When public and private meet, extra care is needed

Read this important blog by Donald Cohen published in HuffPost on Oct. 8, 2013.

This blog explores the big picture issues raised by AB 566, and makes a strong case for why taxpayers and the public need to be protected when the public sector and the private sector get together.

A few excerpts:

“In 2007 the Government Finance Officers Association looked at the question of savings promised by privatizing public services and concluded that hidden and indirect costs can add up to 25 percent to the contract price.”

“One of California’s most spectacular examples of this comes directly from the judicial branch: the central bureaucracy’s case management IT project. A state audit found that the agency ‘failed to develop accurate cost estimates — in 2004 the cost estimate was $260 million and by 2010 the estimated cost was $1.9 billion.’ With more than 100 contract amendments, basic management lapses, and under-reporting of costs, it has become the poster child of government mismanagement of private contractors in California.”

“Privatization is inherently neither a good nor a bad thing. It has potential upsides and downsides that depend entirely on the need for legislators to protect taxpayers and the public interest; to stay in charge through clear standards, accountability, and transparency. AB 566 deserves a signature.”

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