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Wisconsin “Outhousing” Bill Aims to Give Consultants an Advantage Over State Staff

Above, Mark Honadel impersonates Wisconsinites when they read this story.

A new Wisconsin-bred “outsourcing” bill favors consultants over savings, according to Mark Klipstein, President of the State Engineering Association.

The bill, introduced to the state house by Representative Mark Honadel (R-21), is favored by Governor Scott Walker. It would loosen the standards of practice regarding the use of consultants as well as requirements that agencies assess in advance the costs of outsourcing work. Insofar as these jobs are not being sent overseas, one might refer to this more accurately as an “outhousing” bill. From Klipstein’s piece:

Everyone agrees the State of Wisconsin has been wasting tens of millions of dollars outsourcing public projects that could be done in-house more efficiently. Every significant study on the subject agrees. The Legislative Audit Bureau agrees. The Governor’s Commission on Waste, Fraud and Abuse agrees. State agencies and key legislators agree.

A bill from Rep. Mark Honadel (R-South Milwaukee) would eliminate the current requirement that projects of $25,000 or more be analyzed in advance to compare costs using state staff vs. consultants. Instead, the state Department of Transportation would only have to periodically review “the continued appropriateness” of using consultants and submit annual reports to the Legislature listing previous outsourcing costs. Under the proposed law, the state would no longer collect real-time data enabling it to quickly identify and prevent waste.

The legislation effectively opens the ledgers only after projects are complete, allowing bad outsourcing decisions. And the way DOT defines a bad outsourcing decision would be largely up to the agency. Under Honadel’s bill, the DOT would set its own project-assignment ratio between in-house engineers and consultants. This would de-emphasize actual dollar cost comparisons in favor of vague administrative standards.

For an administration allegedly concerned about budget efficiency, this bill either makes no sense or is a perfect example of the hypocrisy of the state’s “fiscal conservatives.” While claims are made that the Wisconsin DOT has looked into cutting financial waste, the agency own hiring regime remains one of the state’s largest money pits, Klipstein says.

State engineers oversee all transportation construction projects including outsourced work. The State Engineering Association, whose members include DOT engineers, has over the past decade produced studies showing just how much money is wasted. The association testified to the Legislative Audit Committee and the waste and fraud commission, submitting Act 89 reports and analysis that demonstrated past and current wasteful practices.

Those studies bolstered an analysis by the DOT itself showing state engineers were at least 18% more cost-effective in delivering services than consultants - and that was before cuts made by the Doyle and Walker administrations widened the public-private compensation gap. Meanwhile, outsourcing costs have continued to increase.

After a contentious battle over the issue of collective bargaining you might assume that cutting obvious financial waste would be a bipartisan relief effort. Not relief for the state’s pocketbook, but relief for the legislators. A softball. A cakewalk. Yet, it seems neither side is all that interested in this. Simple choices, like whether to pay consultants 18% more than Wisconsin state staff, are now partisan talking points, dunk tanks in the Dairyland’s political carnival. Common sense says tighten restrictions, don’t loosen them. Only the special interests benefit from a bill like this, not the people, and it should act as a sign to Wisconsinites that their State Government has decided who they work for.

Kilpstein is unequivocal in this assertion:

Instead of weakening the current law, why not instead deal with the existing evidence of wasteful practices? Indeed, why not strengthen Act 89 to make outsourcing decisions even more transparent? Saving tax dollars is everyone’s issue. If the DOT is interested in real solutions, it should involve all stakeholders, not just those who would gain from less transparency.

Outsourcing is sometimes necessary, but it’s foolish to rely entirely on consultants to decide how best to use consultants. Tax dollars spent wisely are what citizens expect - not more special-interest catering.


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