Competitive Highway Maintenance in Washington
1999-01
Last Fall, the Washington Institute Foundation published the first part of a major study of how highway maintenance is performed in Washington State. In that report, we described the experiences of five jurisdictions around North America who instituted private sector competition into their highway maintenance programs. We found that, when managed properly, competition allowed these governments to lower their costs and provide more and better service. Competition changed the culture of their highway maintenance programs.
If only Washington State could be so lucky. The Washington State Department of Transportation is currently barred by law from contracting with the private sector to perform routine highway maintenance. Right now the state spends approximately $250 million every two years to maintain over 7,000 miles roads and bridges. Recent studies commissioned by the state legislature have estimated the state could save at least 10 percent over current costs.
Washington State is barred from contracting with the private sector to provide public services because of a twenty-year old State Supreme Court case. Often referred to as the Spokane Community College case, this decision (and subsequent statute) made it illegal for state agencies to contract with the private sector for services which had "regularly and historically been provided…by civil service employees." Today, only a specific act of the legislature to exempt certain agencies from the law, or the law’s outright repeal, would allow the state’s Transportation Department to take advantage of the lower costs and innovations of the private sector.
In the 1998 legislative session such an exemption was proposed by Rep. Maryann Mitchell (R-Federal Way). House Bill 2892 would have allowed the Transportation Department to "purchase maintenance services by contract with individuals or business entities." However, her bill went further than just simply setting up a system of competitively contracting-out service.
HB 2892 would have directed WSDOT’s own employees to compete with the private sector by offering bids of their own. This type of policy is often referred to as managed competition – a buzzword in public policy circles. Managed competition has different meanings depending on who one is talking to.
The key to any successful managed competition between public and private sectors is ensuring that both sides are playing on as level a playing field as possible.