Washington Roundtable, Washington Research Council release third paper in Thrive Washington series

State could save money, improve service quality by contracting with private providers

SEATTLE – December 16, 2010 – The Washington Roundtable and Washington Research Council today released the third paper in their Thrive Washington series: The Case for Contracting Out in Washington State.  Recognizing that Washington must pursue more efficient methods of service delivery, this paper calls on state agencies to embrace 2002 legislation enabling them to contract out services.

“The experiences in other states and research over the last decade clearly demonstrate that Washington could save money by hiring private firms to do what they do best – from grounds-keeping to human resources management. This is no longer a novel idea. And it can be done without compromising quality,” said Richard Davis, president of the Washington Research Council.

“To get back to a sustainable budget, the state has to change the way it operates.  Contracting with businesses and nonprofits makes sense. It works across the country. We should be doing it here,” said Steve Mullin, Washington Roundtable president. 

Mullin added, “Despite having specific legislative authorization to use private sector contractors since 2002, virtually nothing has been done. Collective bargaining and administrative complexities have created barriers to efficiency.”

The paper analyzes the experiences other governments – state and local – have had with contracting out and models potential cost savings scenarios for Washington state.   It also examines the hurdles to contracting out in Washington– namely, the structure of state collective bargaining agreements and perceptions of complexity at the agencies.   

The paper includes five recommendations for state policymakers:

• Reform how the state negotiates labor contracts so contracting out authority is not subject to collective bargaining.
• Direct the state auditor to survey all state agencies that provide government services and identify those that could save money through contracting out.
• By the end of 2012, set a goal of identifying savings of 15 percent from the selected agencies.
• Implement a prototype contracting out process for at least five agencies by 2013.
• Create a commission focused on maintaining Washington’s commitment to contracting out.

The Thrive Washington series launched in November with release of Charting a New Course; a paper that made clear why the short-term tactics used to solve previous shortfalls will not work this time.  That paper put forth two guiding principles for transforming the state budget: (1) spending must be set at a sustainable level and (2) a sustainable budget rests on a vibrant economy, the state must do more to improve business conditions.  

The second paper in the series, Nine Steps to Budget Sustainability in Washington state, put forward recommendations to address issues such as: managing the size and compensation of the state workforce, implementing pension reforms, expanding use of the State Efficiency and Restructuring Account, and examining inventory of real property assets for possible sale.  The recommendations urge policymakers to assess the entire budget, clarify all revenues and expenditures, and conduct a thorough review of commitments launched by citizen initiatives with no funding source as well as unfunded programs created by previous legislatures.

Future papers in the series will cover issues including state health care spending, management reform, collective bargaining, employment cost drivers, and more. 

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