Haslam administration releases ‘business justification’ for Facilities Management Outsourcing

TSEA March 8, 2016 0
Haslam administration releases ‘business justification’ for Facilities Management Outsourcing

The Haslam administration on Tuesday, March 8 presented to the Senate State and Local Government committee the business justification report for their Facilities Management Outsourcing plan.

The administration claims their FMO plan will save $35.8 million per year without eliminating any jobs or benefits. The majority of their projected cost savings, according to the administration, will come from “self-performance” and “volume discounts.”

The Director of Haslam’s Consumer Focused Government Terry Cowles as reported by the Commercial Appeal told lawmakers and reporters after the hearing the numbers only are “projected potential. This is not definitive and it won’t be definitive until we receive proposals [bids from private contractors], at which point we have actual numbers to work with.”

TSEA, as well as some members of the committee, remain very concerned about this plan.  Chairman Ken Yager and Senator Richard Briggs both said they aren’t hearing any complaints about the service our current state employees provide, and current workers are doing an efficient job.

Senator Steve Dickerson expressed skepticism about the structure of the plan. After confirming that a contractor would keep salaries and benefits at current levels, and clarifying cost savings would come from self-performance and volume discounts, he said the idea that a for-profit business would be able to negotiate from a greater position of efficiency than a $33 billion enterprise (referring to the state budget) “strains credulity”. He then indicated he did not support this plan.

TSEA has accepted an invitation to respond to Mr. Cowles presentation to the committee at a hearing in the coming weeks. Please be sure to monitor the TSEA website and your email inbox for updates about this very important issue.

CLICK HERE to view Wednesday’s hearing.

The following documents were also released in conjunction with the hearing.

Facilities Management Business Justification presentation

Facilities Management Business Justification Report

Business Justification Fact Sheet

NEWS RELEASE – Business Justification Report

These and a few other documents are available online here:

http://www.tn.gov/serem/topic/serem-facilities-management-business-justification-report

TSEA’s position has not changed, we continue to believe state employees are already doing an efficient, cost-effective job for taxpayers. We simply do not agree that a private company will provide the same level of services, with profit as a motive, and do it at a lesser cost than state employees.

We are currently investigating the data contained in the documents above, and will update you in the coming days.

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