Outsourcing is not a new phenomenon in the business world. Businesses of all sizes enjoy the benefits of focusing on their core expertise while outsourcing non-core functions to other companies. For many large organizations such as hospitals and universities, facilities management and construction management are routinely handled by outside companies. What is new is the recent trend in public organizations outsourcing these functions to private companies.
Currently, public entities often employ large internal departments to oversee the construction and management of sprawling networks of public buildings and other facilities. These systems sometimes struggle to effectively manage public funds and maintain facilities. Broward County Schools came under fire a few years ago for the crumbling state of its infrastructure, failure to keep up with the demands of a growing population, and the ineffectiveness of its expansive bureaucracy.
In 2014, the school system was granted a $800 million bond referendum to repair crumbling infrastructure. As part of the initiative, the school system completely disbanded its facilities and construction management department, terminating almost everyone in the department, and put out bids to outsource the work to a private company.
Broward County is not the only such organization to take similar measures. In June 2017, for example, Palm Beach County announced an agreement with AECOM to oversee its construction management for the next ten years. These arrangements promise significant benefits. Proponents of the approach say that it saves money, is more efficient, and leads to better overall management of public-owned facilities.
The evidence in some cases supports these claims. In 2016, the Tennessee State Government announced that outsourcing its facilities management department has saved the state $35 million annually.
However, critics say that these arrangements provide an opening for abuse and can cause more problems than they solve. Broward County came under fire this August when it announced new delays in repairs and construction. Some say these delays are a sign that Broward County’s outsourcing is not an effective solution to the system’s problems. Other public entities have come under fire for what critics claim are “closed-door” bidding processes and backroom deals.
In our experience, the shift from public management to private outsourcing has, if nothing else, created more movement within the system. Previously, public facilities projects could take years or even decades to reach the bidding process, if ever. Under Broward County School’s new outsourced management, we have been requested to perform AE work much more frequently.
Our hope is that with an open and fair bidding process in place and adequate oversight, more public entities will reap the cost and efficiency savings of private outsourcing, and avoid its pitfalls.
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