Competitive contracting grows despite myths

"The reaction is quite emotional"

As more and more public school districts across Michigan turn to competitive contracting as a way to save on costs and spend more dollars on education, the reactions by those opposed to it become more negative.

Accusations ranging from poor performance and putting children in danger to claims that private company employees are outsiders or illegal immigrants have sprung up at school board meetings and union rallies across Michigan this year.

Last May, The Detroit News reported that David Murray, a member of the Detroit Public Schools board of education, filed a police report over what he perceived to be threats of violence on a radio call-in show. The comments came after the DPS board voted to sign a $21.7 million contract for food services with a private company. Aramark, which won the contract, bested other offers, including one from the union that had been overseeing the operation.

In April, at a Michigan Education Association union rally to protest the privatization of custodial services in the Reeths-Puffer schools, state Rep. Doug Bennett, D-Muskegon, was overheard telling Kathie Oakes of the MEA, “We all know what’s going to happen — they are going to hire illegal immigrants to fill the jobs,” The Muskegon Chronicle reported.

“When we try to discuss this, we’re met with an emotional outburst,” said Jason Church, a school board member in Perry. “We’re told we’re evil, we have no morals. There’s nothing constructive there.”

Church said the Perry schools, near Lansing, have been discussing competitive contracting for custodial services. The discussion is often met by claims that janitors from a private company are “outsiders and low lifes,” have “criminal backgrounds” and would be a “danger to the children,” Church said.

“This really doesn’t make any sense,” Church said. “Half of our entire staff lives outside the district. Just because someone lives 20 minutes away makes them a bad person?”

While privatization opponents say that public school employees care more about students, or that non-school employees would pose some type of danger, it was revealed earlier in the summer that a Michigan State Police background check found almost 470 public school employees with felony conviction records, including 56 teachers. Charges ranged from stalking to larceny to drunk driving. Those found with felony sex crime convictions were immediately fired as per a 2005 “student safety” package of new laws.

Rick Simpson, a regional sales director with Chartwells Food Service, said most companies had stricter hiring guidelines than the state did for public schools up until the adoption of a new state law last fall aimed at increasing student safety.

“We did drug testing, fingerprinting, background checks, everything,” Simpson said. “We don’t hire people with felony convictions.”

“It doesn’t matter if you’re a school or a private firm, people need to remember we all dip our buckets into the same well of applicants,” said John Markey, vice president of Educlean Services. “The difference is what you do after you draw up that bucket.”

Markey said his company puts employees through a rigorous background check that includes fingerprinting and personality testing. Educlean’s insurance coverage includes not only liability, but also theft, mysterious loss and third-party indemnity.

“A policy for mysterious loss can be better than bonding, because a bond will generally only pay out when there’s a conviction,” Markey said. “With mysterious loss, if say, a laptop computer turns up missing while we’re in the building, the claim is paid because of the loss, not a conviction.”

Third-party indemnity covers property or equipment that are considered in the “care, custody and control” of the company’s personnel.

“If someone trips over an extension cord we’re using for a floor buffer, that covers it,” Markey said. “It’s specifically written in that way.”

Church said another roadblock people use when fighting against competitive contracting is the question of a track record.

They say privatization is one thing, but what if it doesn’t work,” Church said.

According to a 2005 privatization survey by the Mackinac Center for Public Policy, 35.5 percent of the 552 districts surveyed privatize at least one of three major noninstructional services – custodial, transportation or food services. That was up from 34 percent in 2003, even though 27 districts brought some service back in-house after it had been privatized two years earlier.

“A lot of people think of it in terms of proposals and contracts, when they’re really partnerships,” Markey said. “We used to always want to be the first one (contractor) in, but not any more. Being the first one in means you take all the heat. Being the second one in is much easier.”

Markey said one way to reduce problems with competitive contracting is for school boards to be as specific as they can be in issuing RFPs (Requests for Proposals).

“There are companies that are certified and there are associations for these kinds of firms,” he said. “The school board should make sure about the level of insurance a company has. They can request the background checks, drug testing, things like that.”

Simpson said people who oppose privatization should remember that the companies are driven by performance.

“It’s not easy to terminate an employee who works for a school district, but it is easy to terminate a contract,” he said. “All of our contracts have 60-day cancellation clauses. Knowing you can lose all your business in 60 days is pretty good motivation to hire people you can trust and depend on.”