email: info@inthepublicinterest.org.

Want one privatization story (private prisons, infrastructure, education, etc.) a week in your inbox?  Sign up for our email list.