Walla Walla County Explores Competitive Bidding

Evergreen Freedom Foundation ^ | 9-29-05 | Victor Joecks

[truth49]

Walla Walla's County Board of Commissioners is now engaged in a Priorities of Government (POG) exercise, asking the question: What is the most efficient way to ensure citizens receive human services? To answer this question, commissioners authorized a study to find out the effects of competitive bidding the Department of Human Services' (DHS) functions to a non-governmental, non-profit entity. The study concluded that without a decrease in service, competitive bidding of DHS services would reduce the size of county government by 46 full-time, benefited employees and 22 part-time and on-call employees. The county also would move from direct to indirect legal liability for the services. Walla Walla County is currently accepting written comments and suggestions on this proposal and will hold a public meeting in the near future.

Geoffrey Segal, director of government reform at Reason Foundation, has worked with several governments to design and implement competitive bidding programs. When asked about Walla Walla County's proposal, Mr. Segal stated:

This country's greatest accomplishments have been driven by competition. It's time that this valuable tool be extended to government. Competition is a proven tool to dramatically improve the quality and lower the costs of providing public services. Competition is rooted in the concept of value, i.e., choosing providers based upon those that demonstrate the best results or benefit for the right price.

While Walla Walla County ponders competitive bidding, legislators should consider a similar process for all state services. Just because a service is determined to be a core function of government does not answer the question of what level of government, if any at all, needs to actually provide the service. Legislators should identify state services that could be provided at the county level and block grant the money for those services based on a performance contract. This would ensure that the money and those responsible for service delivery are as close as possible to those that need them. The state could then provide administrative oversight of the grants while eliminating any restrictions to contracting government services to non-profit and non-governmental entities.

To receive block grant funding, counties could sign a performance contract with the governor and the governor could then submit these agreements to the state legislature in the budget recommendations for ratification. Performance indicators would be written directly into the contracts with the counties. Fiscal and performance audits could then be authorized to guarantee accountability for the state tax dollars. Counties and cities would then be encouraged to follow a similar performance-based contracting model with non-profit or non-governmental agencies.

If outright block grants are not politically feasible, government employees should at least be required to compete against private sector providers for the right to offer services. According to the Democratic Leadership Council's May 7, 2004, edition of Blueprint Magazine, "The fastest way to save money and increase value is to force public institutions to compete. Nobody who doesn't own one thinks a monopoly is good for business. Why should it be any different in the public sector? When Steve Goldsmith was elected mayor of Indianapolis during the last fiscal crisis, he decided to make public agencies bid against private firms for the right to continue delivering public services . . . Within seven years, competition saved Indianapolis more than $120 million."

By structuring state government in an oversight role, versus as a provider of services, different organizations will be able to experiment with new ways of improving services and output. When something does not work, private groups are able to stop the practice or risk losing their contract with the state, but when something does work, other groups will be able to adopt that innovation and spread its practice across the state. With money going directly to the counties on a performance basis to provide services, innovation-killing bureaucracy can be eliminated without losing accountability to taxpayers. This allows those closest to the clients to better and directly serve those in need.

A government that embraces the principles of the free market and the POG budget model will deliver better services at a reduced cost. This is especially true if a company or other level of government closer to the problem (and therefore, the solution) is the one authorized to provide the service, and that private or local entity is held accountable by state officials and, ultimately, taxpayers.

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[bayoung]

This article seems to be misleading to me. If you click on the report the savings is due to outsourcing the work away from county employess.

[HairOfTheDog]

That's not hidden... that was the point of the article.

[jscottdavis_for_48th_district]

Or sitting on those orange city owned trucks smoking cigarettes all day.

This bidding process could indeed make government WORK! Might be effective natiowide.

How about a bidding process for institutions of higher learning to motivate liberal college professors to work instead of their spending the day at anti-war protests.

[Ostlandr]

This is a tough call. If well managed (this is very seldom the case) public sector employees are cheaper and do equally good work as consultants. Private firms must make a profit to stay in business, while government operates 'at cost'. And private companies in my experience are more likely to "cut corners" to increase profits, while government workers don't care how long a job takes or how much it costs- they get it done right. (Again, here good management is needed but most often lacking.)
Every few years, NY state pays for a study on outsourcing. At great cost, the studies each show that it's slightly cheaper to use state employees. And every time, the consultants, etc. line the pockets of the pols and we keep throwing money away.

You also have to be careful when you outsource. These firms will low-ball their bid the first time, even taking a loss. Then, after the government has laid off their employees, sold off the equipment, etc., when the contract comes up for bid again they nail ya.