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| Arguments for
| Arguments against
An initiative affecting the use of private contracts for state design and engineering
projects and instituting a new process for determining which projects, if any, could
be contracted out.
One of the most contentious and sometimes
ideological arguments in the public sector is that over contracting out for public
services. Private contracts for such things as prison construction, highway design,
and so forth are viewed by public employees unions as a direct threat to their jobs
and livelihoods. The agencies which enter the contracts say they allow them to do
more work with less money without the bureaucratic headaches normally ascribed to
government work. The battle is especially pitched in the area of highway construction.
In 1989, then-Governor George Deukmejian signed a law opening the way for private
contractors to be used to design and build toll roads, including a major toll-road
project in Orange County. The Professional Engineers in California Government, the
union representing the majority of Caltrans' civil service road engineers, balked
and began a long court battle with Deukmejian and subsequent administrations. A superior
court judge invalidated much of the law, citing constitutional limitations on outside
contracting. But after a series of legal wrangles, the Legislature and Deukmejian's
successor, Pete Wilson, tried again in 1993 with legislation authored by then-Senator
Marian Bergeson. PECG challenged that law as well, and it too was overturned, a ruling
that was upheld last year on a 5 to 2 vote of the state Supreme Court. In the meantime,
Caltrans continued to find work for private contractors, most notably and visibly
in the rapid repair of the Santa Monica Freeway, which was damaged in the 1994 Northridge
earthquake. While it pursued its court challenge, PECG began circulating this initiative,
further upping the ante in its ongoing legal and political struggle with the Wilson
administration. The measure was billed in early promotion as the "competitive
bidding" initiative. But in early March, a Sacramento Superior Court judge ordered
the removal of the phrase "competitive bidding" from the initiative's descriptive
Proposition 224, referred to as the Government
Cost Savings and Taxpayer Protection Amendment, requires that any state contract
for engineering, architecture or the like that exceeds $50,000 in value be let only
in a public process with sealed public bids. The bids would be assessed using a cost
analysis prepared by the state Controller. The formula for that analysis, included
in the initiative, requires that only additional direct costs to the state be used
to assess the state's bid, while private contractors would have to enumerate all
of its anticipated costs, as well as those of the state for monitoring the contract.
The Controller or the contracting entity would also be empowered to overrule any
outside contract if it determined the contract would adversely affect public health
or result in a lower quality of work.
The primary proponent is the Professional
Engineers in California Government, but an array of public employee unions also back
the measure, including the California Correctional Peace Officers Association and
the California State Employees Association. Other labor organizations, including
public employee affiliates of AFL-CIO, also support the measure. They argue that
private no-bid contracts waste taxpayer dollars and are a threat to public safety.
They contend private design contracts are often awarded to large campaign contributors,
and that there is no accountability in the process, leading to the potential of inadequate
or poor-quality work. They contend the cost-analysis formula to be used by the Controller
is a more accurate comparison than the strict matching of costs, since private contracts
have the ability to "lowball" their estimates in order to undercut state
Opponents include the California Chamber
of Commerce and other business and trade organizations, as well as a host of public
agency organizations, among them the League of California Cities and the California
State Association of Counties. Some individual AFL-CIO locals also oppose the measure,
and were instrumental in convincing the California Democratic Party to rescind an
earlier endorsement. The California Teachers Association and the California Republican
Party also oppose. Opponents argue the initiative is a "competition killer,"
designed to eliminate the use of any private contractors in state government projects.
They contend the "cost analysis" process for the bidding is rigged to favor
state civil service engineers every time. They argue the measure could cost the state
thousands of construction jobs by creating a state monopoly for virtually all contracts.
They also contend the measure will establish a new bureaucracy in the Controllers
office, in effect making the Controller the state's "contract czar."
-- Article by Steve Scott