Business (Managing K-12 Education)

Making the Outsourcing Decision

Three school districts share how they determined their choice.

Outsourcing

illustration by brian iSHaM

The push for outsourcing comes from two things,” says William J. Mathis, managing director of the National Education Policy Center at the University of Colorado in Boulder. “The first is the recession and a desire to save money. It’s combined with accusations of schools being profligate in their spending. Of course, it is public money, and there is room for economy. The second is a political trend to outsource a lot of things as an ideological solution to solving the world’s problems.”

Strong opinions aside, the truth is that many school districts outsource one or more services, and for reasons that include financial savings, as well as enhancing organizational flexibility, economies of scale, risk avoidance and access to capital investment. In fact, it may be something you’re considering right now. If so, here are three school districts’ stories of how they made the decision.

Pendergast Elementary School District

“We were having to outsource 50 to 70 percent of our speech/language services because we couldn’t find enough speech therapists in our area to service our students,” says Brian Mee, SFO, RSBA, assistant superintendent for Business Services of Pendergast Elementary School District in Phoenix and immediate past president of ASBO International. The Special Education Department had 13 speech therapists on staff, and 30 to 70 percent would leave yearly. Unable to fill all the positions, the department would get a few therapists from one company and a few from another.

In an attempt to get a handle on the situation, the department implemented a master speech therapist paradigm with highly skilled assistants overseeing a group of skilled speech assistants. “Even with that model, we still couldn’t fill all the positions,” says Mee. “The problem was that bringing in the outside therapists was really expensive: up to 30 percent more than we would pay to have them in-house.”

After looking at options, the Special Education Department chose to take the program to bid. “We needed to see what they would charge,” Mee says. “One firm was able to provide all the services and save us money. We’re still evaluating the master speech therapist model, but we are able to identify more students with speech needs and serve more students.”

The contract, according to Arizona law, is an annually renewable five-year contract. Every year the district does an evaluation and can part ways if it isn’t working.

“I don’t know that there was an easy part of the decision-making process,” Mee says, “because our Special Education Department went through a tremendous amount of due diligence. First and foremost, you have to make sure you’re getting quality services to meet students’ needs. Once you’re satisfied that is the case, the next thing is, is it going to cost more or less? A better program may cost more. A better program may cost the same or less, and that’s when it makes sense to move forward.”

Orange County Public Schools

After more than 20 years of outsourcing periodic maintenance of boilers, chillers, cooling towers and other pieces of major equipment to numerous providers, administrators at Orange County Public Schools in Virginia just signed a performance contract featuring energy- and efficiency-related measures to upgrade lighting, building envelopes and HVAC systems. “Within that contract,” says Doug Arnold, coordinator of Facilities and Maintenance, “is consolidating all services with one provider. It will generate a little financial savings, but also a lot of savings in terms of confusion.”

The $6.2-million-contract is a 15-year payback with work to be completed within 18 months (of the May 2013 interview).

You might think that Arnold started selling the idea when he first came on board with the county two years ago. If so, you’d be wrong. In fact, it was the superintendent who approached him. “Once we explained the details and the process, the school board backed us up,” he says. “The Board of Supervisors was a little more challenging. Even though the project will pay for itself, the board saw the $6.2 million as debt. That was the hardest sell.”

Great Valley School District

In Malvern, Pa., administrators at Great Valley School District outsource a number of services, each with its own story.

“We had issues hiring qualified personal care aides,” Chuck Linderman, RSBA, director of Business Affairs and 2011 ASBO International president, explains the decision to outsource this service. “The firm we contract with has prequalified aides, even ones with healthcare backgrounds. This allows us to place aides more quickly when new students arrive than we could do on our own.”

Transportation, which was outsourced by the district many years ago, was done for the same reason: the district had difficulty securing drivers. In addition to drivers, the contract stipulates that none of the buses are more than six years old. “In this economy,” says Linderman, “I’m not sure a school district could replace buses every six years and keep up with safety standards.”

The decision to outsource daycare, which includes before/after school care and all-day kindergarten care (kindergarten is just a half day), was easier. “It’s a public relations thing,” Linderman says. “If you have a high-quality company, the parents deal directly with them so you’re not handling typical daily issues. When we did a competitive RFP, our number-one criterion was reasonable cost to the parents. The second was how much revenue we could generate from the contract. We may not have chosen the firm that could bring in the most revenue, but revenue combined with affordability is working well for us.”

Finally, the district outsources a portion of its technology department. “It was fairly expensive to bring in and train low-level technicians,” Linderman notes. “We had a tremendous turnover.” Now, entry-level computer technicians are outsourced, and the district retains higher-level support in-house.

Clearly, the decision to outsource is unique to each school district and each service being considered. Here’s what to take away from the experiences shared here: Don’t expect the decision-making process to be easy. Communicate clearly and often. It may turn out that outsourcing isn’t right for your situation. However, if it is, then you want to garner buy in, pay attention to your state’s bid laws and take care in crafting your contract. 

This article originally appeared in the June 2013 issue of School Planning & Management.

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