Make Government Compete

Competition would improve Virginia's Efficiency

“The fastest way to save money and increase value is to force public institutions to compete.” That’s what the authors and government-reform experts David Osborne and Peter Hutchinson quipped in their recent book, The Price of Government. Indeed, an overarching recommendation of Gov. Arnold Schwarzenegger’s Performance Review of California state government was to introduce more competition for government services. Governments at every level, around the country, have introduced competition to to find cost savings and greater performance.

Osborne and Hutchinson further add that competition and other reform tools are “well beyond the experimental phase… [They] have proven their value in many different public contexts— Waste no time in implementing them.”

Virginia government has a long history with competition. There was a time when the Commonwealth was considered ahead of the curve. Virginia created the Commonwealth Competition Council (CCC) and passed the Public-Private Transportation Act (PPTA) and the Public-Private Education Act (PPEA). Unfortunately, times have changed. Yes, the infrastructure that was put into place is still there. Although we are taking steps to bring more performance and accountability to state government, we’ve failed to take full advantage of competition in recent years.

Once considered a pioneer and leader in the movement, Virginia has fallen behind in recent years. However, this past legislative session saw an enhanced commitment to competition. Several competition-oriented bills were passed. Perhaps the most noteworthy is HB 1043, the Competitive Government Act, introduced by Del. Christopher B. Saxman, R-Staunton, and signed by Gov. Mark R. Warner. The bill requires every state agency to analyze its workforce and identify competition opportunities. The process is similar to the rules and guidelines of the federal competitive sourcing plan and procedure.

Virginia might well look at Florida and Gov. Jeb Bush’s creative actions that have vaulted that state into the national spotlight along with California. In March, Governor Bush created the Center for Efficient Government – in many ways, it is similar to our Commonwealth Competition Council. However, this Florida Center’s assignment goes much further to include identifying a list of competition opportunities within state government, and the creation of new standards and processes for carrying out those competitions. The new process has attracted interest in several other states and is quickly becoming the model to emulate – governors in South Carolina and Kentucky are both seriously considering adopting a similar approach.

Florida has developed a centralized process, modeled after the United Kingdom for evaluating when and where competition is appropriate, as well as evaluating the competitions and determining who is the best source to deliver services. The process consists of a robust set of standards, templates, guidelines and a transparent method of managing each competition initiative.

The process being developed in Florida reviews a competition initiative at critical stages in its lifecycle to validate that it can successfully advance to the next stage. It is also designed to couple a more transparent process with more predictable costs and outcomes.

There are five gates, or points at which an Oversight Board evaluates a project, during its lifecycle: two during the planning phases of an initiative and three during implementation. The process includes the development of a business case, where the goals or purpose of the project are articulated. In addition, options are identified and options are presented for the state to pursue. If a strong business case cannot be created, the project is dead since this would indicate there is not strong purpose for the program in the first place. Stages two through five outline the procurement process, contract and transition management, as well as post-implementation strategies including performance measurement and evaluation.

The purpose of these procedures is to provide a thorough assessment at key decision points in the process of outsourcing a government function or service.

Florida’s Center for Efficient Government created the most transparent, accountable, and performance based process out there. Virginia should take notice and consider moving in the same direction.

Serious reform and serious savings are still possible to achieve. Our governor and other leaders continually affirm their commitment to more competition and accountability for finding budget savings. Lessons from efforts in Florida, California and elsewhere can dramatically enhance this effort.

Virginia can once again be the recognized leader in making government more efficient by taking a look at Florida and California and then stepping forward with its own exciting “competitive government” program. The groundwork has been laid over the past few years. Now might well be the time to move forward more aggressively.

Geoffrey Segal is director of privatization and government reform at Reason Foundation.