Privatization vs. Insourcing

Thanks to Kitty Benzar for this link … Below is an excerpt.

The most commonly reported reason for insourcing is inadequate service quality, followed by inadequate cost savings. Using 2002 and 2007 survey data from the International City/County Management Association, researchers examined why city managers decided to bring previously privatized services back in-house. In both years, the top reasons were problems with service quality and lack of cost savings when the service was privatized.

Of the local governments that insourced services, 61% said that the reason was a decline in service quality, while 52% said that there were insufficient cost savings.2 The researcher concluded that citizens prefer local services to be locally controlled and publicly delivered.3
Insourcing is a viable and popular option.

Research shows that from 2002 to 2007, the rates of outsourcing and insourcing among local governments were about equal. 11% of municipalities surveyed contracted out services previously performed by city employees, while 12% took contracted functions back in-house.4 Insourcing has also gained traction in the federal government, as agencies including the Internal Revenue Service, U.S. Army, Department of Homeland Security, and Department of Defense are increasingly bringing contractor jobs back to the public sector to successfully save money and reduce debt.

Insourcing creates good jobs, while saving money.

A recent study by the Project on Government Oversight showed that the federal government pays almost twice for contracted services than what it would cost if public workers performed the same job, even when accounting for the long-term employee benefits of federal workers. The study found that even though many public employees are paid higher salaries and receive better benefits than contractor employees, the lower compensation of the contractor employee was more than offset by the overhead, executive compensation, and profits that the contractor company charged the government.6 By bringing contracted functions back in-house, the government is often able to create good family-supporting jobs, while saving valuable taxpayer funds. For example, when the Department of Homeland Security insourced 200 previously contracted technology jobs, the agency was able to save $27 million that year not by lowering employee pay, but by cutting out the fees that they had to pay the private contractor.

In my experience, the desire to contract is more about ideology than reality. Plus it comes with the creation of separate lobbying needs.. remember Eisenhower and the “military industrial complex”? That’s how I feel about the risk of concessionaires.

I feel like using concessionaires for campgrounds is like being the pastor of a church and sending contractors to your flock’s bedsides when they are dying. When the public is with you camping or at other times, is the time to make a difference and really touch their lives (those folks who own our public lands). Even for kids at the campground be able to say “I want to work for the Forest Service, because they helped us, or I really learned from that ranger talk.. or ..” “I want to work in public service and wear a uniform with history.” All these things are very right-brained, but the important things in life are all that way (love, spirituality, art). Rearranging our lives around the apparently cheapest way to do things, regardless of implications to others, is not a compelling philosophy.

Our former RF would say that the Park Service has that right.. the brand, the uniform, the respect for people .. I would say presence is a sacred act, the most sacred to honor a person.

9 thoughts on “Privatization vs. Insourcing”

  1. I never had any problem with paying federal recreation fees and do so gladly but the vibe I get from some concessionaires is not something I want to experience again. I stopped at such a CG a few years ago to get water. Not knowing how dire a sin it was, I put a small potato chip bag in the trash, since I thought smoky wanted us all to deposit our trash-always. I got a lot of grief for that. The guy was yowling about keeping down costs for “our customers” etc etc. I took it back out and left. But I told him I was astonished since i had been a FS wilderness ranger and thought trash cans were a public good with their use to be encouraged.

    To heck with that… was not private land, it was public land and i prefer a FS CG host with their usual welcoming demeanor.

  2. Besides that, I contracted with the FS for years and the idea that many things can be done better or cheaper with a contractor is complete BS. It was an ideological decision. Some things such as tree planting that need high powered, experienced crews for short durations do call for contracting. But too often contract fire crews may have to sit out most of the season with no income, I think more FS crews is a better deal for many woods workers.

    • Greg: The main problem I have had with USFS crews — including private contractors on USFS fires — is that they are paid for “standby.” Why aren’t they out building firetrail, setting controlled burns, clearing roads and trails, and/or cutting firewood for old people? One huge cost for American taxpayers is for fire people to sit on their butt for days or weeks at a time, waiting for something to start burning or watching it burn after it starts. And in full view of the public. Why can’t they be doing something constructive instead? That’s what the private crews used to do. I know of some local caterers and residents who have been shocked at the amount of “down time” these crews were paid to tend to local wildfires the past few years.

      • I thought that most FS district crews did that kind of work-but perhaps not. The problem is sitting around, and a worse problem is a contract fire fighter who sits around with no pay for anything. They bear the cost of inactivity. I am not sure what can be done about this.

        • Greg: It’s an easy fix. The woods are a mess. Why aren’t these guys out preparing areas for prescribed fire and then lighting them while waiting for wildfire? They’re doing something constructive, they’re getting practice working with fire, they’re getting paid, and they’re reducing the risk and damage of future wildfire events. There’s not real reason for anyone to be sitting around in the summer, unless they work in an office or drive a vehicle. The problem is contract design, and these guys are being used as casual laborers — not skilled employees. (You’re probably right about the fire crews — everybody seems to call them FS Crews no matter the technicalities of the actual employment.)

  3. As it has always been in fire suppression, the more you spend, the more you get the next year. They have, basically, a blank check every year, which may, or may not require raiding other Forest Service funds. Isn’t it odd that the Flame Act is a good law that everyone wants one year, and then repealed, the next year. The best way to convince the public that their tax dollars are being wasted is to compare the costs of suppression over the years. The excuse that more people live in the woods is a moot point, since it is not likely that they will be evicted. This is forest reality, and more people will move into the woods, rather than less, in the near future.

    Also, there are far fewer USFS fire qualified personnel in the woods, these days. People in other departments had fire qualifications and kept their redcards current, year after year. Now, many timber crews don’t have redcards, and don’t carry equipment into the woods. I’m sure my last foreman would insist that we don’t take action, because we have plenty of timber work to do.

    Wildfires are MUCH costlier than just suppression costs, too!

  4. But those private contractor fire crews do not have that work, some may be kept working on other things but many if not most have to sit and wait on a fire. And they are not being paid to wait.

    Those district fire crews paid by the FS were kept busy, outsourcing it made it possible to treat fire fighters as contingent labor.

    I can see the need for some contractor crews, no real problem with that but the way fire fighting has shifted much more to a temp labor force is just another way to screw woods workers. Fire crews are some of the only manual work locals can still do where they are not competing with contractors running “guest” workers who will work for much less.


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