I was glad to see a small entry in the Indy Star that shows a recognition that private entities do not always perform a function more cost effectively than the government. The example cited is the General Assembly’s decision to perform printing functions in-house rather than continuing to outsource the function. I’ve been citing that one for quite some time now. That cite has a run down of what I was able to find in the minutes of the Legislative Council. From those minutes, it looked like the move in-house was saving about $300,000 per year. The Star report indicates a savings of about $1.1 to $1.5 million for a three year period.
If you look through those legislative council minutes, you can see that Senator Harrison was not a fan of “in-house printing.” My speculation – for which I have no immediate proof – was that Sen. Harrison was friendly with the printer who had the contract and did not want to see the vendor lose the contract. That contract which included composition duties, along with duplication duties, called for a rate of $0.095 per page. By contrast, during the same time period a duplication only contract was going for about $0.02 per page. The big question, therefore, was whether the composition duties could be performed for less than $0.075 per page by government employees. And the answer to that was a resounding, “Yes.”
Now, some privatization advocates might argue that this private vendor just had a sweet heart deal; it was cronyism that made the outsourcing expensive. And there is a point to that. But, I have to ask, if you don’t think government employees can perform even core government functions properly by itself, what makes you think it can competently assign and oversee gazillion dollar contracts. And what makes you think that this current round of privatization will be free of cronyism? Exhibit #1: Gov. Daniels apparently wants to give Mitch Roob’s last employer, ACS, a billion dollars to screen Medicaid eligibility — despite the recent resignation of its CEO and CFO due to being investigated for falsifying the dates on options, a financial shenanigan designed to boost the value of those options.
As Dan Carpenter said, it comes down to faith. And I don’t see that we’ve been given much reason to have it.