Governor's outsourcing contract could have huge impact on UTC, Chattanooga State

Governor's outsourcing contract could have huge impact on UTC, Chattanooga State

June 5th, 2017 by Andy Sher in Politics State

Related Article

Tennessee lawmakers urge Gov. Haslam to delay outsourcing

Read more

NASHVILLE — An estimated 110 facilities management workers at the University of Tennessee at Chattanooga won't learn until later this year whether their new boss will be a for-profit contractor under the Haslam administration.

"This is an issue that we have studied for months and have received good input from faculty, staff and students," UTC said in a statement last week in response to questions posed by the Times Free Press.

The statement also noted that "while a final decision has not been made by UTC, we have long valued the hard work and contributions that our facilities management team members make every day."

Noting that all University of Tennessee system campuses will decide independently whether to used the potentially massive outsourcing contract signed last month by Gov. Bill Haslam, UTC said the decision will come this year "following collaborative conversations by the local campus leadership, the University of Tennessee System, and the University's Board of Trustees."

Other public colleges and universities as well as many agency chiefs in general state government are faced with the same decision.

Chattanooga State, for example, has 64 employees involved in managing and maintaining its campus, according to a breakdown provided by the Tennessee Board of Regents. A Chattanooga State spokeswoman last week referred a reporter to a facilities management official who did not return a telephone call.

It all comes as a result of Haslam's administration finalizing its controversial outsourcing contract on May 26 with Chicago-based real estate giant Jones Lang LaSalle Americas Inc.

JLL already provides building services ranging from maintenance and custodial work to repair, groundskeeping and energy management to 10 percent of general state government buildings.

Haslam says that's saved the state money and he believes as much as $36 million a year more can be wrung out in the remaining 90 percent of publicly owned buildings.

The five-year facilities management contract potentially is worth up to $1.9 billion. And it could put as many as 3,000 higher education and general state government workers — as well as 87 million square feet of public buildings — under JLL's purview.

Unlike JLL's first contract, in which a number of state workers got laid off, the administration says it has provided protections this time around.

Haslam and other administration officials say JLL doesn't have to lay off workers to make money. Instead, they argue, the company's size allows it drive good bargains on purchases and achieve other economies of scale.

Under contract provisions, most state staff who've been employed at least six months, work at least 30 hours per week and whose current responsibilities amount to a minimum of 51 percent of the services that would be now performed by JLL would be hired by the company.

Those who don't meet those criteria could be considered but JLL is under no obligation to hire them. Total compensation in the form of pay and benefits for transferred workers would have to be comparable to what they now have. But amounts within individual categories can differ.

Some employee could face transfers within a 50-mile radius of where they now work. The transferred employees would also be subject to criminal background checks and drug screenings, and those who fail may not be hired.

The United Campus Workers called the administration's approval of the contract "insulting," charging that it was "concocted in secret in backroom meetings with JLL and other corporations, excluding the public and the General Assembly."

UCW said the Haslam administration "decided they were going to sign this contract one way or another — despite serious questions and opposition from nearly every stakeholder, from campus administrators, to the General Assembly, to the taxpayers who will foot the bill for this boondoggle."

A majority of state lawmakers wrote to administration officials — a copy went to the governor — urging the state hold off and give them time to study the issue. It was ignored.

Haslam administration officials believe much of the savings can be found in higher education. JLL's contract includes cash incentives for cost savings beyond what was projected.

According to Department of General Services figures, as many as 2,976 employees across higher education and general government could find themselves working for JLL.

That includes up to 1,011 employees in the UT system, depending on the number of campuses participating. Up to 429 employees at Tennessee Board of Regents two-year community colleges could be affecting, and another 834 workers at six universities, including Tennessee Tech in Cookeville.

In the executive branch, as many as 702 workers could be affected, figures show.

Administration officials acknowledge it could take months, even years for various entities' to decide whether to buy in, and some agencies' operations may not be suitable.

"The governor has said this is a tool that universities and departments across state government can use to help reduce costs and the contract was written to be flexible, so agencies can participate in varying ways to best fit their needs and help them provide the very best service at the lowest possible cost," Haslam press secretary Jennifer Donnals said.

At least two of the biggest operations in two of the state's larger departments could wind up not being outsourced.

The Tennessee Department of Correction operates 10 prisons — four others are already in the hands of a for-profit company, Core Civic, formerly known as Corrections Corporation of America.

Correction spokeswoman Neysa Taylor said the department doesn't plan to sign on for outsourcing because it uses inmate teams as part of vocational training in areas like janitorial services, groundskeeping, maintaining buildings, fencing, even work like carpentry, welding and masonry.

The Department of Mental Health and Substance Abuse Services operates four hospitals, including Moccasin Bend Mental Health Institute in Chattanooga. It's covered in the JLL contract.

"Our Department is looking at each situation to determine whether outsourcing of maintenance, janitorial, groundskeeping services would make sense for any of our facilities," spokesman Micheal A. Jones said in an email.

But Jones noted the department has "expressed that outsourcing at our Regional Mental Health Institutes (RMHIs), which includes Moccasin Bend, would not be in the best interest of our clients and could jeopardize federal funding."

As a result, they "are not being considered at this time," Jones noted. "However we are reviewing our grounds keeping contracts at our Licensure Office locations because vulnerable clients are not housed at these locations."

Contact Andy Sher at or 615-255-0550. Follow him on Twitter @AndySher1.