If you want to work on a project for the city of San Diego, you may be required to submit a bid -- even if you’re already a city employee. In a twist on the way municipalities have traditionally done business, more public employees across the country are being required to participate in a bid process for project work. The idea, known as “managed competition,” has been around for about 15 years. But as cities seek new ways to save money, the idea is gaining renewed attention.
In San Diego, the program was approved by a 2006 ballot vote (although it wasn’t fully implemented until 2010). Under the program, city leaders identify operations they think can be performed for less money. Workers help write the solicitation for bids, while another team -- along with private-sector contractors -- responds.
City landfill employees recently won a bid that will save the city $2.7 million annually, in part by cutting 11 full-time positions. Interestingly, all four managed competitions completed in San Diego so far have been won by city workers. “They won because they found ways to operate more efficiently,” says Wally Hill, the city’s assistant chief operating officer.
Meanwhile, in Chicago, managed competition has taken a more literal meaning: The city’s recycling operations have been split between public workers and private companies, and both are being evaluated for a future contract. Already, city officials say, the public-sector workers have reduced costs from $4 per cart of waste to $2. Tom Alexander, a spokesman for Mayor Rahm Emanuel, says employees have found more efficient ways to route their trucks, are using fewer sick days and have renegotiated the labor deal for new hires. “We were hoping there would be a robust competition, and that’s exactly what happened,” he says.
Charlotte, Phoenix, Indianapolis and other cities have pursued managed competition as well. For some, the idea is a no-brainer. “The city and the government -- we’re not in the employment business,” says Arizona state Sen. Frank Antenori, who sponsored a bill last year that would have required the state’s largest cities to solicit private-sector bids for services. “We’re a service provider. If we can provide that service cheaper and more efficiently, we should.”
Historically, labor groups have opposed managed competition, arguing that profit-driven companies may not perform work to the same standard as government employees. They also argue that there’s less accountability involved when work gets outsourced.
In San Diego, leaders with the city’s Municipal Employees Association (MEA) say that if city workers have to bid like a company, they’ll start acting like one. Workers on their way to fill a pothole might not stop to pick up a fallen road sign, for example, if that’s not included in their bid and would affect their overall costs and efficiency. MEA officials say that as more front-line jobs become subject to managed competition, the public will get a feel for how it really impacts city services -- and citizens may not end up liking it after all.