Café San Diego

A Failure Waiting to Happen

Published: Monday, April 28, 2008 2:50 PM PDT



It is fashionable in the electoral world of spin to present privatization in a reformist sort of way. Managed competition, competitive sourcing and competitive procurement are all euphemisms to drowning government in a bathtub. Unfortunately no matter how much you spin this one, you end up at the same point, dizzy and duped.

The Competitive Sourcing initiative was initiated by the Bush administration in spring 2001, with the claim that "subjecting in-house operations to competition consistently generates cost savings -- anywhere from 10-40 percent on average. ... Historically, savings have far outweighed costs associated with competition." The White House also claimed that competitive sourcing was "a fair and effective tool for improving the delivery of services to our citizens."

Similar claims are continuing to be made in San Diego.

The White House ignored critics that the program was doomed to fail because of poor track record in service contracting. Professor Steven Schooner of George Washington University wrote:

The Government simply lacks sufficient qualified acquisition, contract management, and quality control personnel to handle the outsourcing burden. Because the Government is ill-positioned to successfully out-source in a manner that generates higher quality services, lower prices, greater efficiency, or, ultimately, better government, an aggressive outsourcing policy will further expose long-standing problems in service contracting, including poor planning, inadequately defined requirements, insufficient price evaluation, and lax oversight of contractor performance.


The Government Accountability Office has now found that the administration has overstated the savings from some competitions by undercounting the costs of running them.

Collectively, they cost $225 million, or about $4,800 per job, according to White House figures. And there is little evidence of service quality or performance. This led to the Washington Post reporting last week that the Bush administration’s signature competitive sourcing program has failed on several fronts, and demoralized the entire workforce.

The poster-child of competitive sourcing failures is the U.S. Army’s Walter Reed hospital. According to a letter written by Garrison Commander Peter Garibaldi leaked to the Army Times, push to privatize DoD services is not new:

"But the push to privatize support services there accelerated under President Bush's 'competitive sourcing’ initiative, which was launched in 2002."


The hospital went through a long process of competing civilians position. Despite findings that it was cheaper to do the work in-house, IAP Worldwide Service (run by a former Halliburton executive), was awarded a $120 million contract to run portions of the hospital’s services called facilities management. Immediately after, the 300 public workers doing facilities management were reduced to 50 privately employees. This move, according to army commanders left the facilities unmanned leading to the scandal that made national news:

When the wounded combat engineer stands in his shower and looks up, he can see the bathtub on the floor above through a rotted hole. The entire building, constructed between the world wars, often smells like greasy carry-out. Signs of neglect are everywhere: mouse droppings, belly-up cockroaches, stained carpets, cheap mattresses.


The similarities between San Diego and Walter Reed are ominous. The city of San Diego is using the same failed federal policies (like the federal A-76 Circular) as a basis of our local managed competition program to make city workers compete for their jobs against private contractors.

We do not know how much the managed competition program is going to cost. We do not even know how much we spend on private contractors today. We lack quality control procedures to make our unknown list of current private contractors perform well. We lack accountability measures like audits to ensure that taxpayer dollars given to private contractors are not wasted. We demonstrate the same symptoms of poor monitoring, enforcement and cost-controls that led to federal contractor misconduct. And regarding the moral of our employees, to borrow Major General George Wightman’s phrase, the managed competition program has been a "huge destabilizing force" on our city’s workforce.

Drown it in a bathtub, Walter Reed style?

The city will be borrowing directly from the privatization program at Walter Reed. It is using the same federal Circular A-76, the same methods of identifying services, and even some of the same actors in Walter Reed.

The city has selected the Grant Thornton LLP, a management company that advised on Walter Reed privatization, to manage its managed competition program. Not surprisingly, a year after its initial bid, the cost of the contract has already gone up 135 percent.

Newly released city documents show that the program manager for Grant Thornton LLP, Ramon Contreras III, touts Walter Reed among his accomplishments:

US Army Walter Reed - Provided advice and guidance on competitive sourcing methodology to include COMPARE. Walter Reed competed fleet maintenance grounds maintenance, street pavement, custodial services, traffic signal maintenance, environmental engineering, landfill operations, logistics, recreation operations and management and transportation activities encompassing over 500 FTE.



Our candidates need to assure us that they are not turning America’s Finest City into another Walter Reed fiasco.

