Reader Dan on Privatization in Florida

Reader Dan sends along this little Editorial from the St. Petersburg Times about privatization in Florida:

In pulling the plug on an $89-million accounting system disaster, Florida Chief Financial Officer Alex Sink has delivered a potent message to those who do business with the state: Get the work done right, on time and on budget, or be gone.

Private companies can and often do perform valuable work for government, but the failed “Project Aspire” is a case study in how wholesale privatization can run amok.

The state set out to integrate all of its accounting systems so it could track every transaction from every agency. Three years later, it has spent $89-million with little to show for it. The primary contractor, BearingPoint, has already left the job. It blames bureaucrats for constantly changing their minds. Bureaucrats blame lawmakers for changing the funding. Meanwhile, the state still uses its old accounting methods.

This may be the first of more to come. Project Aspire is one of three major privatization projects begun during the tenure of former Gov. Jeb Bush and shielded from oversight. People First, a nine-year, $350-million agreement with Convergys Corp. to privatize personnel services, is at least as problem-plagued as the BearingPoint venture. A legislative analysis last year reported that 21 state agencies still kept paper files because they didn’t trust People First. One agency was forced to increase its human resource budget by $1.3-million to cope with the new system.

Bush once vetoed a legislative attempt to review the contracts, but Sink and Gov. Charlie Crist have committed to holding the businesses accountable.

“I’m all for privatization,” Crist said in response to the Project Aspire action, “but only if it benefits the taxpayer and it’s done with integrity. … If it’s bad, get out and stop the waste.”

Reader Dan follows this up with a series of very naive questions:

Why would anyone spend $350 or $89 million with no oversight? Anyone! How is efficiency even inserted into the project? How does any privatizing proponent let this happen or not blow the whistle? Does it not hurt the cause?