Wednesday, May 31, 2006

Gov. Daniels Takes Ownership Of FSSA Privatization Deal

Niki Kelly of the Ft. Wayne Journal-Gazette reports today that Gov. Daniels has decided he's going to have the final say in the awarding of a contract to privatize much of FSSA's welfare-related services in a deal worth an estimated $1 billion. Kelly writes:

Gov. Mitch Daniels has inserted himself into the attempt to privatize the Family and Social Services Administration’s eligibility operation.

In a response letter released Tuesday to AFSCME Council 62 – a state employees union – Daniels said the decision is an important one for the state, and “it will be made by me and me alone.”

FSSA this year sought bids from outside companies that want to collect information from applicants and determine eligibility for Medicaid, food stamps, child-care vouchers, welfare and several other assistance programs.

The contract is estimated to be worth $1 billion over 10 years.

About 2,600 state employees perform those duties at county offices around the state.

As AI was the first to report, FSSA Secretary Mitch Roob formerly worked for ACS, one of the two finalists for the contract, immediately prior to joining the administration. Roob has reportedly removed himself from the decision-making process, although that was not made known until the agency's spokesman Dennis Rosebrough was asked about it. Roob did, however, participate in the "philosophical and policy discussion behind seeking bids from the private sector" Kelly reports.

Kelly also reports that the Governor has appointed an interagency team to review the two bids and decide whether to move forward. The team is made up entirely of Daniels political appointees, none of whom know anything about the services FSSA is planning to privatize under the deal. They are: deputy chief of staff Earl Goode; Department of Administration Commissioner Carrie Henderson; Nate Feltman, chief of staff and general counsel for the Indiana Economic Development Corp.; Karl Browning in the Office of Technology; State Budget Director Chuck Schalliol; and Debra Minot, director of the State Personnel Department.

Kelly said the decision came in response to a letter the Governor received from AFSCME Executive Director David Warrick. His concern was that the privatization would result in the loss of persons who "understand the [welfare] system" and "can help those most in need navigate the process." Warrick has also asked the agency to provide a cost-benefit analysis, which only seems appropriate, but Daniels refused to provide one Kelly reports. "There is no evidence anywhere to think that using a private company will solve the error rates and waste," Warrick told Kelly. "If there is, I wish the governor would show us and Hoosier taxpayers who will be footing the bill for this risky privatization scheme,” he said.

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