Commonwealth Currents
Volume 2, Number 1
April/May 1996

Secretary Thomas on Competition

Competition. Privatization. Outsourcing. Are these just words to those of us who work in state government or are they part of our active search to deliver better and more efficient service to our customers, the owners of the Commonwealth?

For most dedicated state employees it is the latter, but there are naturally some mixed feelings which come anytime the transfer of a function or program from the public to the private sector takes place, or is even contemplated.

How, then, should state employees view the rapid changes which are taking place in every state, at every level, through outsourcing? How can state employees feel secure, secure enough to lend their talents and expertise to a thorough examination of privatization so that wise decisions are made? These are seats on which the administration and the Commonwealth Competition Council have begun to focus.

In 1994, Governor Allen's Commission on Government Reform recommended the establishment of a permanent body in state government to study and propose areas of state government, which have the potential to be outsourced. This Strike Force recommendation resulted in legislation being passed by the 1995 Session of the General Assembly to create the Commonwealth Competition Council. The Council is guided in its efforts by a nine-point charge:

A cornerstone of the Competition Council's effort is the notion that competition does not always mean privatization. A decision to privatize should be made only after thorough study has determined that (a) a function or program is essential to the well-being of Virginians and (b) the private sector can deliver the service and deliver it more efficiently and cost-effectively.

However, the notion of competition should always be present. As we go through the process of examining a particular program, and it is deemed that outsourcing is not the appropriate thing to do, we should, through that process, have identified ways we can perform that program more efficiently through internal competition.

Each of us, as state employees, needs to look at our jobs and the functions we perform with an eye toward being more competitive. Are there better ways to perform our jobs? Are there ways to reduce the cost of delivering services? Are there ways to reduce the time it takes to get the job done? If I had to prepare a bid to get this job or program, what would I do differently to make sure I won the bid?

Whether or not outsourcing is a consideration, we should ask ourselves those questions, then strive to make the changes which are responsive to the answers.

Employment Security

As we look at the workplace today, whether public or private sector, there really is no longer what we called "job security." As organizations and needs change, so do the needs for particular jobs.

While job security no longer exists, it can, in many instances, be replaced with what is known as "employment security," particularly as privatization or outsourcing is considered.

There are many different models which various governments use when outsourcing programs. Some will require the private sector entity to hire current public employees when they take over a program. This guarantees most public employees a job in the private sector, and guarantees the private sector experienced competent employees.

Another model would give public employees the "first right of refusal" on any new jobs created in the private sector through outsourcing. This is the model used by the federal government.

Yet another alternative would be to award bid points based on the private sector company's plan to hire existing public employees. In order to be the successful bidder a company would have to have a plan for hiring existing state employees.

Finally, in cases where the private sector would not take on every state employee currently working on a program to be outsourced, those employees would be redeployed elsewhere within state government by increasing the flexibility of our transfer policies and by providing the training necessary to redeploy good employees.

A good, recent example of this is the approach which the Virginia Retirement System took as it made the decision to outsource its mail handling system. VRS established a program to train employees who would be displaced by this change for other jobs within the agency. It was a "win-win" situation for the employees, the agency and the taxpayers. VRS was able to reduce its costs while outsourcing a function and was able to keep valuable and experienced employees by placing them in areas where they would be productive and beneficial to the agency.

It is clear that the effective, efficient functioning of state government is possible only with the collective efforts of all state employees. This is true of day-to-day operations as well as decisions related to outsourcing, undertaking new-services or ceasing current services.

Competition clearly can, and should, be a win-win situation for all of us. Therefore, we all need to be informed and, more importantly, involved in this important process. I urge you to contact the Commonwealth Competition Council to give your suggestions or find out how to get involved.