The promise of the managed competition program is to maintain service quality at the same time as saving taxpayers money. Both of these promises are questionable.

Some key problems with the program are:

(1) Quality of public services is lost in spin. The public in San Diego has not been given a meaningful way to provide input on services. In fact, quality of services is not defined anywhere. So there is no way for the public to hold elected officials accountable for their actions.

(2) No independent way to validate cost savings for taxpayers. The whole point of this exercise is to save money. But, as we know from the federal contracting practices, the cost of oversight and monitoring is frequently underestimated. Often contracts themselves are poorly written which leads to contractors overcharging the government.

(3) Privatization results in workers losing health insurance. This is especially true for blue collar workers cleaning our streets and trimming our trees. Our analysis shows that the buildings and grounds maintenance industry does an abysmal job of providing health coverage, leaving almost a third of workers completely uninsured. Converting jobs that have healthcare into those do not ultimately cost us all in overcrowded emergency rooms and higher insurance premiums.

(4) Our core capacity to provide public services is weakened. When market conditions change, so that it is no longer profitable to fill potholes, private contractors will pack their bags and leave for Dubai. What is our insurance policy when the city crews who know how to provide the services have been disbanded?

(5) Our public sector employees deserve fair treatment. The guy who picks up your trash every week from your residence, the firefighter who puts his life at risk to save our homes, the librarian who answers our questions with great depth of knowledge. They do their jobs serving San Diego residents with dedication, public spirit, and pride in their work.

The entire process reminds me of Dutch artist M.C. Escher’s depiction of a Penrose staircase “Ascending and Descending.” You can keep people moving infinitely (either up or down) but you never get anywhere.

City’s Privatization Loop

For those candidates touting the program, let me ask a simple question: Which comes first, reengineering or competition? If you can figure that out, send me an email.


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