-- MURTAZA BAXAMUSA




Reader Feedback


Comments are now displayed with the newest at the bottom. Not sure you're seeing all of the comments? Click here:

Comments so far on this story:



1. Get A Clue wrote on April 27, 2008 11:28 PM:
"San Diego had quite an effective competition program before Uberuaga and Ewell dismantled it. It served multiple purposes. It gave management the opportunity to assess the management of the various city programs and to make the program operations as efficient as possible. Once that was done, they were then compared to private sector operations to determine IF the private sector could provide the service more efficiently and, if so, WHY. As with most issues, it really comes down to how well the process is managed and that the approach is balanced: the answers don't reside with the Reason Foundation which exists to propound privatization, nor with the labor unions which reject the value of competition. BUT HERE'S THE BOTTOM LINE: unless starts managing effectively, it won't make any difference how the services are provided."

2. Christopher Hall wrote on April 27, 2008 11:47 PM:
"It sounds to me that one thing they don't tell you is that managing the newly privatized/ outsourced contracts is A LOT of work for the city -- work that is highly specialized and so detailed that it costs the city more to outsource the job then to just do it itself. // Hmmm...Where do they get smart people who know how to track whether the outsourced street/ water job was done to code specs? Do they have people to check up on the jobs, audit the time and materials used, and to track mess ups and lapses? Does the city need to hire new, specialized professional staff to manage the contracts? Who's making sure the taxpayers are getting a better deal on all the different, complex jobs that were outsourced -- I know one thing for certain it ain't this mayor of San Diego!"

3. Ian Trowbridge wrote on April 28, 2008 6:06 AM:
"Murtaza: I think most of us would like to see the city operate more efficiently, but I agree outsourcing is not the way to do it. One important effort to increase efficiency is to upgrade the city's information systems and that is quietly taking place. Eventually all the systems in the city will be state-of-the art and able to talk to each other. Outsourcing blue collar jobs will not save money if trash collection is a typical example. Personal observation indicates that the men and women of this department work extremely hard and effectively."

4. Mark E. Smith wrote on April 28, 2008 7:29 AM:
"Well, you've done it now, Murtaza. You can expect an IRS audit, many unwarranted traffic citations, and a severed horse head in your bed. These are things that everyone knows, but most know better than to say. After all, it isn't as if we have honest elections that would give us a voice in our own local government. Our votes are counted secretly inside optical scanners and a central tabulator and our elections officials believe there is nothing wrong with manipulating the ballots so that any recount will match a fraudulent machine count. Just as with federal elections, in San Diego the candidates that get the popular vote don't get to take office -- we the people aren't trusted with such important decisions. I applaud your courage in speaking out and I dream of the day we will have citizen ownership of transparent participatory democracy. Thank you."

5. Billy Bob Henry wrote on April 28, 2008 8:29 AM:
"While I agree outsourcing can lead to big problems, the current problems we (and every City/County in this state is facing) are the HUGE problems of over paid and over benefited employees. If the employees were making normal wages and benefts then outsourcing would not be on the table, or even neded. But when you have government employees being compensated at 5, 10, 15 and even 20 times more than the private sector for the same education and work experience then you have to outsource-it is that simple."

6. El Cajonian wrote on April 28, 2008 9:28 AM:
"Murtaza: Can you give us some of your thoughts on the way Indianapolis has handled outsourcing and managed competition? From what I have heard, they have done a great job overall and it has really helped turn around the city economically (especially as compared to other municpalilites nearby)...not that everything has been perfect."

7. You're on point wrote on April 28, 2008 9:53 AM:
"Murtaza: How much is costing the city to implement Managed Competition? And how much more oversight, in dollars, will it take to make it run smoothly? When those are take into account, can we expect that outsourcing is still going to be cheaper?"

8. Leanne1 wrote on April 28, 2008 10:41 AM:
"Outsourcing has some big problems. For one thing, if one of our indulged councilmembers wants a little extra thing done (and they always do want to be catered to), contractors won't do it without extra pay (whereas City employees will do it under the heading of "other work as assigned" as part of the regular salary). And contracts run out. A City employee looking forward to 20 years of employment has more of a commitment to doing a job well done than a contractor who can dump the contract in three or four years. City employees are generally not the problem...union leaders may be, managers may be, the council and mayor certainly are, but most (not all) employees are reasonably dedicated (or used to be until it was more advantageous to become retired on the job). Outsourcing will not solve corrupt and/or incompetent leadership."

9. Watcher wrote on April 28, 2008 11:20 AM:
"Who is pushing privitization of local public services hardest? Carl Dimaio. Who gets most of his money from the Bush administration? Carl Dimaio. If San Diego wants its own local version of George W. Bush, vote for DiMaio for city council."

