State weighs more private contracts for services

Cost savings: Web design, couriers, printing considered

JORDAN SCHRADER; Staff writerMarch 19, 2012 

A decision is due by October on whether to roughly double the amount of central state-government printing that is farmed out to private companies.

That will follow other potential boons to the private sector this summer, when state officials are to decide if companies should be tapped to replace public employees as Web designers and as couriers for state mail.

It’s all part of the authority lawmakers gave the governor last year to put back-office work out to bid in search of cost savings. The targeted work at the state printer alone accounts for more than $8 million in spending on bulk printing of forms, business cards, stationery and other big orders, plus storage and delivery of printed materials.

“That’s a ton of work for people in the private sector,” Jeffery Beardemphl, president and majority owner of Print NW in Lakewood, said of state government printing. “There’s just no way that they can do that as efficiently as the private sector. They just don’t.”

At the state printer, “They absolutely believe they can compete,” said Steve Valandra, spokesman for the Department of Enterprise Services, which is now home to the printer.

A decision on whether it makes sense to contract out each of those services will come from Gov. Chris Gregoire’s budget office, as long as the process wraps up as scheduled before she leaves office.

WORKERS AFFECTED

Five full-time-equivalent employees do more than $1.5 million worth of website development and design, the first service up for consideration, which is to go out for bid in April and have a decision by July. They maintain the main Access Washington Web portal along with many agencies’ websites, including online portals to driver’s licenses, unemployment benefits or state budget information. Local governments and other groups also can use their services.

Eight more workers deliver and pick up mail at government offices outside Thurston County. State officials start meeting March 26 to discuss that $700,000-a-year service, followed by bidding and a decision due in early September. Mail service within the county would not be considered.

Another 33 workers do the more than $8 million a year worth of work at the printer that would be considered for outsourcing. That doesn’t include copying, or printing of newsletters, voter’s guides, or materials with personal information.

DES says employees have a chance to be more productive to improve the comparison with the private sector.

“If you’re being considered for that, you’ve got some nervousness about it, but you also have the opportunity to make efficiencies to put you in a better position,” Valandra said.

MANY COMPANIES?

If the budget office gives the go-ahead to contract out, DES will decide which contractors to use and how many.

The contracts could go to a single bidder or to multiple companies.

“It could go either way,” Valandra said, “but we try to get as many businesses involved as possible because one of the things we like to do is encourage contracts for small businesses.”

Companies in the Pacific Printing and Imaging Association are hoping the work will be shared among print shops across the state, not concentrated with a single company

“You get much better competition by spreading out the work to a number of printers,” said Bill Stauffacher, a lobbyist for the association, which represents about 100 of the state’s 450 printers.

The decision to look at what is known as “print fulfillment” – storage, packing and distribution of printed materials – as part of the bid process could encourage the use of a larger company. Stauffacher said it’s mainly regional or national printers that do that kind of work.

Originally, DES planned to seek bids for print fulfillment separately and sign a contract by December. But questions came up about whether state employees should be allowed to compete for those jobs.

OUTSOURCING

A process set in union contracts allows state employees to bid on work. But that doesn’t apply to the new process that is targeting printing, mail and Web design, because of the law passed last year. It allows governors to contract out six government functions every two years.

The same law reshuffled the state bureaucracy to create the Department of Enterprise Services out of several smaller agencies. And it removed a rule that state agencies had to give the State Printer first crack at doing the work.

The first three agencies to award competitive bids after the rule took effect were the Dairy Products Commission, the Lottery and the Secretary of State’s Office, with a dozen jobs between them, according to DES. The state printer bid on four of those, and won just one. The others went to private companies.

Even without the mandate for agencies to use its services, the printer doesn’t need a true sales force, said Beardemphl, the Lakewood printer. It also can outsource jobs that don’t fit its capabilities and take a cut to cover the costs of bidding and managing the contracts.

“If you gave me that same situation, do you know how much more money I would make and how many people I would employ?” he said.

The printer has spent about $19.4 million on print jobs and print fulfilment since April 2011, DES says. About $7 million of that work was contracted out to the private sector.

The change allowing agencies to go outside the printer aligned with the conclusion of a 2011 state performance audit that state printing could benefit from more competition.

State Auditor Brian Sonntag’s report also said the state is duplicating services by having both a central printer and separate state agency print shops.

The audit did say the printer’s finances had stabilized after it had looked likely to run out of cash. The printer charges agencies for services but doesn’t receive money directly from the state’s general fund or turn a profit.

Jordan Schrader: 360-786-1826 jordan.schrader@ thenewstribune.com blog.thenewstribune.com/politics Twitter: @Jordan_Schrader

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