Magazine Sneak Peek: The dangerous toll of state privatization

Posted Feb. 19, 2020 by

Two decades of privatization in Ohio state agencies have taken a major toll on public service and made the price of these services soar. In the most recent edition of the union magazine, The Public Employee Quarterly, OCSEA expands on the lengths of privatization in the Ohio Dept. of Transportation and other state agencies that have become way too dependent on a severe cost to state union employees and Ohio taxpayers.

A recent audit called out ODOT for their "privatization dependency" in construction inspection and Information Technology and how it more than doubled the cost of those services. Plus, the more state agencies pay high-priced consultants––instead of hiring full time employees––the less stability there is in state government and the economy overall.

Read the full article below or view the entire Winter 2020 magazine HERE:

The Price of Privatization - It's time to to reduce ODOT dependency on consultants

An Ohio Dept. of Transportation audit released by the Ohio State Auditor in late 2019 confirms what OCSEA has been advocating for decades: Consultants are overpriced and state employees can do the work at a major savings to Ohio taxpayers.

Specifically, the State Auditor report found that ODOT could save taxpayers upwards of $21 million per year if the state agency utilized in-house staff for construction inspection, and that the cost of an outsourced consultant inspector is almost three times the cost of using a state-employed professional to perform the same duties. The Auditor’s report recommendation? “ODOT should deploy qualified internal staff before hiring consultant inspectors.”

OCSEA union leaders in ODOT couldn’t agree more.

“It’s not surprising that there’s a potential savings to keeping this work performed in-house by qualified union employees rather than by over-priced consultants. The union has been warning about the dan-gers of privatization for years,” said OCSEA/ODOT Assembly President Sabrina Bell, who represents union members in ODOT. “In every meeting we attend with the agency, we advocate for our members and push ODOT to curb their use of costly consultants.”

The report, released on Dec. 31, 2019, looked at several aspects of cost-savings, including staffing in construction inspection and information technology. The performance audit was required under the state budget that authorized raising the gas tax, which funds Ohio’s construction infrastructure projects.

Privatization has, and continues to plague numerous state agencies and cost taxpayers in a big way. Ohio’s dependency on consultants comes from an ideology by public officials and agency heads that consultants are good and public workers are inferior, not from pragmatism and a sense of true cost-effectiveness. And ODOT is one of the biggest offenders, says OCSEA.

One of ODOT’s largest abuses of consultant use falls in the area of Information Technology, according to the report. But even the audit doesn’t go far enough in terms of the toll these private contractors have taken on taxpayers and workers. According to the union’s own research, ODOT spends more on staff augmentation than it does on total payroll (including wages and benefits) of full-time, permanent IT bargaining unit employees.

The Auditor’s report shows ODOT could save more than $450,000 annually in IT consultant fees by “transitioning long-tenured consultants into a permanent position.” The report also says that the lack of a sufficient system to track consultants (hours, pay per hour and job duties) makes it difficult to evaluate cost-savings and do long-term planning. The union says better tracking would be a start, and would likely substantiate the union’s sentiments: Privatization doesn’t pay.

Systemic contract abuse

The high price of IT contractors is something the union continually brings forward in its statewide IT labor/management meeting. The Joint Information Technology Committee was established under Article 8.05 of the OCSEA/State of Ohio Contract to hammer out issues related to IT work and retention. A reduction in consultant abuse continues to be one of the committee’s top priorities on the union side, but often comes with great push back from management, despite data to prove otherwise.

While the union’s advocacy on the committee has started to lead to reductions in IT privatization in several state agencies over the last two years (e.g., BWC and Public Safety in particular), ODOT remains stead-fast in their use of consultants.

“There’s so much that I could say that this audit hasn’t even drilled far enough down to reveal,” said Chris Uguru, an Information Technology Specialist 2 who has been employed by ODOT for over 30 years.

Chris says ODOT has double downed on IT hiring of consultants over the past decade, as if internal employees don’t have the necessary skills. “But this couldn’t be further from the truth,” said Chris who believes ODOT IT employees are truly hidden gems of talent.

“And the worst part? ODOT continues to invest in consultants, train them and make them leaders over projects. Then they’re out-the-door, on to something new and taking all their expertise with them,” said Chris.

“When I started, I remember the ‘Three R’s: Retrain, Reward, Retain.’ Back then, everyone worked collectively for the common good and there was a pathway for full-time employees to evolve,” she said. “Imagine an environment in which people are truly connected to their work, to their colleagues, and to their customers?”

Sabrina and the union’s ODOT Assembly second this sentiment: “It’s time for ODOT to invest in and build up its state workforce. And, it’s time to let Ohio taxpayers know the real deal on the cost of privatization,” she said.