Los Angeles County today becomes ground zero in a growing battle over privatizing social services, as the Board of Supervisors prepares to sign a $23-million welfare-to-work deal with a corporation whose tactics in acquiring government contracts have come under scrutiny.
The scheduled awarding of the contract to Maximus Inc. of McLean, Va., comes after a year of battle between county unions and a majority of the Board of Supervisors over whether the task of helping San Fernando Valley and north Los Angeles County welfare recipients find work should be done by private or public employees. And while Maximus has come under fire elsewhere in the country for the way it wins public contracts--a New York judge barred the company from receiving $100 million in city contracts there after ruling that the procurement process was "corrupted"--Los Angeles County unions and staff have been accused of rigging bids here to prevent the company from winning a contract.
Beneath the battles over the arcana of public contracting and placement rates lies a deep, divisive question: Should private, for-profit corporations continue to have a role in welfare reform?
"This is the kind of work that should never be contracted out," said Tanya Akel, an analyst with the Service Employees International Union, Local 660, which represents many county workers. "This money that is meant to make people self-sufficient should not be going to stockholders."
Maximus officials disagree. They point to what they say is a proven record in many states of helping more than 100,000 people find jobs after years on the welfare rolls and of running other government programs ranging from child support to enlisting people in Medicaid. County documents predict that the contract with Maximus would save the county $4 million annually.
"Maximus has built its history around helping these populations and working directly with them and changing lives," said company spokeswoman Rachael Rowland. "We're really proud we've changed the lives of more than 2 million people because of work we're doing."
Both sides--the unions and Maximus--are distributing press kits with newspaper clippings either praising or criticizing the rapidly growing company, which a former federal official founded in his basement in 1975 and which now has more than 4,000 employees.
Maximus' literature highlights the government experience of its employees--not just founder and Chief Executive David Mastran but also the local contract manager in Los Angeles, a former manager in the county welfare office.
