Report shows Texas A&M outsourcing savings exceed expectations

[TexasTowelie]

Texas A&M's massive outsourcing efforts will likely save them more money than previously estimated.

A one-year assessment of the outsourcing at Texas A&M, which was conducted by system administrators, found that the flagship university will likely save $10 million more than originally projected. The same report found that the privatized employees were more successful at their jobs than when A&M ran the operations.

Billy Hamilton, the A&M system's executive vice chancellor and chief financial officer, sent a memo to System Chancellor John Sharp on Tuesday that details the first year impact of the outsourcing of dining, landscape management, custodial services and building maintenance services to North Carolina-based Compass Group USA last summer. That deal, which a Compass lawyer called the largest of its kind, privatized the jobs of more than 1,000 employees at Texas A&M.

Sharp said last year that the deal will be worth $260 million in extra revenue and cost savings over the life of the 10-year contract.

More at http://www.theeagle.com/news/local/article_f7b38a63-7739-516f-8e0b-700a3ae951f1.html .

[font color=maroon]It is already under discussion, so look for a similar program to be implemented at UT-Austin in the near future.

The comments in response to the article do question the validity of the statistics that are being pumped out. For example, the Compass Group is including the liquidation of assets such as old vehicles as part of the profit being reported. They are also showing that a lot of work orders in backlog were closed, but that may have been an administrative fix with subsequent work orders reopened.

The morale is low among the contracted employees. In addition, the employees are no longer eligible for pension benefits through the state since they are privatized. The privatized employees no longer receive any support from the A&M Staff Council.

There are other improprieties mentioned in the comments such as the privatized employees driving state vehicles using exempt tags and fueled at state pumps to generate profit for the Compass Group.

I've never trusted John Sharp or his quest for privatization since he was state comptroller and I view him as a DINO. Therefore, I wouldn't be surprised if the stats are being fluffed for the sake of appearances.[/font]

[Lithos]

1. Outsourcing usually fails over the long run

As the outsourcing company in turn starts to clamp down for increased profits. "Good" workers leave for better opportunities, leaving newer, less experienced people in their place. SLA's change as a lower quality is now deemed acceptable. Customer service is not about playing spreadsheet games which is what this is turning into.

Also, as you pointed out, financial games can no longer be worked. You have to look at outsourcing over a multi-year period - and I think you will find that it generally comes out poor.

L-

[Ilsa]

2. You beat me to it. nt

[Ilsa]

3. But I bet there was no examination of

the effects of outsourcing on the community. Did hospitals have to treat more uninsured patients? Are contracted employees spending less in BCS?