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Fulton County Schools Reps Praise Outsourcing of Capital Program Management

Leonard Gilroy
October 23, 2009, 5:32pm

A reader forwarded an article in the October 2009 edition of The School Administrator (a publication of the American Association of School Administrators) that's worth a read.

In the article, Fulton County Schools (Georgia) chief of operations Patrick Burke and colleague Jennifer Klein tell the story of how the FCS achieved dramatic results from privatizing the management of its capital improvement program (e.g., new school construction, etc.) in response to long-standing problems of inefficiency and rampant cost-overruns under public operation.

The school board opted to change the way it managed construction through a type of outsourcing known as professional program management. In 2004, the board entered into an agreement with Parsons Corp., an international firm headquartered in Pasadena, Calif.

The school board's president, Linda Bryant, says of the decision to look outside for better management, "We needed better savings and more control and accountability for construction spending. Outsourcing our capital programs has gotten us better pricing from an honest group of suppliers and contractors and definitely more accountability." [...]

So what is professional program management? First, it is not a euphemism for facility management. Facility management is the day-to-day care and operations of the existing buildings, including repair and general upgrading of facilities. The Fulton County Schools still maintain a full facilities and maintenance staff.

Program management is a comprehensive method of managing a capital improvement program that covers planning, pre-design, design and construction oversight. While architects, engineering firms or construction companies may provide program management services, several firms, such as Parsons, Jacobs, MACTEC and PBSJ, specialize in K-12 program management. [...]

New approaches to contracting, cost control and capital projects management netted documented savings in excess of $6 million in the first year of operations alone, offsetting the fee to Parsons and yielding significantly better results than in-house. These changes continue to reap significant savings, particularly in the areas of general conditions costs, geotechnical fees, change orders costs and renovations management, giving the lowest possible cost for each project.

Prior to outsourcing, the school system paid general conditions fees for construction management at risk contracts, which cover such costs as management items over and above construction materials and labor. With Parsons, we pay no fees in this area, saving $3 million per year. Also, the company manages contracts directly for the school district for geotechnical surveys and studies and requires the architects and contractors to follow procedures that reduce design cost and overhead fees, saving the district $450,000 in architect and engineering expenses. [...]

Bryant [...] is convinced the outsourcing arrangement has given the school system "more bang for our buck. … We are now on time and on the money or even under budget." Dean, the previous board president, said, "Now I have the confidence I can spend my time and energy on student achievement, policy and overall budget management. I don't have to worry whether capital programs are running well. They've freed me as a board member to do my true task."

Read the whole article for a client/administrator perspective on the benefits of outsourcing—this is straight from the source. The quotes alone should be enticement enough. More on non-instructional school services outsourcing here.

One more thing. Poor Fulton County is well-known for its tax and fiscal policies that prompted roughly 200,000 citizens to effectively secede from the County via municipal incorporation in recent years. Those new cities are almost entirely privatized outside of public safety services. As if that's not enough of a signal to the County that it should be seeking increased efficiencies and cost savings through more (and more robust) competitive service delivery, here comes an example from its own school board.

» Reason Foundation's Annual Privatization Report 2009
» Reason Foundation's Privatization Research and Commentary


Leonard Gilroy is Director of Government Reform


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