10. Billy Bob Henry wrote on April 28, 2008 11:33 AM:
"If the City woudl mandate NORMAL and REGULAR retirement ages-age 66 for anyone born before 1960, age 67 for anyone born after 1960, and paid NORMAL and REGULAR pensions, like social security, then we would al get along fine and there would be no need to outsource. I do agree that the unions and the elected City leaders have screwed things up so bad that it would take a miracle to get those reforms instituted now. Who wants to retire at the normal age of 67 when you are being allowed to retire at age 50-and then immediatly go to work somewhere else while you pick up a gov pension that pays more then when you worked????????"

11. Sparky wrote on April 28, 2008 11:50 AM:
"WOW!!! Someone finally writes a piece that spells out what is in store for San Diego. Funny that when Carl DeMaio hit town in 2002 this was his mantra. He is the sole reason this idea was placed on the ballot (Scared Politicians) and this is his baby. When he started all of this; these same points were made and seemed to fall upon deft ears. El Cajonian; while the CITY touts successes in Indianapolis; citizens in most parts of the City would dispute the quality of work and services. Professor Schooner has written extensively on this subject and if you read many of his other evaluations and analysis of outsourcing you will understand the concerns and problems with "Public" entities being run by "privately" held companies whose bottom line IS the bottom line."

12. Fran wrote on April 28, 2008 12:33 PM:
"Now I see why Steve Francis wants the mayoral job so badly. He'll be able to get outsourcing contracts just like the friends of Bush and Cheney did."

13. Prop C wrote on April 28, 2008 12:34 PM:
"Who is pushing competition in govenment? SAN DIEGO VOTERS! Only the unions are out of touch with the people. and soon the unions will be out of power."

14. Sparky wrote on April 28, 2008 1:02 PM:
"Want further clue as to where DeMaio is coming from when it comes to "outsourcing"; look no further than his largest contract with the Federal Government; Evaluating "contracts" FOR the Government. How did "Grant Thornton LLP" and Ramon Contreras III get the contract for San Diego? PLEASE people; wake up and start paying attention. This is not about unions, saving money, receiving more efficient services or providing better services. This is an agenda being promulgated by non other than Carl DeMaio. Read his propaganda from 2002, 2003 and 2004. This started in Washington DC and Carl was at the center of the concept and its beginning. It is a failed program that in the end will fail; at what and who's expense? YOURS!!!!!"

15. Captain T wrote on April 28, 2008 1:36 PM:
"OK BBH, where do I start? Which would you prefer to have dragging your loved-one out of a calamity, a 45 year-old or a 66 year-old? Do you want to see Work Comp costs skyrocket? Public Safety jobs require that we get the snot kicked out of us sometimes and we do get hurt, by 55 we're pretty beat up. Now General employees are wiser to stay on until they're older since they get a lower percentage for their years of service and generally don't have the injury rate. Most of us retire reasonable intact and able-bodied, but we're cheaper that way than your alternative. Some have stayed past 60, but their effectiveness goes way down and injuries go way up."

16. Captain T wrote on April 28, 2008 1:37 PM:
"Normal and regular pensions? Who can live on the maximum SS check? I know plenty of people in the private sector who, through discipline and delayed gratification, have retired on income greater than when they were working (NORMAL). They earned it by paying for it (NORMAL) City employees pay for theirs, too (NORMAL). Our system is held up by the IRS as a model to other municipal retirement systems (NOT NORMAL). It's a system much like SS, our contributions balance with the number of retirees (NORMAL). We pay more to that than we would to SS. The taxpayers/employer do match a portion of our contributions (NORMAL). Sounds like you just want everyone to be equal; every broke retiree would be on government subsistence and equally miserable. And YOU think UNIONS are a Socialist construct?!."

17. josil wrote on April 28, 2008 1:45 PM:
"Behind outsourcing lies problems with both civil service and contracting. An expensive civil service would not be a problem if it was easily possible to rid itself of the deadwood instead of circling the wagons, which is what unions do. The major advantage of contractors is not the financial savings, but the fact that they can be dumped for non-performance. Note that SD has combined the worst of both worlds with it's information technology arrangement: expensive, inefficient, and seemingly impossible to be discharged."

18. Fed Up wrote on April 28, 2008 2:23 PM:
"We should listen to correspondent "Sparky's" warnings about Carl DeMaio, whose privatizing/profitee idealogy is the subject of Murtaza Baxamusa's piece. The best choice in District 5 was School Board member Mitz Lee who was shut out by her fellow Republicans for challenging newcomer/carpetbagge Carl DeMaio. So our alternative is George George, a firefighter and longtime resident of the area. I am voting for George George because he's local, because he's a community helper and because he has a wonderful name."

