privatization

Legislature could leave JLL when it vacates the Legislative Plaza this fall

It’s at least possible that Chicago-based Jones Lang LaSalle, “Gov. Bill Haslam’s favorite real estate management-services provider, “ won’t get the contract for janitorial and maintenance services at a renovated Cordell Hull State Office Building when the General Assembly move there this fall, reports Andy Sher.

Senate Speaker Randy McNally and House Speaker Beth Harwell confirmed to the Times Free Press that JLL has no automatic lock on a contract for services at the 1950s-era Cordell Hull building when a $116 million renovation is complete.

“We have decided to put it out for bid, and of course, they can bid and other companies might bid,” McNally said. “But we’re looking, you know, for the best deal we can get.”

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Judge rules records of failed Fall Creek Falls privatization effort must be made public

The Tennessee Department of General Services must release records related to the failed privatization effort at Fall Creek Falls State Park, Davidson County Chancellor Bill Young ruled Tuesday in a lawsuit brought by the Nashville Scene and the Nashville Post.

From the Scene’s report:

The case was unique because the state received no bids on a proposal to demolish and rebuild the Inn at Fall Creek Falls, despite amending the original request for proposals several times. A May 1 final deadline passed with no bids. The Scene asked for the records that would normally be available for public inspection at the end of any bid evaluation process.

The state claimed that because no bids had been evaluated, TDGS was not required to release the records associated with the process. The Scene filed suit on May 31.

Chancellor Young disagreed, noting that the state’s public records law instructs that it “shall be broadly construed so as to give the fullest possible public access to public records.” He ordered the records to be made available, ruling that any documents or communications that the state claims are protected by attorney-client privilege must be submitted to the court for evaluation. 

“It’s a good day for transparency in Tennessee,” says Chris Ferrell, CEO of Southcomm, the parent company of the Scene and Nashville Post. “While I’m sorry we had file suit in order to get the state to comply, it’s reassuring that the courts recognize that the state can’t decide to hide things from the public in such an arbitrary way.”

Young instructed Scene attorney John Williams and lawyers for the state to agree to and submit an order to the court by early July. Deputy Attorney General Janet Kleinfelter said in court that the state may ask for a stay of Young’s ruling, pending an appeal.

Open records lawsuit seeks documents on failed Fall Creek Falls State Park privatization effort

The Nashville Post and Nashville Scene, sister publications with the same ownership, have filed a lawsuit in Davidson County Chancery Court against the state Department of General Services under Tennessee’s Open Records Act, contending officials wrongfully refused to release documents related to a failed attempt at outsourcing operation of the Fall Creek Falls State Park Inn.

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State officials give final approval to five-year outsourcing contract with JLL

News release from Department of General Services

The State of Tennessee has executed a five-year contract with Jones Lang LaSalle (JLL) to provide statewide facilities management services.  The contract is effective today (May 26, 2017).

JLL was selected following a two-year multi-step procurement process led by the state’s Central Procurement Office that included representatives from higher education, general government and the legislature.

As we have consistently said, the contract will protect the livelihoods of current state facilities management employees, and is another tool for state departments and institutions to use to keep their expenses low, reducing the need for cost and tuition increases.

To view the contract, (go HERE.)

 Contract Background and Highlights

 ·         The State of Tennessee began to look at opportunities in professional facilities management services after studying results from 10 million square feet of state-owned office buildings currently under a similar arrangement in which taxpayer savings of about $26 million were achieved over three years. An additional third-party inspection of the cost analysis upheld forecasted savings if the program were expanded to more state buildings.

·         Participation by state agencies and institutions is voluntary.

·         The contract includes strict provisions that JLL will retain all current state facilities employees (provided they pass a background check and drug screening).

·         JLL will provide compensation equalization for every employee that is transitioned to ensure that they are made whole at the time of transition.

·         Tennessee’s facilities management program implemented in 2013 is considered innovative nationally, receiving awards from the National Association of State Procurement Officials (NASPO) in 2014 and from the National Association of State Chief Administrators (NASCA) in 2015.

Today the state is also announcing Charles Burkett as the contract governance executive.  A Memphis native, Burkett is a 41-year veteran of the financial services/ banking industry, and most recently a member of the University of Memphis leadership team serving as advisor to the president.  In his role at the university, Burkett was responsible for a range of strategic initiatives including implementation of quality improvement measurements of student satisfaction and managing residence life and dining.

In his new contract governance role, he will be responsible for ensuring the overall oversight of the statewide contract to ensure best service across all stakeholders, and for serving as the main point of contact for interested entities that would like to request a quote for service.

Burkett is a former member of the state’s FM Steering Committee, and will continue to serve as a liaison between the statewide contract with JLL and committee members, which will transition in name to Board of Advisors. Representatives on this advisory committee are from higher education and general government leadership.

Note/UPDATE: The Nashville Post reports Burkett will be paid $95 per hour under a contract, which would be $197,600 for a full year of 40-hour week – more than $20,000 more than his salary at the University of Memphis. Further:

He (Burkett) also was a member of the Facilities Management Steering Committee, which oversaw the secretive two-year process that resulted in JLL’s contract. Roberson said the steering committee will transition to a “Board of Advisors” overseeing the contract.

