Private company would maintain, but not design or build, state buildings under governor's plan

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

NASHVILLE - Higher education and state buildings would be managed by a private company under a plan by Tennessee's governor, but state officials still will call the shots on design and construction.

That's according to State Comptroller Justin Wilson's office, which is reviewing the contract that could put as much as 87 million square feet of publicly owned space under the control of Jones Lang LaSalle (JLL) management.

In a letter responding to concerns voiced by Sen. Mike Bell, R-Riceville, Wilson wrote that JLL is "not authorized to include design and/or construction under ANY contract with the state."

Those decisions rest with the State Building Commission, Wilson stated.

That includes work done in-house or via subcontract, the comptroller said.

Bell told the Times Free Press earlier Thursday that he had been told the work done by architects, engineers and construction firms would not be impacted in Tennesse Gov. Bill Haslam's latest round of outsourcing.

But Bell, chairman of the Senate Government Operations Committee, said he wanted Wilson to weigh in.

Haslam's new round of outsourcing involves the University of Tennessee and Tennessee Board of Regents systems as well as six universities recently spun off from TBR. Also impacted are facility management operations at state prisons, mental health hospitals and other state facilities.

Individual higher education campus leaders, including at the University of Tennessee at Chattanooga and Chattanooga State Community College, will determine whether JLL will save them money. State governmental agencies, however, will have no choice.

While the contract calls for JLL or its two subcontractors to hire existing state workers and offer a comparable benefits package, both the United Campus Workers union and the Tennessee State Employees Association remain highly skeptical.

Nearly a third of the General Assembly - 42 senators and representatives - signed a letter sent last week to Haslam's outsourcing czar, Terry Cowles, calling on a halt to the plan to give them more time to study it.

Only one Hamilton County lawmaker, Rep. JoAnne Favors, D-Chattanooga, signed it. Meanwhile, 17 lawmakers have requested economic impact statements for their districts. The administration says it's working on it.

The administration says up to 3,000 state workers in facilities management, energy management, janitorial and groundskeeping services would be involved in the JLL bid.

JLL won the contract to manage facilities services across most large state buildings in Tennessee in 2013, through a series of SBC-approved contract expansions that began with a consulting contract.

The administration says the company has saved taxpayers millions of dollars, but critics ask at what cost. In the original contract, JLL did not hire dozens of workers.

Speaking with reporters on Thursday, Chief Procurement Officer Mike Perry said the administration learned lessons from that and imposed new rules in the new contract, awarded to JLL over two other firms last Friday.

The negotiating process is a twist on standard bidding and is known as vested contracting. In it, the state and interested companies engage in a lengthy back-and-forth process before a finalist is selected.

It's the brainchild of state consultant Mike Ledyard, who has taught at UT-Knoxville and is now using Tennessee as Exhibit 1 to push the idea nationwide.

Perry and others say it's already saved Tennessee millions of dollars.

Contact Andy Sher at or 615-255-0550.