19. Fed Up wrote on April 28, 2008 2:23 PM:
"We should listen to correspondent "Sparky's" warnings about Carl DeMaio, whose privatizing/profitee idealogy is the subject of Murtaza Baxamusa's piece. The best choice in District 5 was School Board member Mitz Lee who was shut out by her fellow Republicans for challenging newcomer/carpetbagge Carl DeMaio. So our alternative is George George, a firefighter and longtime resident of the area. I am voting for George George because he's local, because he's a community helper and because he has a wonderful name."

20. District 5 Voter wrote on April 28, 2008 3:55 PM:
"Mr. Baxamusa, please inform me as to what your suggestion is for this fine city? Keep status quo? Or is there some change that your advocating? Obviously, the current state of affairs (read: "unions controlling city hall") isn't working. I'm not convinced that managed competition is THE solution but it sure beats a billion dollar+ pension deficit. I'm sure most of our city workers do a fantastic job but a lot don't. There's a lot of redundancy and a lack of accountability. Leaders need to learn to say no to the unions but not at the cost of losing fire, police, and infrastructure services. I don't get paid to analyze this stuff so I won't try, but someone out there must have the numbers all laid out. How DO you fix a billion dollar+ pension deficit?"

21. Cheeky wrote on April 28, 2008 4:55 PM:
"Case in point: The City of San Diego outsourced a particular traffic engineering function to private contractors. Now it's difficult to get accurate data from them, the cost has gone up over 100%, and when new contractors take over, any incomplete data is lost in the transition. Someone will definitely benefit from outsourcing city jobs, and it won't be the taxpayers. The media started the process with their "cadillac benefits" smear, which got the privatizing ball rolling. From there it graduated to demands for employee job cuts, layoffs, and more anti-union tactics. Finally, Props B and C were passed with a promise of saving millions of dollars with the competition program. The BPR forced many qualified, competent people to leave for other jobs. The lure of hiring minimum wage employees with no benefits (thru sub-contractors) seems reasonable, until you see the finished product."

22. Jack Griffiths wrote on April 29, 2008 6:34 AM:
"Kuddos to Mr Trowbridge on the macrocosmic view and Sparky, especially, on the microcosmic D5 truths.His posts 11 and 14 hit the nail on the head.All Nat'l politics is, in fact,local,no? Although one may take debate with Murtaza on certain points his presentation is,as always, very well done.This quality and caliber is the Cafe San Diego at its best,imho. Thanks to VOSD."

23. Billy Bob Henry wrote on April 29, 2008 12:57 PM:
"Caaptain T-The San Diego retirement/pension system is held up as a model all right, as a model of disaster and what not to do. The IRS does NOT hold the City pension up as a model, in fact the say we are NOT in compliance with IRS regulations. The City employees pay very little towards their pensions, but get 10-20 times what they would get from Social Security. So we pay MORE into SS and get MUCH LESS than a City pension. As for the being old at age 50 and not wanting to work past that age-hey buddy welcome to the club. I am 47 and I am old and worn out too-but just like everyone else in America I have to make money to pay bills, not mooch off the taxpayers. Your job is not that hard, the vast majority of it (99+%) is "on call"."

24. Billy Bob Henry wrote on April 29, 2008 1:04 PM:
"One last thing Captian T-there IS NOT DB PENSION IN THE PRIVATE SECTOR THAT ALLOWS A PERSON TO RETIRE MAKING MORE THAN WHEN THEY WORKED-so, like all the BSing City employees who make the baloney pie in the sky claims that the private sector have these types of multi million dollar, retire at age 50 and make more then when you worked pensions with nothing more than a GED-we all call you on your scam. It is a flat out lie. There is NO pension in the private sector from ANY company that has a pension where you "retire" at age 50 and make more than when you worked. Sorry. Nuce try. Wont work here. In fact the vast MAJORITY of private sector jobs have neither health insurance nor pension benefits."

25. Captain T wrote on April 30, 2008 7:29 AM:
"BBH, Don't read what I did not write. I never said the people I know had a DB plan. They had stock options and 401(k)s that were matched by their employers along with SS. OR they built and sold businesses. They were self-disciplined; drove modest cars and bought modest homes. Now they live better than they ever did when "working". I applaud them. One never finished college and he's the wealthiest and happiest. So once again you bring the "education should determine income" mantra. Education is good, but it doesn't determine income or intelligence. One question is this: If one firefighter has 2 Master's in O Chem and Public Admin, do they deserve a pension more than a firefighter with a 2-year degree in Fire Science? No, they do the same job. To be continued."

