Source It Out

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Science  19 Jan 2007:
Vol. 315, Issue 5810, pp. 301
DOI: 10.1126/science.1139569

These days, outsourcing is all the rage in the United States; one can follow it all the way from the campus to the national park system, then to Iraq, and finally to our domestic political infrastructure. Beginning with the first: It used to be that faculty members at Generic State U. could be sure that the campus bookstore and food service were home-grown enterprises, staffed by people they got to know. Now those enterprises are likely to be connected to Borders or a multinational food service company. These arrangements, a prominent feature of the outsourcing epidemic, are popularly called public-private partnerships. The term lends a sense of comfort, but it also hides some nagging problems.

The U.S. government is getting into outsourcing through public-private partnerships, big time. In the Bay Area, military base closures have created an appetite for putting private ventures on public lands. San Francisco's most desirable piece of public land, the Presidio, was transferred to the National Park Service after its base closed. Congress then created a special agency called the Presidio Trust, with a management plan demanding self-sufficiency by 2015. Originally, it required occupancy by nonprofits, but given the tough target date, it's hardly surprising that somehow the trustees accommodated Lucasfilm Ltd. Meanwhile, at the old Moffett Field, the National Aeronautics and Space Administration is looking around for new partners. How about Google?


Moving on: The public-partnership responsible for the Iraq mess includes a huge array of private organizations holding outsourced roles. Some are contractors, such as Bechtel and Halliburton, whose high overhead may be justified by the challenge of restoring (or not) infrastructure while being shot at. The other commercial partners are, to put the matter bluntly, mercenaries: well-armed contract employees (think Blackstone) playing roles that are at least paramilitary if not more. This high-water mark in outsourcing for war has put some of the legal risks of public-partnerships on display: The New York Times reports that of 20 accusations against contract employees of criminal abuses against Iraqi and American detainees, none have been acted on. If part of the partnership deal entails immunity, the deal may not be all that wonderful.

When functions vital to a democratic society are partially outsourced to private interests, legal problems arise and social costs are likely to result. To be sure, there are some benefits. Much of U.S. domestic infrastructure has been put into the hands of private commercial entities for sensible reasons. Privately run toll roads are worked into the highway system, and the Internet is a valuable utility that operates well as a public-private partnership. But although voter confidence in the system by which we choose our government representatives is essential, in many places private vendors have provided the electronic touch-screen machines that count the votes. This public-private partnership has produced both technical doubts (how can the voter be sure that the vote gets counted?) and legal ones (can the state know and reveal what's inside the machines?).

A major supplier of such machines, Diebold, is a central player in the debate, partly because its CEO, also the chair of the Republican Party in Ohio, unwisely declared his hope to secure his state's 2004 vote for Bush. The next year, North Carolina asked for bids for machines, with the requirement that bidders reveal the computer codes and other details about how the machines would work. Diebold appeared to get the bid but refused to meet this stipulation, claiming that the information was a trade secret. The state Elections Commission then decided to disregard its own requirement on the basis that no bidder could be expected to meet it. The stalemate broke when, after a court test in which the state's provision was upheld, Diebold withdrew. Meanwhile, another bidder acceded, showing that the requirement could be met despite the commission's earlier conclusion.

Diebold's withdrawal was fortunate, but they are selling machines elsewhere. The lesson from these adventures with public-to-private oursourcing is that if you're going to hire others to do your work, better make them as accountable as you are. Otherwise you've bought yourself a fig leaf.


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