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Outsourcing and the Cost-Quality Balance


By Dan Hounsell Outsourcing
outsourcing

Outsourcing is a controversial practice. Managers who even mention the word can stir up emotions of workers in maintenance and engineering departments in institutional and commercial facilities whose jobs might be in jeopardy. Beyond that, without careful planning and thorough monitoring of the contractor’s performance, the many benefits touted for outsourcing can fail to materialize. In some cases, though, outsourcing can seem like the only viable option for a financially strapped organization.

The Gary (Ind.) Community School Corp. won state approval recently to outsource its custodial, maintenance and grounds workers, a move that could save the cash-strapped school district up to $1.7 million a year, according to the Kokomo Perspective.

The Indiana Distressed Unit Appeals Board (DUAB) unanimously endorsed the recommendation by Leonard Moody, the district's chief financial officer, to hire Alpha Building Maintenance Services for the work instead of inking a new contract with the district's union employees. A new union contract to replace the deal that expired in 2007 would have cost the school district an estimated $5.5 million a year, Moody says.

The Gary school district last year was taken over by the state and put under the control of a DUAB-appointed emergency manager after its elected trustees repeatedly failed to match the district's spending to its declining revenue and racked up more than $100 million in debt.

The district likely will not fully outsource its building services immediately, Moody says, adding he expects foremen and other experienced staffers will continue to be directly employed by the school district for at least a few more years.

In addition, Moody is urging Alpha to rehire as many of the district's existing custodial, maintenance and grounds employees as the company feels it needs to provide a high level of quality service.

This Quick Read was submitted by Dan Hounsell — dan.hounsell@tradepressmedia.com — editor-in-chief of Facility Maintenance Decisions, and chief editor of Facilitiesnet.com.

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