Everyone agrees the state of Wisconsin has been wasting tens of millions of dollars outsourcing public projects that could be done in-house more efficiently. Every significant study on the subject agrees. The Legislative Audit Bureau agrees. The Governor’s Commission on Waste, Fraud and Abuse agrees. State agencies and key legislators agree.
So what are the Walker administration and Republican legislators proposing? A new bill that would weaken existing state law that requires agencies to assess in advance the costs versus benefits of outsourcing work.
A bill from Rep. Mark Honadel (R-South Milwaukee) would eliminate the current requirement that projects of $25,000 or more be analyzed in advance to compare costs using state staff versus consultants. Instead, the state Department of Transportation (DOT) would only have to periodically review “the continued appropriateness” of using consultants and submit annual reports to the legislature listing previous outsourcing costs. Under the proposed law, the state would no longer collect real-time data enabling it to quickly identify and prevent waste.
The pending legislation effectively opens the ledgers only after projects are complete, allowing bad outsourcing decisions. And the way DOT defines a bad outsourcing decision would be largely up to the agency. Under Honadel’s bill, DOT would set its own project-assignment ratio between in-house engineers and consultants. This would de-emphasize actual dollar cost comparisons in favor of vague administrative standards.
The current outsourcing review law, 2005 Wisconsin Act 89, affects all state agencies but Honadel’s bill sets looser standards only for DOT — far and away state government’s biggest outsourcer. In 2010 the state spent $308 million on highway engineering projects, nearly two-thirds of it going to consultants.
Moreover, the governor’s office and majority lawmakers clearly have decided to address the issue of admittedly wasteful outsourcing with a bill that primarily addresses the stated preferences of consultants who benefit from outsourcing, rather than the interests of the general public.
After the waste and fraud commission’s findings, DOT began discussing changes to the outsourcing law with the American Council of Engineering Companies of Wisconsin, which represents consultants. Yet, DOT failed to engage the primary source of information on wasteful outsourcing — its own engineering staff.
State engineers oversee all transportation construction projects including outsourced work. The State Engineering Association (SEA), whose members include DOT engineers, has over the past decade produced studies showing just how much money is wasted. SEA testified to the Legislative Audit Committee and the waste and fraud commission, submitting Act 89 reports and analysis that demonstrated past and current wasteful practices.
Those studies bolstered an analysis by DOT itself showing state engineers were at least 18 percent more cost-effective in delivering services than consultants – and that was before cuts made by the Doyle and Walker administrations widened the public-private compensation gap. Meanwhile, outsourcing costs have continued to increase.
Instead of weakening the current law, why not instead deal with the existing evidence of wasteful practices? Indeed, why not strengthen Act 89 to make outsourcing decisions even more transparent? Saving tax dollars is everyone’s issue. If DOT is interested in real solutions, it should involve all stakeholders, not just those who would gain from less transparency.
Outsourcing is sometimes necessary, but it’s foolish to rely entirely on consultants to decide how best to use consultants. Tax dollars spent wisely are what citizens expect – not more special-interest catering.
Source: WisOpinion
