Less than a year ago when Gov. Dannel P. Malloy was on the campaign trail, he chided then-Gov. M. Jodi Rell for cutting funding to the state Contracting Standards Board. On Wednesday, Malloy sought to partially neuter the same board by asking the legislature to give him the authority to privatize any state service he sees fit without a cost benefit analysis.
“This decision was short-sighted, and it was wrong,” said candidate Malloy. “Everyone understands that Connecticut is facing dire financial circumstances, but we need to realize the difference between fat in the budget that can be trimmed, and necessary programs that actually save money when properly funded.”
But facing an unprecedented and untenable fiscal situation, Malloy will ask the legislature to suspend a section of state statutes that requires the Contracting Standards Board to conduct a cost-benefit analysis before allowing a service exclusively performed by state employees to be privatized.
“It would allow us greater latitude to privatize services during the next two years,” Malloy’s Budget Director Ben Barnes explained.
Malloy’s Senior Communications Adviser Roy Occhiogrosso said it was too soon to speculate about which areas of government likely will be privatized.
“When you have potentially thousands fewer employees able to deliver certain services across state government, then you have to take a look at each and every one of those services,” he said. “Where there are services that you want to continue to provide and you don’t have the ability to provide them with state employees, then they’re going to need to be privatized.”
The state employee unions have been big supporters of the Contracting Standards Board, which was created in 2005 following the contracting scandals of former Gov. John G. Rowland, and amended in 2007 to allow for cost-benefit analysis of privatizing state services.
“What this reflects is making an important public policy position without thinking it through,“ Matt O’Connor, spokesman of the State Employees Bargaining Agent Coalition, said. “Were there not this incredible pressure and shrinking fiscal year calendar, I’m confident this would not be on the table.”
When Rell cut their budget in 2009 and 2010, all the board was able to get done was a cost-benefit analysis of railroad bridge inspections. O’Connor said the board discovered it was cheaper to allow Transportation Department engineers to do the job, rather than a private contractor.
However, combined with Malloy’s proposal to slash 817 Transportation Department employees, O’Connor said he has to wonder if the state is setting itself up for another Interstate 84 debacle.
O’Connor said the reduction in the state employee workforce in 2002 and 2003 included a lot of Transportation Department engineers who could have overseen the project. But oversight of the project’s oversight was outsourced to the Maguire Group Inc.
A state employee not assigned to the widening of Interstate 84 in Waterbury and Cheshire discovered the storm drains installed by the contractors were not constructed properly. A DOT report later found that about 270 of the 320 drains were improperly constructed. The legislature’s Transportation Committee, then headed by Donald DeFronzo, Malloy’s Commissioner of Administrative Services, held hearings on the issue in 2007 prior to pushing through changes to the Contracting Standards Board.
Former Rep. Chris Caruso of Bridgeport, who took a position with the Malloy administration earlier this year, championed the contracting issue and ushered it through the legislature. It’s unclear if anyone will pick up the torch when the legislature convenes today.
O’Connor said the Contracting Standards Board is so important that it was included in the SEBAC agreement.
“We have language in the agreement referring to the contracting standards board because it saves money and eliminates waste,” O’Connor said. “We should not be taking it off the watchdog perch it has been on.”
Meanwhile, O’Connor said union leaders have been meeting all week trying to come up with a way to salvage the concession package it tabled Monday.
“We understand the position the governor’s in, but having said all that we’re committed to a mutual agreement,” O’Connor concluded.