Roberson said the membership of the new board of advisors could be shaken up, but as it currently stands it consists of the head of the Department of Customer Focused Government, Terry Cowles (salary: $150,000); Bob Oglesby, the commissioner of the Department of General Services (salary: $159,996); Mike Perry, the head of procurement in General Services (salary: $147,900); Larry Martin, the commissioner of the Department of Finance and Administration (salary: $190,260); Brock Hill, a deputy commissioner of the Department of Environment & Conservation (salary: $146,532); Russ Deaton, the deputy executive director of the Tennessee Higher Education Commission (salary: $155,004); Rick Nicholson, the budget analysis director for the Senate (salary: $110,220); and David Miller, the CFO of the UT system (salary: $310,000). TBR has not had a member on the committee since Warren Nichols left for a new job at the beginning of the year but is expected to appoint someone soon.

Outsourcing update: Discontented legislators, JLL satisfaction survey questioned, etc

Some state legislators are not satisfied with Department of General Services Commissioner Bob Oglesby’s response to their request for an economic impact statement on the impact of a new contract for outsourcing management of more state buildings — or with Jones Lang LaSalle’s performance under its current, more limited contract. So  reports the Nashville Post in reviewing the status of Gov. Bill Haslam’s privatization efforts.

An excerpt:

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Comptroller poses 53 questions on JLL outsourcing contract, awaits answers

State Comptroller Justin Wilson’s office has run a proverbial fine-toothed comb through the governor’s potential building management contract with Chicago- based Jones Lang LaSalle, reports the Times Free Press.

The contract is valued at an estimated $1.9 billion over a five-year period, the amount state and higher education facilities are expected to pay for operating their buildings.

As a result of the review, Wilson said in an interview, administration officials have “already indicated to me they will make changes. Now what they are exactly I don’t know.”

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Zero bids for Fall Creek Falls Park privatization

In a stinging setback to its privatization effort for Fall Creek Falls State Park, the Haslam administration’s proposed contract to outsource hospitality services has failed to draw a single bid from would-be operators, reports the Times Free Press.

Kim Schofinski, a spokeswoman for the Tennessee Department of Environment and Conservation, confirmed Wednesday there were no bidders for the request for proposals.

She said the department, meanwhile, is thankful the governor and state lawmakers “allocated funding to enhance the user experience at Fall Creek Falls, and we will evaluate how to best manage those resources as we move forward.”

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Haslam renews defense of outsourcing as most legislators seek delay

A majority of both House and Senate members have now asked that Gov. Bill Haslam’s administration delay implementation of privatization plans for the state’s higher education institutions. But the governor has renewed his defense of the plan, indicating he’s ready to push ahead.

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New outsourcing contract gives JLL a bonus if cost-cutting exceeds expectations

Jones Lang LaSalle’s new contract potentially covers work now performed by about 3,000 state employees who are supposed to keep their positions though the pact gives the company a financial incentive to cut costs as much as possible, reports the Nashville Post.

The contract doesn’t specify an actual number the state will be paying JLL to pay other subcontractors for custodial, landscaping and maintenance work at state universities and agencies across Tennessee, as that will depend on how many campuses opt in or out of the contract. And how much JLL will get paid will also depend on the company meeting benchmark goals and customer satisfaction metrics.

However, the contract also includes a clause that awards JLL 10 percent of any cost savings above and beyond its projected baseline savings in the first year. After that, the percentage decreases each year by one percent, down to 1 percent of savings awards in year 10 of the contract. (The five-year contract has the option of being expanded another five years before the state would have to rebid it.)

…”That’s to reduce operational costs. If you look, it specifically prohibits a reduction in force, period. They cannot reduce the force,” said Mike Perry, the state’s chief procurement officer, during a press conference Thursday.

Yet the terms of the contract include multiple loopholes as to who can be considered “transition employees” and continue on with the subcontractors JLL will hire. Employees must have worked for the state for over 6 months at 30 hours a week or more and be considered to “provide services selected to be performed by the Contractor at a minimum of” 51 percent of their job duties. They must pass whatever background checks JLL deems necessary, along with a drug test. Currently the state does not require either for the majority of its positions.

…Even if employees do pass all the required checks, there’s still no guarantee they’ll be offered the same job, at the same campus. The contract only requires a position be offered in a 50 mile radius. Rehired employees are supposed to be given equitable compensation, but in JLL’s own bid proposal, it admits that an employee with a family of four would have their health insurance premiums double and the out-of-pocket max increase by $2,150. Meanwhile, paid time off will decrease. (A single employee’s health insurance costs will go down, the proposal says.) An employee would ostensibly be paid more to make up for the higher health insurance costs and lack of vacation time, but Perry admitted he had no idea how this would work in practice as far as taxes go.

Note: The post has a copy of the contract posted HERE.

42 legislators ask delay in outsourcing; contract signing ahead of schedule

A week or so after 42 state legislators called for a delay in finalizing higher education outsourcing plans, Jones Lang LaSalle officials signed the company’s contract with the state ahead of schedule.

The Times-Free Press initially reported on the legislators’ letter to Gov. Bill Haslam’s outsourcing czar, Terry Cowles. It asks “that the outsourcing process wait until the General Assembly is able to study and understand the effects on our public services, economy, and state workers.”

The Nashville Post reported Tuesday in an overview of recent outsourcing developments that JLL officials actually affixed their signatures to the contract document on Friday, a week earlier than planned.

The contract is under review by the comptroller’s office before the state can officially sign off on it, but that review could be complete by the end of the day Friday, according to comptroller spokesperson John Dunn. The state’s bond counsel is also reviewing the contract to insure compliance. According to Dunn, that office has been asked to expedite its review but no firm time frame for its completion exists.

But criticism is pouring in from legislators and students, as letters and complaints fly to and fro, and University of Tennessee at Knoxville students held a large protest on Monday.

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