Audit Office reports that the first two privately built prisons there were built 45 percent faster than usual.78 In the United States, one company may have set a record, constructing a new facility in less than 90 days. The firm purchased land, got zoning clearance, lined up financing, and designed, built, and completed a 100-bed
maximum-security juvenile facility in just three months.79
A more representative example is Delaware County,
Pennsylvania. A group of private firms financed and built a new prison in two years less than it took the state to build a similar prison in a neighboring county, built it for only $55.84 million rather than the $93 million estimated cost if built by the county, and is saving the county $1.5 million per year in lower debt costs.80
As officials in Washington State and South Carolina told Governing magazine, without outsourcing, their major infrastructure projects would “still be theoretical doodles on paper.“
D. Outsourcing to Gain Access to Expertise
Most engineering departments cannot afford to retain specialized design experts on their staffs for complex designs that arise infrequently. In these cases, it is more cost-effective to rely on consultants to provide these services. According to CSG data, over 32 percent of state agencies say that lack of state personnel and expertise was an important reason for outsourcing.81 The Wisconsin Legislative Audit Bureau study attributed much outsourcing to need for special skills,82 and a study for the Texas DOT found that one of the key reasons given for outsourcing was lack of in-house expertise.83 “A common theme heard throughout the study is the importance of partnership between TxDOT and private sector consultants, because the use of [engineering] contractors has
changed from merely cyclical to regular involvement for virtually all major projects.”
Consultants have the advantage of drawing from a “larger pool” of projects to become proficient on more- complex designs, while government agencies may not. In California, after court decisions virtually eliminated outsourcing of state engineering work, Caltrans has been on a hiring binge, and 40 percent of the staff has less than three years of experience.85 At both local and state levels, consultants have much more opportunity to build up expertise, because except for road and bridge projects, major facility projects for government employees come along rarely. Consultants, not tied down to one jurisdiction, move immediately to another project when they finish one; thus, they can build up much greater experience and more diversified expertise.
National Audit Office, The PFI Contracts for Bridgend and Fazakerley Prisons (London: Comptroller and Auditor General, 1997), p. 5.
Cathy Lazere, “Privatizing Prisons,” CFO: The Magazine for Senior Financial Executives (February 1997), p. 41.
Paul Kengor, Prison Privatization in Pennsylvania: The Case of Delaware County, Allegheny Institute Report No. 99- 09 (Pittsburgh: Allegheny Institute for Public Policy, 1999), p. 9.
Chi and Jasper, Private Practices, p. 8. Wisconsin Legislative Audit Bureau, Evaluation of Use of Engineering Consultants, p. 10. PricewaterhouseCoopers, Highway Design Cost Comparison (Austin: State of Texas, February 1999), p. 55. Ibid., p. 56. Julie Tamaki, “Engineer’s Feud May Stall Plan to Unsnarl Traffic,” Los Angeles Times, July 11, 2000, Section A.