LANSING (AP) – State officials reversed themselves Tuesday in deciding to hire a private company to prepare food for Michigan’s 44,000 prisoners, saying they originally misjudged a plan that would actually save the state about $16 million.
The Michigan Department of Corrections sent a notification to state employees of the decision, which puts the jobs of 373 workers at risk.
The agency initially said the plan would not save enough money. But on Tuesday, agency officials said mistakes were made in evaluating bidders’ proposals, including comparisons between the private sector and state costs that were not “apples to apples.”
As a result, the state could save 20 percent, or about $16 million, by hiring Philadelphia-based Aramark Corp. The state currently spends about $73 million a year for prison food services.
Gov. Rick Snyder’s administration decided against privatizing some prison services on March 1, because three contracts out for bid did not achieve the minimum 5 percent savings as required by state rules, or a 10 percent threshold set by corrections officials. But after Republican lawmakers complained, officials did a review and found mistakes involving the review of the food contract.
Sen. John Proos, R-St. Joseph, said his understanding is that 85 percent to 90 percent of the state’s prison food service employees will be offered jobs by Aramark. A corrections spokesman could not immediately verify that figure. Messages seeking comment were left with Aramark.
“That’ll save $16 million right off the bottom line of general fund support. And general fund are the discretionary dollars that we have as appropriators to plow into other areas of the state’s needs and wants, whether it be roads or schools or otherwise,” said Proos, who chairs the Senate subcommittee responsible for the corrections budget.
One factor in the reversal was that the state took into consideration the actual number of meals served instead of assuming all prisoners eat three meals a day.
According to the Corrections Department, Aramark already employs 3,000 people in Michigan and serves meals for large companies such as Ford, General Motors and county jails. About 14,700 workers, which is more than a quarter of all state employees, work in the prison agency.
The announcement came the same day the GOP-led Senate approved a budget for the prison agency on a mostly party-line vote. Differences with Snyder and the Republican-controlled House are expected to be resolved in the next month.
Democrats criticized Republicans for their push for privatization and said the state “magically reworked the money” to show it can save money bidding out food services.
“Privatization has again become a fool’s errand and vocal point in Michigan’s prisons and correctional facilities, or at least for the legislators who set their funding. We need to trust the Department of Corrections to identify cost savings and implement reforms without weakening the care and monitoring of Michigan’s incarcerated,” said Sen. Bert Johnson, D-Highland Park.
Corrections spokesman Russ Marlan said Aramark has similar state prison contracts with Indiana, Kansas and Kentucky, and in many cases hired displaced state workers. He said officials reviewed two other potential contracts that originally were deemed to not save enough money – for prisoners’ medical care and mental health care – and decided to stick with having those functions handled by state employees.
Privatizing all medical care could have been the largest privatization of state government services in Michigan history.
The state will move quickly to sign a food contract with Aramark, but an exact date of implementation was not set, Marlan said.
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