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There’s been some confusion, myself included, whether Mayor Jerry Sanders’ decision to seek bids for a section of the city’s information technology services now provided by city-funded, nonprofit Data Processing Corp. was part of the long-stalled managed competition program.

Managed competition, a signature Sanders program passed by voters in 2006, seeks to subject city services to bidding process that could result in the outsourcing of those services. Not a single service has gone through the process with proponents blaming labor unions and what they’ve called obstructionist City Council members.

Since Data Processing Corp. already has a contract with the city for information technology services — it was spun off from the city in the 1970s — it could have been privatized before managed competition passed.

Sanders, in a seven-minute press conference Tuesday announcing the decision, only used the phrase “managed competition” once, essentially to concede that outsourcing a service like Data Processing Corp. is easier than others.

This will be different because they’re not city employees. We don’t have the same rules of engagement that we do on the managed competition with labor and the council, which has been a sticking point. So this is another agency that’s outside of the city which means we can go ahead and go out for bids on this one.

I asked Mayoral Spokeswoman Rachel Laing for clarification and two think tanks for their reaction. Here’s Laing’s e-mail to me:

Rebidding the city’s data services is not technically managed competition, but it is being done in that same spirit and with the same goal — ensuring taxpayers are getting the best value for their money through a competitive-bidding process.

The reason it’s not technically managed competition is that it is already an outsourced function — outsourced to a corporation that was created by the city to enable IT services to function outside of the civil service rules. This was deemed necessary when the corporation was created (in the late 1970s) because IT workers were scarce, and competition with the private sector was fierce. As a separate nonprofit corporation, (Data Processing Corp.) was able to pay market wages.

Vincent Vasquez, a senior policy analyst at the National University System Institute for Policy Research, said this move could mean the same thing as managed competition to the public.

“I think this gets the ball rolling,” said Vasquez, a managed competition proponent.

Vasquez wondered if a contract with a private company could receive City Council approval. Again, a private contract wouldn’t be managed competition, but it might be seen as a step toward it. Council could be wary of going down that road.

“To the public, this is all part of a general competition, outsourcing program,” he said.

Donald Cohen, executive director of the Center for Policy Initiatives, called the question of whether outsourcing Data Processing Corp. is managed competition, “irrelevant.”

The primary issue for him is the managerial oversight of city services, private or not. That has to come from the Mayor’s Office.

“It’s all about Jerry Sanders wants to outsource things,” Cohen said. “The question is does he want to create high-quality government. If not done right, those two things could be on a collision course.”


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