Competitive bidding allows government to focus

There’s something going on at the Naval Submarine Base in Bangor, Washington, and it’s not just submarines coming and going.

Last month, Bangor received the World’s Best Naval Base award. That prestigious honor followed on the heels of other awards received in 1987, 1995, 1996, and 1997.

What sets this base apart from all the rest?

You might be surprised: Free market competitive bidding. Since 1976, the Navy has allowed competitive bidding on many of the jobs in Bangor that are not defined as core Navy functions.

As with most organizations, two of Bangor’s largest and most controllable costs are maintenance and facility operations. These are important jobs, but Naval personnel do not necessarily need to carry them out. The operations have instead been competitively bid to Johnson Controls, a company well known for its capable handling of such tasks.

This outsourcing of routine operations like industrial waste treatment, fire inspection and suppression, custodial services, vehicle upkeep, utilities and hotel operations, and design engineering has allowed Bangor Naval Base personnel to focus on their more primary duty: the maintenance of U.S. submarines for national defense.

The base’s competitive outsourcing has saved millions of dollars. In 1982, twelve hundred people were employed at Bangor to carry out services similar to what Johnson Controls now handles with eight hundred people and fewer resources. In addition to employee savings, Johnson Controls continually modifies, upgrades and improves equipment to save energy and maintenance costs.

Johnson Controls has a simple goal: to get its contract with the Navy renewed every year by providing higher quality services at lower costs. The company accepts partial liability for the systems and buildings it maintains, giving it a vested interest in assuring quality. Johnson also operates at a fixed charge with bonuses for good performance, instead of a "pay-as-you-go" model. Such measures add incentives for efficient, quality work.

Don Burns, General Manager for the Bangor Support Project at Johnson Controls, attributes Bangor’s recent award and his company’s excellent service to a number of factors; among them, a good community and skilled, motivated workers. "We serve at the pleasure of the Navy," he said. "We try to keep them happy and earn their respect." Burns adds that having workers on the job who care about how they represent themselves is an important part of a successful relationship with the Navy.

Employees and managers at Johnson Controls are required to be on the lookout for ways to improve their daily tasks, and then document such improvements. As a result, the company is constantly working to become more efficient. New employees are well-informed of the most efficient way to complete tasks, driving down the normal costs of transition by eliminating trial and error. All employees are clear on their tasks and responsibilities, and understand that they are accountable for the work they produce.

The success of Johnson Controls is due in large part to the company’s willingness to be accountable for its work. "We have a contract to meet, and if we don’t meet it, then we are through," said Burns. The self-imposed performance-based merit system has paid off. Based on criterion for quality excellence developed by the International Organization for Standardization, Johnson Controls is two years ahead of its competition.

The work Johnson Controls does for the Navy saves millions of taxpayer dollars each year. Millions more could be saved in other areas if state government would act on the fine example set by the Bangor Naval Base and consider competitive bidding and outsourcing.

Many of the support services necessary to maintain state government could be performed more efficiently using Bangor’s model. Landscape and building design, janitorial services, ground maintenance, central purchasing, and security are just a few of the tasks that could easily be performed by the private sector. This would decrease the cost of government, while stimulating Washington state’s consumer-based economy.

The Evergreen Freedom Foundation arranged for several state lawmakers to tour Bangor’s facilities in September 1995. Lawmakers were extremely pleased with what they saw. They came away from the meeting feeling that tax dollars were being spent efficiently and economically, and the base reflected the strength and potential of the free market.

Legislators have a responsibility to use taxpayer dollars as efficiently as possible while providing the highest quality of service. Whether services are contracted out to private companies or kept under public management should depend on who can offer excellent quality at the lowest price.

Competitive bidding and outsourcing are just two keys to increasing government efficiency. By implementing these important measures, government can better focus on its primary duty: providing essential services that the private sector cannot provide.

Contact: Carl Gipson, Communications Coordinator, (360) 956-3482 or cgipson@effwa.org

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org