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PSN on May 18, 2006 - 12:03pm
In Indiana, critics are condemning a rushed $1 billion privatization of the states' social services work -- despite the fact that the companies bidding on the contract have mismanaged similar contracts in other states and, more tellingly, no one even bothered to determine whether the companies could do the job cheaper than current state employees:
Lisa Travis, advocacy and education coordinator for the Indiana Institute for Working Families [argues], "we are not aware of any other state doing so much, so fast, and there is no cost-benefits analysis that shows there will be a savings to taxpayers or improvements in services."
Making the deal stink even more? One of the main bidders on the contract, Affilated Computer Services (ACS), is the former employer of Indiana's Family and Social Services Administration Secretary E. Mitchell Roob Jr.
So you have a rushed privatization that may hand a $1 billion contract to the former boss of the agency handling the deal-- with no proof of any savings to the taxpayer.
These kinds of social services privatizations have been plagued with problems in other states. ACS lost part of a Georgia contract two years ago because of mismanagement of processing claims. In Texas, the other bidder for the Indiana deal, Accenture, received a similar $1 billion private contract with similar accusations of insider influence, only to see repeated delays. Kentucky has run into similar charges of corruption in its bidding system for private companies to manage its Medicaid system.
As participants at last week's Corruption in the Statehouses conference discussed last week, one solution to these kinds of corrupt and costly privatization deals are laws like that in Massachusetts which require that privatizations move forward only if studies demonstrate that private corporations can do the job more cheaply than existing government workers -- a commonsense check on corruption of the contracting process which multiple studies show has saves Massachusetts from the typical bilking other states have suffered from privatization. Other states put a range of other restrictions on contracting to hold corporate contractors accountable. See the fact sheet on contracting reform for more.