County Rejects Workers’ Bid on Service Pact

SANTA ANA â€”  After 18 months of talking about scaling back the size of government and handing over some of its functions to the private sector, the Board of Supervisors weighed a proposal Tuesday that amounted to “privatizationâ€� in reverse.

The county staff had recommended that the supervisors award a $1.6-million contract for a job training program to a group of county employees who submitted a lower bid than an outside firm. Two years ago, the firm took over the work from the county as part of a privatization effort.

The issue generated much discussion and soul-searching among supervisors, who applauded the workers’ ingenuity but raised concerns about the fairness of the bidding process, as well as the message their decision might send to a public that favors less government.

In the end, the board voted 4 to 1 to reject the proposal. But supervisors agreed to reconsider the idea next year once a clearer procedure is established that hopefully “divorces� employees who submit a bid from involvement in the contract process.

“People might look at this and see we are one week out of bankruptcy and are already hiring more workers,� said Supervisor Don Saltarelli. “There could be the perception that this is de-privatization.�

But Supervisor Marian Bergeson argued that the employees should receive the contract because they submitted the lowest bid.

“We had a chance today to save dollars and increase [services]. But the board instead chose the status quo,� Bergeson said. “It’s difficult after all the work they’ve done on this proposal to just turn our backs and reject it.�

The contract involves Great Avenues for Independence, a state program designed to provide job training, placement and education services to people on welfare.

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In 1994, the Board of Supervisors decided to contract out a portion of the case management duties to Maximus Inc. of Sacramento, and compare the firm’s performance with that of county workers who also managed job placement cases.

The employees consistently placed more clients in jobs than did Maximus, according to Diane M. Edwards, director of Adult and Employment Services. In the 1995-96 fiscal year, for example, county workers found jobs for 3,294 people compared to 2,229 for Maximus. The county’s job placement rate was 8.42% during the period versus 7% for Maximus.

“This bottom line is how many people we can get off welfare and into the work force,� Edwards said. “That’s the purpose of the program.�

With the contract set to expire this year, the workers decided to submit a formal bid. By restructuring the way the program is run, the employees said, they could increase their job placement rate to 11% and spend $567 per placement, down from a current cost of about $1,000. The plan required the hiring of up to 18 new workers.

Maximus proposed a 7.4% placement rate at $967 per placement.

While an evaluation committee recommended the employees’ proposal, Maximus officials complained that the bidding criteria did not clearly state from the beginning that success in job placement would be a key deciding factor.

Both Maximus and the county agree that the company has a higher placement rate per employee. A Maximus case worker handles 140 clients, compared to 90 for a county worker.

“There are a lot of different ways to look at the numbers,� said Russell Beliveau, president of government operations for Maximus.

Maximus also raised concerns about some workers who submitted the bid also being involved in the contract creation and evaluation process.

“I believe [the county] did [its] best to divorce them from the process,� Beliveau added. “I’m not saying the evaluation was knowingly biased. But it created the perception of bias.�

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Social Services Agency officials insist that the evaluation was completely objective. They said they did everything “humanly possible� to keep the workers out of the contract process, but acknowledged some were occasionally consulted for their expertise.

After the creation of clear criteria for awarding the contract, Saltarelli said, the employees could submit a new bid next year and not face the same criticism about the selection system.

“We should have a process that ensures a level playing field,� he said.

Nonetheless, supervisors and county officials praised the employees for their efforts to make government more efficient.

“For us, this is breaking new ground,� said Social Services Agency Director Larry Leaman. “We are seeing the juices of competitiveness. It’s prompting our employees to sharpen their pencils and re-engineer what they do.