Introducing competition to the public sector is an essential part of delivering cost-effective services to taxpayers. What happened earlier this year in Placer County is just one example of how millions of savings can be realized by privatizing a public service. By replacing county employees with a private firm to provide inmate food services to county inmates and juvenile offenders, starting in 2018 Placer County will save over $600,000 per year. Here is how these savings can be realized:
1 – Give Agency Authority to Outsource: Ensure that your agency has the authority to contract for government services. The Placer County Charter has a provision under “general powers” that states as follows: “The Board may contract with an independent contractor to provide any services required of, or performed by, the county if it is more economical to do so.”
2 – Conduct Cost Analysis: Placer County engaged in a comprehensive analysis of the cost and benefit of continuing to use county employees to provide inmate food services vs. using outside private contractors. This process was conducted concurrently with taking bids from qualified contractors.
3 – Enact Resolution and Award Contract: On March 7, 2017 the Placer County Board of Supervisors awarded a five-year, $13.2 million contract with Aramark Correctional Services.
Making changes like this impact existing county employees, but to mitigate this, Placer County obtained an assurance from Aramark that all county employees interested in working with the contractor will be interviewed. In addition, arrangements were made for staff who do not transition to Aramark to receive assistance from the county’s Human Resources department and Business Advantage Network, to provide job training and assist county employees in identifying other job opportunities.
What Placer County has done with inmate food service they can do elsewhere. In early 2016, the county issued a request for proposals to evaluate other service delivery options. By making judicious use of the option to outsource public services to private contractors, public agencies can realize significant direct savings. But merely the deterrence value of the outsourcing option can be valuable for a public agency. When public employee unions know that their employers have the option of turning to a private contractor, they will be more reasonable in their negotiations.
Charter of the County of Placer
Article III General Powers, Sec. 302 Duties, Part (h) Contracting for Services:
“The Board may contract with an independent contractor to provide any services required of, or performed by, the county if it is more economical to do so.”
Press Release – Placer County
“Placer opts to shift inmate food service to private contractor”
Meeting Agenda – Placer County Board of Supervisors
Agenda for March 7th, 2017 Board Meeting including resolution to privatize correctional food services
Memorandum – Placer County Board of Supervisors
Cost analysis of privatizing correctional food services – March 7th