Commentary

Florida Rejects Air Services Privatization Bid

Mark Caputo at the Miami Herald reports that Florida officials have rejected a bid to privatize the state’s air service operation that would have saved taxpayers an estimated $600,000 a year:

The head of the agency that manages the state’s controversial air service for politicians has decided against privatizing the operation, even though a low bidder pledged to save taxpayers up to $600,000 yearly.

Linda South, the secretary of the Department of Management Services, said in a written statement that she canceled bids to have a private company run the air service because her agency provides “the best quality service at the best value.”

The low bidder was incredulous. “It’s a load of junk,” said Robert Feindt, a pilot and bid negotiator for Craig Air Center. “Why don’t they want to save taxpayers money?” Feindt said South was trying to protect her agency’s turf.

The state agency decided to consider bidding out the air operations after a recommendation from legislative analysts, who noted in an October report that flying state politicians and employees has grown in cost. […]

The complex bidding process was divided into multiple parts. But overall, bidders were asked how much they would charge in two scenarios:

• Complete privatization, in which the state would sell its planes and the private company would provide the aircraft, pilots and mechanics. Craig Air Center bid $2.1 million, compared to the $2.7 million it cost the state this year.

• Partial privatization, in which the private company would provide the pilots and mechanics but operate the state’s existing planes, a King Air turboprop and a Cessna Citation business jet. Craig Air bid $640,000, compared to the $864,000 that DMS currently charges.

[…] At least one high-powered legislator, Senate budget chief J.D. Alexander of Lake Wales, said he was concerned with DMS’ decision to cancel the aircraft operation bids. “In these times, we need to save every penny we can,” said Alexander, a frequent critic of state contracting and state plane use. “If we have a vendor who could save us $600,000, imagine how many kids that could help in our budget.”

The discussion over cost savings in this piece obscures something very relevant. There’s nothing inherently governmental about air services, which clearly failed the “Yellow Pages test” here since private bidders actually competed for a contract. As I discussed here, in these fiscal times governments need to be seeking every opportunity to get government out of the business of business and refocus on core priorities and services.

I reported on a similar issue in Florida in a 2006 issue of Privatization Watch, which focused on state universities and agencies engaged in direct competition with private sector cartographic and geospatial industry firms to provide commercial aerial mapping services.

Reason Foundation’s Privatization Research and Commentary

Leonard Gilroy is Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.

The project aims to promote solvent, sustainable retirement systems that provide retirement security for government workers while reducing taxpayer and pension system exposure to financial risk and reducing long-term costs for employers/taxpayers and employees. The project team provides education, reform policy options, and actuarial analysis for policymakers and stakeholders to help them design reform proposals that are practical and viable.

In 2016 and 2017, Reason's Pension Integrity Project helped design, negotiate and draft pension reforms for the state of Arizona's Public Safety Personnel Retirement System and Corrections Officer Retirement Plan, which both passed with overwhelming bipartisan support in the state legislature and were signed into law by Gov. Doug Ducey.

Gilroy is also the Director of Government Reform at Reason Foundation, researching privatization, public-private partnerships, infrastructure and urban policy issues.

Gilroy has a diversified background in policy research and implementation, with particular emphases on competition, government efficiency, transparency, accountability, and government performance. Gilroy has worked closely with legislators and elected officials in Texas, Arizona, Louisiana, New Jersey, Utah, Virginia, California and several other states and local governments in efforts to design and implement market-based policy approaches, improve government performance, enhance accountability in government programs, and reduce government spending.

In 2010 and 2011, Gilroy served as a gubernatorial appointee to the Arizona Commission on Privatization and Efficiency, and in 2010 he served as an advisor to the New Jersey Privatization Task Force, created by Gov. Chris Christie.

Gilroy is the editor of the widely-read Annual Privatization Report, which examines trends and chronicles the experiences of local, state, and federal governments in bringing competition to public services. Gilroy also edits Reason's Innovators in Action interview series, which profiles public sector innovators in their own words, including former U.S. Transportation Secretary Mary Peters, former Florida Gov. Jeb Bush, former Indiana Gov. Mitch Daniels, former New York City Mayor Rudy Guiliani and more.

Gilroy's articles have been featured in such leading publications as The Wall Street Journal, Los Angeles Times, New York Post, The Weekly Standard, Washington Times, Houston Chronicle, Atlanta Journal-Constitution, Arizona Republic, San Francisco Examiner, San Diego Union-Tribune, Philadelphia Inquirer, Sacramento Bee and The Salt Lake Tribune. He has also appeared on CNN, Fox News Channel, Fox Business, CNBC, National Public Radio and other media outlets.

Prior to joining Reason, Gilroy was a senior planner at a Louisiana-based urban planning consulting firm. He also worked as a research assistant at the Virginia Center for Coal and Energy Research at Virginia Tech. Gilroy earned a B.A. and M.A. in Urban and Regional Planning from Virginia Tech.