Tom Corbett Doesn’t Understand Anything, Probably Hates America

on Thursday, January 17, 2013

The levels of ineptitude government officials at all ranks have shown for controlling costs and fiscal frugality never ceases to surprise me. While Republicans maintain they are the party of fiscal conservatism, the only real difference I have seen between their approach and that of Democrats is the amount of hypocrisy that they engage in while overspending.

Case in point, the Governor of Pennsylvania (my home state), Tom Corbett. Since elected to office, Corbett’s primary focus seems to be making our environment dirtier, our children stupider, and our workers poorer, all normal traits of the fiscal conservative. But now, in the name of small government, Corbett has identified that our state run lottery system needs to be outsourced. Before I get into the problems I have with his approach to bidding out this project, let’s review what he chose to outsource.

The Pennsylvania lottery system is one of the best run state programs we have. All proceeds go to older Pennsylvanians (every advertisement informs you of this), providing billions every year to our aging population. This program offsets costs other states normally incur to provide social services to the elderly, including programs that make sure victims of abuse and neglected are supported and cared for. The program is something Pennsylvania can be proud of, and as my father-in-law likes to say, “If it ain’t broke, don’t try to fix it.”

Instead, we are outsourcing it. If Corbett wanted to outsource a program that nobody likes, the obvious choice would have been our state run liquor stores. The program is a revenue producer for the state, but the majority of the population would prefer privatization. Picking the right “low hanging fruit” matters when it comes to outsourcing or any type of strategic sourcing, and if he picked state run liquor stores, he would have been a hero to Republicans and Democrats alike.

So OK, he didn’t pick the low-hanging fruit, but since this is supposedly a cost savings measure for the state, he must have gotten at least three bids, right? Wrong. Frugal Tom gets one bid, from an overseas firm no less, and awards the contract to that company.

At first, this upset me as an American, as well as a strategic sourcing professional. But then I thought, well maybe there aren’t that many Lottery Management Firms out there. The company Corbett chose was Camelot Global Services – an organization based in United Kingdom. A quick Google search finds that there are many other lottery management firms out there, including GTech, Scientific Games, and Northstar Lottery Group (all U.S. based, and other overseas companies such as Intralot and Stride Management. Coincidentally, there’s also tons of information out there about the problems other states had when they outsourced their lottery programs.

The United States economy is based on capitalism. Competition drives capitalism – it makes it work. When you take competition away from a capitalist society, it’s called communism. You don’t have to be a strategic sourcing expert to know that competition drives down costs. Having multiple firms bid not only ensures the best price will be obtained (through negotiations, market intelligence, and competitive leverage) but that the best services and most beneficial terms are obtained. Would anyone go to the dealership and buy a car nowadays before checking around for a better price? Of course not, that would be irresponsible.

But the reality is, Corbett wasn’t trying to be responsible, and he certainly wasn’t trying to drive down costs. So what does it tell you when a government official outsources jobs overseas without the due process that makes capitalism (the foundation of our society) work? It tells me he probably hates America. Commie.

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