State Bills Targeting Wasteful Outsourcing Set Goo

Legislators in three states – Nebraska, Vermont and West Virginia – are working to reign in the reckless outsourcing of public services to for-profit corporations and other private entities. The Obama administration needs to follow their lead and remove barriers that keep federal agencies from insourcing work.

In the Public Interest, a national watchdog group that exposes wasteful outsourcing of public services, recently highlighted the work of legislators in the three states to add transparency and accountability to the contracting process. Their efforts would protect taxpayers and put them back in charge of their public services.

In Nebraska, legislation would ban language in outsourcing contracts that guarantees profits regardless of the quality of services rendered. For example, last year In the Public Interest found that 65 percent of state and local private prison contracts include “lockup quotas” – language that mandates prisons be filled to at or near capacity or else taxpayers must pay for empty beds. The Nebraska bill would ban lockup quotas as well as language in other contracts that puts taxpayers on the hook for guaranteeing corporate profits.

In West Virginia, a bill would protect taxpayers in a number of ways: banning any company that has evaded taxes or broken the law from receiving contracts; capping outsourcing contracts to five years; and requiring fair pay and reasonable benefits for private sector workers.

Legislation introduced in Vermont would provide taxpayers with some of the strongest protections in the country against predatory outsourcing, by enabling taxpayers to cancel a contract if the company doesn’t provide promised quality and cost savings.

AFGE has called on the Obama administration to level the playing field between contractors and federal employees. Specifically, AFGE urges the administration to:

  • Free agencies from the Office of Management and Budget’s arbitrary constraints on the size of in-house workforces, so that they can instead manage by budgets and ceilings. If agencies have work to do and money to spend, there is no reason why federal employees cannot be used. Currently, these performance decisions are being dictated by arbitrary workforce caps and cuts.
  • Provide agencies with a long-awaited costing methodology to govern the insourcing process and encourage them to look for opportunities to save money through intelligent insourcing.
  • Direct agencies to expedite compliance with inventories of service contracts and integrate them into budget processes, so agencies have the same control over service contract spending that they have already over federal employee spending and can systematically identify bad contracts or contracts that cost too much.

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