April 18, 2012
Last week, Cook County Board President Toni Preckwinkle announced two alternative service delivery initiatives: 1) managed competition for County custodial services; and 2) third-party administration of the County’s employee absence and leave management.
In its 2010 Cook County Modernization Report, the Civic Federation recommended that Cook County institute alternative service delivery, also known as outsourcing, for non-essential services. Historically, the County has not taken advantage of opportunities to work with the private sector to reduce the cost or increase the effectiveness of service delivery for selected programs. Transferring responsibility for service delivery to a private firm or nonprofit organization can be beneficial only if there is a marketplace of competitive, qualified vendors or service providers and strong, sustained management oversight by the government. Governments must establish a mechanism to monitor and evaluate cost-savings and efficiency benefits produced by any alternative service delivery programs. This oversight should include public reporting of efficiencies and/or savings achieved.Privatization efforts should be focused on non-essential services or programs.
Managed competition for custodial services
Under its first managed competition process, the County is seeking to procure custodial services for nine of its facilities located in its Central District – eight of which currently are serviced by County employees and one is cleaned by outside vendors. Private vendors and public employees will submit bids and submissions will be reviewed by a five-member Managed Competition Review Board, which will select a proposed winner. President Preckwinkle and the County Board will then evaluate the selected applicant’s bid before awarding a final winner. Services and costs will be monitored and documented through performance measurement standards by the County throughout the contract, and the results will be made available to the public. RFP (request for proposal) bids for this initiative are expected to be submitted this May.
On October 3, 2011, the City of Chicago implemented another version of a managed competition program and began using both private and public sector crews for the Blue Cart Residential Recycling Program. Mayor Rahm Emanuel reported $2.2 million in savings since the start of the managed competition program approximately six months ago. Reportedly, this is 10% greater savings than originally anticipated. Public sector crews have since reduced their costs by 35% to match more closely to those of the private sector crews.  Complete results and evaluation from the competitive program will be released this summer.
In its Modernization Report, the Civic Federation recommended that the Cook County Sheriff’s Department pursue alternative service delivery for custodial services. The Sheriff’s custodial duties are not core functions of a law enforcement office. As such, this function can reasonably be transferred to another department such as the Department of Facilities Management or outsourced to a private janitorial firm. The County did embark on a limited pilot janitorial privatization program during past Board President Todd Stroger’s first year in the office, but then quickly reversed course. In 2001 Board President John Stroger’s County Operation Review Team reported that privatizing janitorial services could save as much as $5.0 million per year.
The Civic Federation looks forward to further detail about the Managed Competition Review Board and its members. Other possible opportunities for alternative service delivery in Cook County often identified by the Civic Federation include the County’s process of service function, pharmacies in the Health and Hospital System and the County’s print shops.
Third-party administration of absence and leave management
Cook County will be accepting proposals from private vendors to administer employee absence and leave management across the County. Improving personnel oversight, including absence and leave management, is a defined goal under the Set Targets Achieve Results (STAR) program. The FY2011- 3rd quarter issue of the STAR performance measurement program provides data regarding the average number of sick hours per employee per month for FY2010 and the first three quarters of FY2011.
The County also reported that it had enlisted the help of pro bono partners and a task force to assist with the management of sick time, overtime, Family Medical Leave Act (FMLA) benefits, workers’ compensation and overall human resources policies.
Currently, personnel procedures are handled in offices across the Cook County administration. For example, workers’ compensation and ordinary disability are handled centrally in two different offices, whereas FMLA and sick leave are managed at department levels. There is no centralized system of control, which can result in overlap of functions, duplication of efforts and inefficiency in operation. Working with a third-party vendor to establish centralized absence and leave management should lead to comprehensive and efficient human resources services to the benefit of County employees, their managers and taxpayers.
Proposals are expected to be submitted this May. Third-party administration of absence and leave management is estimated to begin in April 2013.
The Civic Federation endorses local governments’ efforts to introduce greater efficiency in service delivery through alternative service delivery methods, including managed competition and collaboration with other governments.
 Managed competition, also called competitive service delivery, requires government employees to compete with the private sector to provide services. The competition is intended to drive down costs by awarding the contract to the bidder able to deliver the highest quality services at the lowest price.
 See Civic Federation, Alternative Service Delivery Issue Brief, December 1, 2006.
 Cook County, Press Release, Managed Competition Brings Fiscal Responsibility to County Contracts, April 13, 2012.
 City of Chicago, Press Release, Mayor Rahm Emanuel Announces Citywide Recycling in 2013, April 5, 2012.
 See Cook County Commissioner Mike Quigley, Reinventing Cook County, Part II, December 2003, p. 37.
 Cook County, STAR report, Cook County Performance Summary, 3rd Quarter, June 1-August 31, 2011, p. 28.