We’ve examined a bunch of claims over the years about privatizing government services, and one of the biggest issues has been a bidding process known as managed competition.
Government employees are basically pitted against private contractors to see who can efficiently provide public services like trash collection or street sweeping. Proponents say the process saves money while opponents often raise concerns about degrading the quality and oversight of public services.
Following our latest Fact Check about managed competition this week, we wanted to take a look back at our other fact checking efforts on the topic and outsourcing, a similar bidding process that only involves private contractors. Here’s a quick summary with links to each analysis, broken down by subject.
Mayor Jerry Sanders
Claim: “We invited private firms to bid on services performed for us by the San Diego Data Processing Corporation, which had a virtual monopoly on our information technology needs — to the tune of $42 million a year,” Sanders said Jan. 13, 2010. Our Rating: Barely True. The nonprofit had a virtual monopoly on IT services because the city created it for that reason.
Claim: “We’ve been able to make [past budget] cuts without dramatically cutting services. We’ve done that by competing out some of the functions like our IT function. Received about a 55 percent reduction in costs by doing that,” Sanders said Feb. 8, 2010. Our Rating: False. Sanders got ahead of himself, claiming savings before his outsourcing proposal had even reached the City Council.
Prop. C Opponents
Claim: Following a November 2006 ballot initiative allowing managed competition, city of San Diego “contracts will go to the largest campaign contributors and their lobbyists,” opponents wrote in materials provided to voters. Our Rating: False. Opponents feared a private takeover of city services, but city employees have won all of the contracts awarded so far.
City Councilman Todd Gloria
Claim: “I heard $27 million [in financial savings from] managed competition. That’s not achievable by July 1, 2011. That would assume that we managed competition out everything in the city that’s possible,” Gloria said Sept. 30, 2010. Our Rating: False. The $27 million figure assumed the city would achieve savings from six to eight city functions — not every possible service that could be put out to bid.
City Councilman and mayoral candidate Carl DeMaio
Claim: “There’s one small competition that the mayor was able to complete just a few weeks ago on the help desk function. … He saved 55 percent, 55 percent cost savings on that one function,” DeMaio said in April 2010. Our Rating: False. DeMaio repeated Sanders’ mistake, touting savings before they had been realized.
Claim: “We came up with a very conservative cost estimate on how much money taxpayers would have been able to save had … city politicians actually listened to the will of the people and implemented competitive bidding,” DeMaio said in June 2010 about his “managed competition clock.” Our Rating: Misleading. DeMaio’s estimate reflected a far more aggressive vision for managed competition than what would have realistically happened.
Claim: “I have outlined ideas that produce budget savings in excess of $90 million annually — and savings that can be achieved in the FY 12 budget,” DeMaio said Oct. 13, 2010. Our Rating: Barely True. The estimated savings attributed to managed competition exceeded the city’s estimates and were unlikely to be realized in the timeframe DeMaio described.
Claim: “One of the 10 conditions included opening Miramar Landfill up to competitive bidding, but here they sit today saying that they’re not willing to support that. My, how things have changed when they’re not trying to get into your wallet. I ask my colleagues to be true to their word. You campaigned for Proposition D and you said you’d open up the landfill to managed competition,” DeMaio said Sept. 26, 2011. Our Rating: False. The 2010 ballot measure, Proposition D, would have increased sales taxes following a series of financial reforms. It didn’t propose using managed competition for the landfill as DeMaio claimed. Instead, the initiative proposed selling the landfill, which the city tried to do.
County Supervisor Pam Slater-Price
Claim: “By partnering with the private sector to provide services we have saved over $390 million,” Slater-Price Feb. 10, 2010. Our Rating: False. About 90 percent of the savings had nothing to do with the managed competition, outsourcing or the private sector.
U-T San Diego, San Diego County Grand Jury
Claim: “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 U-T San Diego editorial board wrote June 6, 2010, based on a report by the county Grand Jury. Our Rating: False. The Grand Jury cited savings from a 16-month period that were actually achieved over an entire decade.
City Attorney Jan Goldsmith
Claim: “Our employees have won I think all the bids,” Goldsmith said June 6, 2012. Our Rating: True. At the time, city employees had won all three bids for street sweeping, publishing and vehicle maintenance.
Keegan Kyle is a news reporter for Voice of San Diego. He writes about local government, creates infographics and handles the Fact Check Blog. What should he write about next?
Please contact him directly at keegan.kyle@voiceofsandiego.org or 619.550.5668. You can also find him on Twitter (@keegankyle) and Facebook.
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