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We have a lot to learn from the horror stories of federal contracting. So I did a search for “business process reengineering” on the federal contracts database maintained by OMB Watch. The federal government has spent over $10 million on consultants doing BPRs. This is not counting the federal defense contracting (which is cryptic). I found that some of the same consultants who do BPRs are also federal contractors performing the federal services (e.g. SAIC, Booz Allen).
So why are BPRs the gateways to privatization? There are two ways that BPRs help in privatizing the public sector:
1. BPRs identify additional functions to privatize: The city has over 3,000 contracts for everything from janitorial services in downtown restrooms to lining the Miramar landfill. Some of this work used to be performed by city employees. We have now turned the corner where the value of contracts exceeds the value of salaries in many departments. And we don’t need to get council input on smaller contracts. For example, on page 65 of the Parks Budget there is a $42 million line item “Supplies and Services” that is not broken down anywhere. We have no details of the service contracts hidden behind this line item. It is higher than the $37 million in “Salaries and Wages,” which are broken down by position. This is testimony to the one-sided transparency in the budget.
If positions are reduced through slow attrition to such an extent that current employees are no longer effective in performing the service, we privatize. This is occurring with the Publishing Services. In other cases, we simply shut down a service, lay people off, and then restore it with a private vendor. This is occurring with the concessions on the reservoirs and lakes.
2. BPRs provide the roadmap to privatize entire departments: This is the Sword of Damocles that hangs over every department. It is the fear of the entire department being axed forever. Employees under constant threat of losing their jobs work in poor morale, as their boss publicly disparages those who work for him.
All the time, the vultures in the private sector circle around politicians who will help them pick off the profitable departments. Loss leaders are common in the private sector — anything that will steal the work away. Furthermore, you take away people’s health care, as is common in the low-wage industries in San Diego, and presto, you save a ton of money.
Mayor Sanders has a poor record in keeping tabs on private contractors. First it was Kroll that over-charged us by $19 million, then it was KPMG, and now it is Esuchanko. In fact, he has no control on awarding contracts to campaign contributors. This taints the Managed (or Damaged) Competition initiative that he championed.