Gov. Haslam moves to outsource building management, services in higher education

Gov. Haslam moves to outsource building management, services in higher education

August 17th, 2015 by Andy Sher in Local Regional News

NASHVILLE -- Gov. Bill Haslam is actively exploring privatizing building management and operations of all Tennessee public colleges and universities as well as remaining general government buildings not previously covered by a controversial contract struck two years with real estate giant Jones Lang LaSalle.

Without fanfare, administration officials on Aug. 11 placed a Request for Information for "facilities management outsourcing" on its website for companies that might be interested in the business. It could generate millions of dollars in profit for the eventual winner.

The contract would include building services and management for state prisons, hospitals and more in addition to higher education, according to the RFI.

Companies have until this Friday -- giving them just ten days later to respond. That's just the beginning of the process.

In 2013, Haslam defended the outsourcing, in which a number of state workers lost their jobs, citing his mantra of effective, efficient government, saying the move would save the state money. 

But the billionaire businessman was already a believer in Jones Lang LaSalle, holding an investment in the publicly traded company when he first ran for governor in 2010, although he sold his interest prior to taking office. His assets are now in a blind trust and the governor's office said in 2013 he doesn't know what his investments are outside the family's Pilot Flying J Travel Centers empire.

United Campus Workers, a higher education union, is already blasting Haslam's latest plan to privatize higher education building management and operations. 

Republican Gov. Bill Haslam

Republican Gov. Bill Haslam

Photo by Erik Schelzig

"While Haslam states his intention is to improve efficiency in management and 'realize savings,' questions about outsourcing's efficacy and where those savings would come from, and memories of the JLL profitmaking fiasco cast serious doubts over the plan," the group said in a news release.

The RFI posted on the state's website says it would cover almost all facilities management operations including "building operations including but not limited to management services, security, cleaning, repair, maintenance, administrative, roads, grounds, utilities services, preventive maintenance, subcontractor management for services not self-performed, facilities-related purchasing, safety and emergency preparedness and disaster recovery plans and support, energy management, utilities analysis and financial and accounting related to building operations."

It says "potential future components" could include food service operations, special events setup and coordination, master planning, move management, project management, occupancy planning, shipping and receiving, dock management, and administrative site services such as conference room scheduling and setups.

The campus workers group said Jones Lang LaSalle's original consulting contract with the state ballooned from $1 million to $10.7 million through a series of contract amendments approved by the State Building Commission.

But David Roberson, a spokesman for the state Department of General Services, said "this is just an RFI; there's been no actual proposal to do any work requiring State Building Commission approval.

"We're only in the information-gathering process," Roberson emphasized and added the administration will see what vendors have to say and then "we would determine whether we would want to go forward with a Request for Proposal, and what the scope of that RFP might be."

Over the course of the current five-year contract, Jones Lang LaSalle would also make $38 million and in addition be able to charge a fee of up to 4 percent on any leases it negotiated. But administration officials said the move would save taxpayers upwards of $150 million to $200 million over ten years. 

But the governor was forced to back away from his initial plans to include higher education in 2013 due to concerns raised by lawmakers. Evidently, those issues may have now been resolved.