FOR IMMEDIATE RELEASE

Report Urges Caution for Schools Contracting Out Support Services
Outsourcing could save money, but it often costs more and can have negative effects on schools and communities

Contact: Teri Battaglieri (517) 203-2940; (email) greatlakescenter@greatlakescenter.org
William J. Mathis (802) 247-5757; (email) WMathis@sover.net

EAST LANSING, Mich., (March 31, 2008)—Should transportation, food and custodial services be provided by employees of school districts, or should those services by outsourced to private companies? Does contracting out these services save the district money and add flexibility? According to a new report that takes an honest look at the evidence, the answer to each of these questions is, “sometimes, but many times not.”

The report, A Guide to Contracting Out School Support Services: Good for the School? Good for the Community?, was funded by the Great Lakes Center for Education Research and Practice and was written by Drs. William J. Mathis and Lorna Jimerson.

The authors are both experienced school administrators. Mathis, an adjunct associate professor of school finance at the University of Vermont, is superintendent of schools for the Rutland Northeast Supervisory Union in Brandon, Vermont, and Jimerson, a former policy analyst with the Rural School and Community Trust, is a member of the school board for Vermont’s Champlain Valley Union High School and previous president of the Vermont School Boards Association.

The policy brief is based on a review of research and commentary on the practice of contracting out support services and includes a series of recommendations directed at school administrators and school board members.

Arguments for contracting out such services are many. Advocates view outside contractors as more likely to deliver their services at lower cost due to competition. Firms that specialize in a particular service, such as transportation or food, might enjoy economies of scale, with after-profit savings passed on to the school district and its taxpayers. Additionally, contractors might provide high-quality services as experts in their field.

Mathis and Jimerson do not issue blanket praise or a blanket condemnation of contracting out. Instead, they point out that evidence is decidedly mixed on whether the practice necessarily saves schools money or otherwise offers improvements over having support services performed in house.

For example, Mathis and Jimerson write, “Cost cutting is not a certain outcome,” pointing to case studies of contracting out vehicle or highway maintenance in Albany, N.Y., and in Massachusetts found costs increased by as much as 20 percent.

Moreover, they contend, even when schools and school districts can save money by contracting out services, the practice can have mixed effects. These ramifications may complicate the decision of whether contracting out is the best solution for any particular school or district. Contracting out can result in hidden costs that reduce or eliminate whatever savings are promised. The practice can also result in problems with quality control, in greater demands on administrators who face the task of monitoring contracts, in the loss of control and restricted flexibility an outside contract may impose, and in social costs to communities in which schools operate, such as lower wages and reduced or eliminated benefits when contractors take over certain services.

Mathis and Jimerson offer a series of recommendations aimed at schools and districts that are still deciding whether to contract out services. Other recommendations are aimed at schools and districts that have already decided to do so. Among other things the recommendations call on school officials to closely examine contracting out decisions and the details of proposed contracts.

They conclude, “It is the requirement of school leaders to take a broad, expansive and careful look when considering these decisions.”

The full policy brief is available at http://www.greatlakescenter.org.

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