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Contracts should serve public, not private sector
January 27, 2009

In recent years, after Republicans won control of all statewide offices, and then both legislative chambers in 2003, another force has driven the state toward outside contracting, an ideological conviction that the private sector just does things more efficiently than the public — period.

Written by Editorial, The Austin American Statesman

A new series of occasional but in-depth stories about how the state of Texas contracts with private firms or individuals to perform services for the public began in the Austin American-Statesman on Sunday, and it immediately laid out an important problem: No one can document that such contracts have benefited the public, even as the state appears to rely more than ever on them.

The state has signed contracts with private firms to do a wide range of services: build roads, hold prisoners, operate a state park, care for the sick, run computer systems and more. Doing so makes sense if the private sector can perform the same quality service at less cost and without exploiting workers than the state could. And, as the story by reporters Eric Dexheimer and Corrie MacLaggan noted, outside contracting is necessary where the state simply doesn't have the expertise to perform the job, such as writing software programs for computer services.

But in recent years, after Republicans won control of all statewide offices, and then both legislative chambers in 2003, another force has driven the state toward outside contracting, an ideological conviction that the private sector just does things more efficiently than the public — period.

Over the past 10 years, the number of full-time state employees, excluding those at the universities, has dropped 4 percent even as the state budget grew. But from 2003 to 2007, the value of the state's contracts with outside venders rose 55 percent while the state budget rose just 24 percent.

However, the state has not gone about shifting work to outside sources in a systemic way, nor has it implemented any consistent program to determine whether outside contracting has performed as expected and promised.

The headlines, however, have not been encouraging. To name two: Last October, Gov. Rick Perry temporarily stopped an $863 million contract with IBM Corp. to consolidate state computer data centers, affecting 27 state agencies, many of which had complained that they were seeing no benefit. And in December the state finally ended an $899 million contract with Accenture LLP, which had been hired to handle social services enrollment.

Last fall, state Sen. Steve Ogden, R-Bryan, chairman of the Senate Finance Committee, told us that those failures indicated the state needed significant improvement to how it goes about negotiating contracts with outside, private parties. For example, he said, the state could develop job classifications for state employees specifically trained and experienced in writing and overseeing such contracts.

State Rep. Dawnna Dukes, D-Austin, has proposed legislation to require the state auditor to evaluate the cost of any state contract, including any savings, of more than $10 million or that leads to the loss of at least 100 state workers.

As most agree, some state services — law enforcement, for example — should never be contracted out. But those services that are contracted out should provide demonstrable benefits to taxpayers, not just service to an anti-government ideology or to service the bottom lines of corporations and consultants.

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