Billy Hamilton, former deputy state comptroller observes and offers tips about privatizating state functions. Hamilton has served Democrats such as the late Bob Bullock and Republicans such as former Comptroller Carole Keeton Strayhorn. Billy Hamilton believes that “outsourcing” done smartly can be useful.
"The state shouldn't be in some businesses, because there are just some things that are not inherently governmental," he told the House Select Committee on Government Efficiency and Accountability. He also added to it saying that, “it's a mistake to outsource because you believe business always runs faster and leaner.” He further said, "A lot of people treat outsourcing as a philosophy of government when it's really just a business decision," he said.
On Gallego’s question about problems with Texas outsourcing efforts, Hamilton said there is a "weird dynamic between state and vendors where the state people sort of imagine in their heads what they want, but can't articulate it on paper, and the vendors -- who want these very large projects -- say, 'Yes, we can do whatever you want.' And then once the contract is signed, ... things go awry." Bureaucrats ask for things they believe they requested, he said. Contractors respond that it will take a change order and cost the state more money. Things then go downhill rapidly, Hamilton said.
Rep. Pete Gallego, D-Alpine, the panel's chairman also asked Hamilton to recommend places to save money, because the state faces a budget shortfall of as much as $18 billion. To this Hamilton suggested, "The problem Texas is going to have is really a testament to how conservative and fiscally prudent it has been over the past decade," he said. "It's like you trained yourself to run in a triathlon. You've got all the fat and everything off. And now you're confronting this problem, which is an economically based problem. People are saying well, you just need to drop another 10 or 15 pounds and everything will be fine. The problem is, you already dropped the 10 or 15 pounds. This is not an inefficiently run government and it's going to be hard" to find cuts.
Hamilton’s Tip on Outsourcing:
• Don't expect savings anytime soon
• Check out other states that tried doing the same
• Ensure that the private sector's are offering to do it for 30 to 40 percent less than state agency can
• Before soliciting bids, one need to write down to the tiniest detail
• Bring good lawyers and don't walk away when the deal is inked.
"The state shouldn't be in some businesses, because there are just some things that are not inherently governmental," he told the House Select Committee on Government Efficiency and Accountability. He also added to it saying that, “it's a mistake to outsource because you believe business always runs faster and leaner.” He further said, "A lot of people treat outsourcing as a philosophy of government when it's really just a business decision," he said.
On Gallego’s question about problems with Texas outsourcing efforts, Hamilton said there is a "weird dynamic between state and vendors where the state people sort of imagine in their heads what they want, but can't articulate it on paper, and the vendors -- who want these very large projects -- say, 'Yes, we can do whatever you want.' And then once the contract is signed, ... things go awry." Bureaucrats ask for things they believe they requested, he said. Contractors respond that it will take a change order and cost the state more money. Things then go downhill rapidly, Hamilton said.
Rep. Pete Gallego, D-Alpine, the panel's chairman also asked Hamilton to recommend places to save money, because the state faces a budget shortfall of as much as $18 billion. To this Hamilton suggested, "The problem Texas is going to have is really a testament to how conservative and fiscally prudent it has been over the past decade," he said. "It's like you trained yourself to run in a triathlon. You've got all the fat and everything off. And now you're confronting this problem, which is an economically based problem. People are saying well, you just need to drop another 10 or 15 pounds and everything will be fine. The problem is, you already dropped the 10 or 15 pounds. This is not an inefficiently run government and it's going to be hard" to find cuts.
Hamilton’s Tip on Outsourcing:
• Don't expect savings anytime soon
• Check out other states that tried doing the same
• Ensure that the private sector's are offering to do it for 30 to 40 percent less than state agency can
• Before soliciting bids, one need to write down to the tiniest detail
• Bring good lawyers and don't walk away when the deal is inked.
