Is Government Outsourcing Wasteful?


Monday June 16th, 2014   •   Posted by K. Lloyd Billingsley at 7:00am PDT   •  

ct_logo_200We recently noted that California governor Jerry Brown’s 2014-15 budget would result in the overstaffing of Caltrans design and construction departments by about 3,500 full-time employees at a cost of more than $500 million. This comes at a time when, as Dan Walters of the Sacramento Bee observed, a declining workload is “not being matched by a declining staff.” But as Mr. Walters noted, Professional Engineers in California Government, the union representing Caltrans engineers, is adverse to cuts of any kind.

The union wants to keep staff on government payrolls for “shelf projects,” even if there is no money for them. Union boss Cathrina Barros, president of Professional Engineers in California Government, thinks there might be. “There may be new federal assistance on the way,” she explains. “The U.S. Senate has proposed tying the gas tax to inflation, and President Barack Obama recommends increasing federal highway funding by 20 percent per year for the next four years.” But there’s a catch. This is for “shovel ready” projects, and Barros laments that, at this very time, the legislature’s budget analyst recommends cutting Caltrans staff by another 3,500 positions.

The union boss calls this “irresponsible” and wants the state the keep those government workers because federal dollars may be flowing. In her view, government employees should get all the work, and in that cause she trots out a real whopper: “A Caltrans engineer – salary, benefits and overhead – costs the taxpayer $116,000 per year. Outsourcing the same job costs $237,000, primarily because contracts with private firms are awarded without competitive bidding.” If anybody believes that, Caltrans has a bridge to sell you – the one that was $5 billion over budget, ten years late, and still riddled with problems. And just so you know, overstaffing government by 3,500 employees, at a cost of $500 million, is not exactly an example of “competitive bidding.”

Barros is right that the state’s roads are a mess and need fixing, but that is not a call to further featherbed a bloated and irresponsible state agency. Instead the state should abandon the proposed bullet train and apply the funds to highway repair and construction. The state should outsource all this work to the independent (non-government) sector in a process of truly competitive bidding. That is, the work is open to all contractors, including those whose workers are not union members.




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