Pros, cons, and considerations for outsourcing

Institutions turn to private companies to manage grounds

More university officials are exploring possible outsourcing opportunities in order to keep costs and tuition down, Colleen Murphy reports for the Chronicle of Higher Education.

While higher education institutions have used private companies to manage parking lots, food services, bookstores, and endowments, they are increasingly looking at turning over landscaping and maintenance work as well.

Expert Insight: Where does outsourcing make sense?

Texas A&M University outsourced such services in 2012 and is on track to save $363 million over the decade-long deal. The University of Georgia system and the University of Kentucky have similar contracts with private companies as well.

And last week, Tennessee Gov. Bill Haslam (R) began accepting third-party proposals to manage the state's public buildings, which include those on both university systems' campuses. However, the university systems' officials will have the final say over whether or not they outsource services.

But it is difficult to accurately predict how much universities will actually save, says Bob Shea, senior fellow for finance and campus management at the National Association of College and University Business Officers.

But the success of some institutions has led others to try it out, he says.

When, where, and how to outsource facility operations

Campus community concerns

"When you hear 'outsourcing,' that has a negative connotation," says Phillip Ray, vice chancellor for business affairs at Texas A&M University system.

To ease concerns and provide staff, faculty, and students with a voice in the process, Texas A&M created a 30-member committee.

Giving these community members a say in the process is important for winning support, says Angela Boatman, a Vanderbilt University associate professor of public policy and higher education.

Ensuring a local fit

University officials must also take into account how a company will tailor its services to their institutions. Each campus has "unique features." For example, the way snow must be dealt with in Wisconsin is different than in Houston, says Noel Radomski, director of the Wisconsin Center for the Advancement of Postsecondary Education

"To what degree, when you go after national companies, will they be able to modify their practices of their employees to meet the unique features of their campuses?" Radomski says.

Officials should also ensure the company is able to deal with future repairs and needs. 

Additionally, to keep rates competitive, universities would benefit from changing providers after several years, says Richard Vedder, Center for College Affordability and Productivity's director (Murphy, Chronicle of Higher Education, 8/24).

Thoughts on the story? Tweet us at @eab_daily and let us know.


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