What's wrong with Muni privatization proposal

1998-11-22 04:00:00 PDT SAN FRANCISCO -- San Francisco progressives and unions are on target when they oppose the kind of privatization that was recently proposed for Muni, the local transit agency. The contract with an international management consultant effectively strips the core worth of privatization - it lacks competitive bidding, accountability, and responsibility. One contractor was considered. No competitive bidding occurred. This isn't effective privatization or contracting out.

If we're going to experiment with privatization for Muni, let's get it right. First, privatization is effective only when based on solid competitive bidding. Secondly, privatization works when the private contractor is accountable and responsible for achieving clear and measurable performance standards. When the contractor only advises and is not held accountable for implementing its recommendations, the root problem has not been addressed - in this case, lack of performance standards for Muni for its drivers, maintenance workers and especially management.

As a customer-based operation, Muni should be held accountable to the standards required by all transit services. It should be safe, on time, and friendly, with buses that are clean and mechanically sound. Many other transit agencies across the country have learned that through competitive bidding, industry performance standards can be achieved.

Privatization is one way through which a governing agency supplies a service for which it is responsible. The governing agency uses private contractors to provide the actual service. But there must be a process and it must be strictly followed. There must be competition for the contract. The contract must carefully set out clear performance standards. The potential bidders must be qualified and prove their proficiency through a detailed description of previous success. There must be a squad of contract administrators to monitor the contract. There must be a time limit on the contract. There must be penalties and rewards for the service. Without these elements, privatization can drift into favoritism, union busting and simple subterfuge of civil service - precisely the charge made by those who oppose privatization.

For the proposed Muni contract, no requests for proposals were sent out and no qualification statements were reviewed other than the selected bidder. Further, in this case, the contractor is responsible only for offering recommendations, not implementing them.

For examples of how to enact competitive bidding, Muni and the Mayor Brown can learn from two recent local contracts - the Presidio Trust's Letterman Project and a large hotel project near Moscone Center. In each case, the responsible agency set out the project's parameters in detail. Prior to choosing finalists for the contract, they required every participant to provide detailed background on previous experience. As a result, they filtered out all but the top qualified developers. An independent panel evaluated the candidates and their proposals.

The mayor appears determined to issue the contract to the single contractor. But if Muni doesn't improve, don't blame "privatization." When the day comes that competitive bidding is introduced to Muni, and that day will come, the Board of Supervisors and the mayor should follow the procedures precisely: Create competition, create a solid contract with performance standards, and create the means to reward or fire the contractor if those standards are not met. That is how we created the greatest market-based economy in the world and some of the best bus and airlines in the world. If followed, the final winners of this competition will be Muni's riders and commuters.<