42 Tennessee lawmakers call for time out on Haslam hi-ed outsourcing

42 Tennessee lawmakers call for time out on Haslam hi-ed outsourcing

April 24th, 2017 by Andy Sher in Politics State

Tennessee Governor Bill Haslam talks about education and his budget to the editorial board at the Times Free Press.

Photo by Tim Barber /Times Free Press.

NASHVILLE — Nearly a third of the Tennessee General Assembly is calling on Gov. Bill Haslam's outsourcing czar, Terry Cowles, not to finalize outsourcing of public higher education's facilities management until lawmakers have time to fully understand its ramifications.

In a letter last week to Cowles, director of the Office of Customer Focused Government, the 42 lawmakers asked "that the outsourcing process wait until the General Assembly is able to study and understand the effects on our public services, economy, and state workers."

The bipartisan group, including Rep. JoAnne Favors, D-Chattanooga, and Sen. Janice Bowling, R-Tullahoma, also says in the letter that "our reservations include the potential impact to state employees, the scope of 'vested outsourcing' to state services, and allowing enough time to address concerns from the General Assembly."

Signed by 10 senators and 32 representatives, the letter comes as the administration prepares to strike a final deal, possibly as early as Friday, with Chicago-based real estate giant Jones Lang LaSalle.

Last month, the publicly traded JLL emerged as the winning bidder in a building management contract for the University of Tennessee and Tennessee Board of Regents systems and six independently governed state universities. The contract holder would be responsible for custodial, maintenance and groundskeeping services. Some 3,000 workers could be affected statewide.

Cowles was unavailable Friday, a spokewoman said. An administration source said he was at the University of Tennessee at Chattanooga, one of the institutions potentially affected by Haslam's drive to outsource building management across most areas of state government.

Universities such as UTC and two-year colleges including Chattanooga State and Cleveland State could decide for themselves whether to privatize building managment services, but school officials would have to justify their decisions.

In a news release, the United Campus Workers accused the Haslam administration of having rushed foward with a "work out the details later" approach.

The release said it was a move to "lock in a contract — one provision of which allows for its complete renegotiation later — and begin pressuring key decision makers in public institutions across Tennessee to comply with the radical experiment in 'vested outsourcing.'"

Vested outsourcing calls for highly collaborative contracting approaches between companies or in this case the state, and vendors. It is the brainchild of Mike Ledyard and Kate Vitasek, two state-paid advisers who, with Haslam, have defended the process and what they say are the potential savings to the state.

Employees fear for their jobs, but Finance Commissioner Larry Martin said JLL will have to offer compensation packages equivalent to what workers now have. Martin said economies of scale in purchasing can generate enough savings to make it all work out.

The governor bid out an outside accounting review to examine cost savings generated by a model used by the administration. That contract was awarded to KraftCPAs, a Nashville accounting firm that contributed to the governor's campaign and handled his 2014 campaign finance reporting.

Critics said it mostly involved rerunning figures through the model and did not look at the model itself.

Records reviewed by the Times Free Press show two firms bid for the work. One was KraftCPAs; the other was Newmark Grubb Knight Frank, one of the largest commercial real estate service firms in the world. Initially approved to participate, NGKF and its proposal were later tossed because it is not a CPA firm, a mandatory requirement for the evaluation project.

In its original proposal, NGKF had specified one of its CPAs would be in charge of the project.

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow on twitter @AndySher1.


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