Outside work saves O.C. little
Dealing a blow to the logic of outsourcing government work to private companies, a new Orange County report finds little savings in a $25-million-per-year contract awarded to a firm that manages the county's technology systems.
The report may be the starting point for an effort to bring work back in-house -- which could significantly expand the county workforce -- after decades in which outsourcing was a fashionable concept among fiscal conservatives seeking to shrink government.
The report comes at the urging of the county's largest public employees union, which has been championing the cause of returning more work to government workers. The union would see its power in contract negotiations and political campaigns enhanced with an expanded membership.
The idea is finding some surprising allies on the all-Republican Board of Supervisors, whose members say they want work done at the lowest cost to taxpayers, regardless of who does it.
In examining the county's contract with Dallas-based Affiliated Computer Services Inc., officials found the county saved $700 per year per employee by contracting out the work rather than having county employees do it, while sacrificing control over staff and depth of understanding over county functions.
County Auditor-Controller David Sundstrom, who oversaw the review and heads the county's technology working group committee, said the work was preliminary and would require more examination. No immediate action is expected, and county and labor leaders agree it needs more study.
Figures are inexact, but Orange County spent roughly $520 million in 2005 on outsourced contracts for professional services, about a third of the $1.4 billion spent on salary and benefits for county employees.
Many of those contracts were for specialized work, such as medical services or construction. But Nick Berardino, general manager of the 14,000-member Orange County Employees Assn., said at least some of the work could be performed more cheaply by county employees. He said that could translate to as many as 2,000 government jobs.
Berardino said the report showed that promises of significant savings from a reputedly more efficient private sector were illusory and that many of the contracts were awarded because of political philosophy and influence by lobbyists for companies seeking work.
