Wednesday, May 10, 2006

Privatization debacle

The Express-News has a lead story today about a state privatization deal gone sour.

Effective immediately, state workers again will be responsible for processing applications for assistance programs such as food stamps and Medicaid after myriad problems resulted with the private company hired to do the job.
Bermuda-based Accenture LLP won an $899 million, five-year contract early last year to take over the state's public assistance eligibility system.

Bermuda-based??? That should have been the first clue that something was seriously wrong with this deal. Companies base themselves in Bermuda to avoid paying U.S. taxes, so why would any government entity think that such a company would have the best interests of its citizens in mind?

The story does not give you a clear idea of who should be held responsible for this debacle, but it’s no secret that the Republicans who have taken charge of the state government have always insisted that privatization is the miracle cure for all that ails us. Unfortunately, we are now finding out what a bitter aftertaste that snake oil really has:

State eligibility offices are understaffed because of the departure of thousands of state workers who feared they would lose their jobs when Accenture took over.
Those understaffed state offices now will be required to deal with thousands of cases that are to be transferred out of Accenture's control.

Then there are the workers who were hired by the Bermuda-based company to staff their call centers who are now in limbo:

The system operated by Accenture includes four privately run call centers around the state that eventually will replace hundreds of local offices staffed by state workers. Already, the San Antonio call center, which is to serve a large swath of South Texas, has become the largest in the state, employing more than 500 workers.
It is not clear what other tasks the private workers will be performing because the jobs they were supposed to do will now be done by public employees.

I wonder how much money Texas taxpayers are going to be out as a result of this mess.

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