26. Captain T wrote on April 30, 2008 12:07 PM:
"Now try to keep up Billy and I'll use small words. CERS made changes requested by the IRS to reach compliance; they did and the IRS does now refer other muni systems to look at San Diego to see how theirs should look. As to being old and broken down, I'm 49, happy, fit and I like to work. I'm sorry you made a lot of little choices in your life that have left you otherwise. It's not too late; you can start eating better and getting fit. Take a vacation to manage your stress and blood pressure. Yes I care! One of your little choices was your field of employment, sorry if it didn't live up to your expectations or was it another little choice in financial planning? Again, not too late, start a business or get another job that covers your heslth needs. Choices, it's all choices."

27. Captain T wrote on April 30, 2008 12:27 PM:
"As to my job being easy. OK you got me. I enjoy my job. I only spend about 10-20% of my day on emergencies. These can be mundane like a ringing alarm that is nothing, or intensely gory on a high speed traffic accident, or really funny like the couple that got a little too exuberant and injured themselves affectionately. It's the unpredictability that I love and hate. The rest of the day we spend divided up in training for low-frequency/high-r events like vertical rescue and WMD. We do pre-incident planning. (What do we do if.....?) We do fire inspections on local businesses. We get a lot of visitors and enjoy the PR. We buy our own groceries, cook for ourselves and clean up after ouselves since it's our house, 10 days/month. The 24 hours goes faster if we work. I've laughed, cried, been angry and all of it on-duty."

28. Captain T wrote on April 30, 2008 12:45 PM:
"I know I know. You can't quite get your mind around what firefighters do. And it's easier to fill it in with imagination than investigation. I'll really miss some parts of the job when I retire, but I won't miss the sleepless nights, the witnessing of so many deaths, thousands of memories that I wish I didn't have. Don't welcome me to your club, I'd keep working if I had to, but I don't. I won't apologize for the choices that I made that leave me with a happy future, the financial, physical and emotional price notwithstanding. Wow! this is not at all on topic. No matter, I think we're alone in here BBH. Good to have this exchange with you. Stay well and feisty."


Feedback Rules


  • Users may post more than one comment, but should not pose as multiple users. Multiple posts from the same IP address but with a different user name on each will be reviewed to determine whether abuse has occurred.
  • Posts with overly personal attacks or unsubstantiated allegations may be edited or deleted.
  • Please be patient with the posts -- there may be a delay before they appear on the site -- and make sure to enter the code in the "image verification" box.

  • Add Your Comments

    Current Word Count:
    58869dc
       

    A Charter School Rebuttal:

     

    Urban Discovery Academy responds to its critics.

    Friday, May 16, 2008 -- 4:24 pm

    Mayor Must Revisit Bargaining Table:

     

    He’s 'done negotiating,' but he’ll have to meet and confer with unions to get pension on the ballot.

    Friday, May 16, 2008 -- 5:11 pm

    'Inviting Further Litigation':

     

    More on the Bajagua scuttling.

    Friday, May 16, 2008 -- 10:30 am

    Sponsored By

    SURVIVAL IN SAN DIEGO

    Foreclosure Flood Continues:

     

    Filings up 103 percent over the year.

    Wednesday, May 14, 2008 -- 11:33 am

    LETTERS TO THE EDITOR

    Seals vs. People? Why?:

     

    Why are we allowing unreasonable people to demand that we spend money to disturb the seal colony that so many people enjoy visiting?

    Thursday, May 15, 2008 -- 1:58 pm

    CAFÉ SAN DIEGO

    'Fresh Face, Strong Voice and a Clear Eye':

     

    Marti Emerald can bring all of these assets to City Hall.

    Thursday, May 15, 2008 -- 7:50 pm

    COMMENTARY: SLOP

    Atkins' Goes for Housing Post:

     

    So much for it 'never crossing' her mind.

    Friday, May 16, 2008 -- 5:19 pm

    COMMENTARY: RICH TOSCANO

    Employment Goes Positive:

     

    After the first year-over-year decline since 1993, San Diego job growth is back in positive territory.

    Friday, May 16, 2008 -- 4:34 pm

    MOST POPULAR STORIES:

    Sponsored by


    Home About Us Contact Us Copyright Privacy Policy Site Sponsorship
    Copyright © 2008 voiceofsandiego.org. All Rights Reserved. Terms of Use Privacy Statement