Proposed Michigan Law: In at least one case, the decision to competitively bid more work may be handed down from the legislature: a bill in the Michigan State House would require school districts to bid out food service, custodial, and transportation services.
While the bill, if passed, would doubtless change the landscape for how the state's 551 school districts procure services, many have already delved into privatization to save money (48.8% as of 2010, according a report by the Mackinac Center for Public Policy).
State Mandate vs. Local Control: And the response? Mixed, at least according to Greg Gray, Superintendent of the Brighton Area Schools. Although competitively bidding services saves the district over $2 million a year, Gray is cautious about the proposed legislation's mandate that all Michigan districts competitively bid food, custodial, and transportation services: "I think that's a local district decision... School districts were designed with locally elected officials on the school boards to manage their local issues that are fitting for their community," said Gray.
Concerns: Giving up local control is just one of the concerns that has been voiced about competitive bidding for public services. While advocates of privatization point to lowered costs from companies competing for the low bid, opponents question the costs to set up and operate a competitive bidding process, lack of adequate competition for certain services in some markets, and undue pressure on workers to accept ever lower wages and benefits.
More Privatization in the Future? The issues surrounding privatization are many and complex, but it seems likely that in the current economic climate we will continue to see governments and public agencies examine the transition to more competitive bidding as potential cost-cutting measure.
Mike Purdy's Public Contracting Blog© 2011 by Michael E. Purdy Associates, LLChttp://PublicContracting.blogspot.com
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