We recently reported that we’d found private contractors working for the City of Los Angeles who earn Bell-like salaries. We’ve done a little more digging on the City’s website and easily found ten more City contracts that clearly reveal that the rates charged by private contractors are far higher than any public employee would ever receive for the same job.
A few examples:
The rate for a private Structural Engineer is $257 per hour.
The rate for a private engineering Project Director is $287 per hour.
The rate for a private Geologist is $225 per hour.
Some of our critics have correctly pointed out that these fees are what contracting companies charge on behalf of their employees, not necessarily what the workers themselves make. But this argument misses the bigger picture.
First, we have no way of knowing how much the individual worker makes because private contractors are neither accountable to the public, nor compelled to reveal their inner workings, the way the City is. (Want to see how much public employees make? Just click here or here.)
Additionally, no matter who gets the money in the end, the City is still paying private contractors huge sums that are several times greater than those paid to public workers, even when you include health, retirement and other benefits. To use an earlier example, the rate for a computer consultant for engineering behemoth CH2MHill, Inc. is $260 an hour, whereas the rate for a top-earning Senior Systems Analyst II employed by the City is just $60 an hour. Ideally we’d hear a compelling reason for the discrepancy in pay, but we may never get to the bottom of it because, again, private contractors are not required by law to reveal their practices.
Second, and more importantly, the City is not overseeing these private contracts. The City’s public database of contracts is woefully incomplete and Controller Wendy Greuel recently released an audit in which she explicitly stated that “the City is lacking the essential controls and oversight necessary to ensure that hundreds of millions of dollars expended through contracts are really the most efficient and cost-effective use of taxpayer dollars.”
Greuel’s report found that in one-third of cases, no review was ever performed “to determine whether outsourcing was the most cost effective and efficient option.” (Not insignificantly, that statement doesn’t mean that in the two-thirds of cases where reviews were performed, outsourcing was the most cost effective and efficient option.)
In sum, the widespread use of private contractors by the City of Los Angeles is a practice that makes a mockery of the concept of public accountability. Even in the case of Bell, the officials’ outsized salaries were a matter of public record, even if that record was overlooked. When it comes to private contractors, the record doesn’t even exist.
the far right want to take parts of the State Government Private where there is no accountability?
This is outrageous…
Sounds like Greed is what they like and like that movie line where the Wall Street type says “Greed is Good” is what the far right wants, Not sensible Government that can do what is needed for It to succeed in Its day to day tasks.
I wonder what the far right like the Howard Jarvis types are smoking?
Red County blogger Matt Cunningham makes as $200 an hour as a flack for the OC Children and Families Commission. Here’s a nice little post about Cunningham’s billing to write an op-ed for Hugh Hewitt.
http://www.fullertonsfuture.or…
There’s lots of lobbyists and pr guys making $200 an hour plus doing consulting for government agency on the taxpayer dime.
Even worse that the $257 an hour for a Structural Engineer, who may in fact, actually be engineering a structure instead of riding a patronage gravy train.
What does this post add to the discussion that the previous post lacked? I see no new content here. No links, no link to the audit so we could read it ourselves, no other backing information, when taken on top of the previous one this post is 99% contentless.
To go from the contract value to the income the end worker actually makes, divide by two and you’ll be roughly correct.
So the structural engineer probably gets about $128 per hour, which would be a very high salary if he/she could make that for 2,000 hours a year, but he/she will often be out trying to drum up new work.
Now, I’m all for having the state directly employ more professionals and do less contracting out. But the kind of expert who can design a bridge costs a lot of money, and should.
And for the state to have these guys on staff, the overhead costs would probably wind up at about 50% of salary.
I wonder how many hours those contractors work. To my knowledge, most City Attorneys are paid over $300/hr, though I don’t think they work too many hours for the city. 25% of Attorneys in California bill at over $390/hour, so it’s not so controversial if the City of Carson, for example, pays their City Attorney $315/hour. Likewise, $225/hr, for an expert geologist, probably isn’t an example of taxpayers being bilked; it’s probably just the going rate. On the other hand $800K+ for a City Manager of a city with under 40,000 people is really outrageous. I think it’s ridiculous to defend that.
To quickly staff a project, governments don’t want a laborious competitive bidding process. Solution? They draft standing agreements with a few lucky Preferred Contracting Firms. These firms are so enmeshed with the agency they end up drafting project proposals, outlining tech specifications and managing the agency’s management.
In my day (80s-90s) hourly billing rate is 3-4 times the amount that earned by the worker.
for private engineers and geologists.
Yes, the city could hire some more cheaply, but that would mean they’d have to pay them full time and supply offices and support staff. The real question isn’t the hourly rate, it’s how many hours to just one person. The advantage of the outsourced firm is that they pay for training time, vacation time, and they probably come on projects in a bursty way, that is, providing say a month or two of 20 hour weeks. They also hold the liability rather than the City. These engineers would also have a wider range of experience, generally, working on different kinds of projects, which is sometimes an advantage and sometimes a disadvantage.
So, these aren’t Bell-like, not at all. That’s not to say that they couldn’t use a good analysis and audit, though.