Statement: “Since county supervisors gave purchasing and contracting officials the authority to engage in managed competition and outsourcing in March 2007, the county says it has been able to save hundreds of millions of dollars,” the Union-Tribune editorial board wrote June 6, based on this new report by the county Grand Jury.
Analysis: The Grand Jury issued a report last week that mistakenly summarized how much money San Diego County has saved through managed competition and outsourcing. It cited accurate estimates provided by county officials, but failed to identify the correct time period that the information came from.
Here’s what the Grand Jury wrote:
In March 2007, the San Diego County Board of Supervisors granted the County Director of Purchasing and Contracting expanded authority to enter into contracts to purchase, rent, or lease all personal property for the County and to engage independent contractors to perform services for the County. The Director used this authority to enter managed competition, outsourcing and reverse auction contracts under the ordinance which, together with savings from reengineering, resulted in savings of $678,596,736 for the taxpayers of the County through FY 2008.
The county did expand the authority of its director of purchasing and contracting in March 2007, but that action had nothing to do with the $678,596,736 in estimated savings. That number represents a hodgepodge of estimated savings from managed competition, outsourcing, reverse auction contracts and streamlining between 1998 and 2008.
At no point did the Grand Jury say that the county started calculating its savings in 1998. Its report implied that hundreds of millions of dollars in savings had accumulated between March 2007 and the end of the 2008 fiscal year, a period of 16 months.
Just to be clear, we checked out the county’s records and found that the vast majority of savings came before 2005. Specifically for managed competition and outsourcing, the county reported saving $183 million between 1998 and 2008. Again, much of those savings came before 2005.
But the Union-Tribune’s editorial board used the Grand Jury’s incorrect timeline and derided the city of San Diego for not using managed competition on public services. It touted the Grand Jury’s report as “plain-spoken and instructive.”
In straightforward fashion, the 14-page document laid out the starkly different records of the city and the county. Since San Diego voters adopted Proposition C in November 2006, the city has been unable to execute a single contract under its provisions. Since county supervisors gave purchasing and contracting officials the authority to engage in managed competition and outsourcing in March 2007, the county says it has been able to save hundreds of millions of dollars.
This success is why the grand jury recommended cities and schools districts in San Diego County “study, adopt and/or piggyback on, as appropriate, managed competition, outsourcing, re-engineering and reverse auction programs” used by the county government.
Plainly, San Diego could go a long way toward reducing its endless budget blues if it had been as active as the county on the managed comp/outsourcing front. So why hasn’t the city done so, given that the approach was strongly endorsed by voters four years ago?
When we called Grand Jury Forewoman Victoria Stubblefield about the error, she said, “I stand by what was written in the report. I have no response to give you, to correct or deny.”
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— KEEGAN KYLE