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Politics

State rethinks privatization

By STEVE BOUSQUET
Published February 22, 2007

TALLAHASSEE - Further distancing himself from the policies of Jeb Bush, Gov. Charlie Crist on Wednesday ordered a state review of three complex and costly privatization ventures shadowed by controversy and critical audits.

Crist and Chief Financial Officer Alex Sink assigned a panel of experts to conduct the review, which they called "the first step toward increased fiscal accountability in state contracting."

First on their list is People First!, the nine-year, $350-million venture by Convergys Corp. to privatize personnel services for state employees.

The project has had a series of problems, including mistakes in processing paychecks, allegations that some workers' data may have been mishandled overseas and a lawsuit by whistle-blowers who used to work for the company.

"We share a concern about how they're operating, how they're functioning - if they're in the best interest of the people of the state of Florida," Crist said.

The other two contracts awaiting closer scrutiny are MyFlorida MarketPlace, a $92-million purchasing system by Accenture Corp., and Project Aspire, the $80-million privatization of many of state government's accounting functions that until recently was managed by BearingPoint.

Crist said other outsourcing projects might also be scrutinized.

"The review will serve as a starting point for how to reap the most benefit from the systems, whether or not privatization has merit - if it does, we should use it, if it doesn't, we should not," Crist said.

Convergys said in a statement that it "continues to work with the state of Florida to make People First! more efficient, easier to use, and to improve the security of the system." The company said it met or exceeded more than 95 percent of performance standards.

Bush championed outsourcing as a way to reduce the state payroll and save taxpayers' money by eliminating duplication in the massive bureaucracy.

The review will be conducted by a seven-member Council on Efficient Government, created by the Legislature last year. It is chaired by Linda South, Crist's secretary of the Department of Management Services.

Other members include Sink; Holly Benson, secretary of the Department of Business and Professional Regulation; and Dr. Jim Zingale, executive director of the Department of Revenue. Crist plans to appoint three others from the private sector, who by law must have business expertise in purchasing and contracting.

Sink, a Democrat, claimed millions of tax dollars have been lost as a result of flawed outsourcing ventures, waste or poorly written contracts.

She said "more independent eyes and ears" should have reviewed original contract documents for the three ventures, and praised Crist for demanding more accountability.

"He is determined to put an end to politics as usual in Tallahassee," Sink said.

Asked to cite one example of an outsourcing venture that is working well, Crist paused and deferred to South, who cited trouble-free privately run programs dealing with employees' pension benefits and a statewide law enforcement radio system.

Steve Bousquet can be reached at bousquet@sptimes.com">href="mailto:bousquet@sptimes.com" mce_href="mailto:bousquet@sptimes.com">bousquet@sptimes.com or 850224-7263.

Fast Facts:

Who they are, what they do

A closer look at companies that were awarded three state privatization contracts now under review:

Cincinnati-based provider of outsourcing services with about 74,000 employees in more than 75 locations globally.

Bermuda-based management consultant and outsourcing company with about 146,000 employees in more than 150 cities and 49 countries.

McLean, Va.-based provider of strategic consulting and other managed services with more than 17,000 employees working in 60 countries.

[Last modified February 22, 2007, 01:49:13]