CPS Reform Proposal
Purpose:
Improvement in accountability and cost effectiveness of CPS for the benefit of the public is the primary goal of this proposal. It seeks to allow this by privatizing the management of the CPS functions and allowing direct voter input for selecting the amount of services that will be provided by each contracting organization. By requiring voters to vote for percentages of business to go to each contractor, better contractor performance will result in more state business going to the superior contractors. By requiring each voter to vote for at least two contractors, we still ensure that other contractors will be in place to provide cost and quality competition.
Time Frames:
CPS will contract all routine case management work to 3-5 qualified independent organizations on a bi-annual basis corresponding to the election cycle for state legislators. Investigation work will also be contracted out to 3-5 qualified independent organizations on a bi-annual basis. Investigation and routine case management will be handled separately.
Contract administration:
Separate sets of contracts will be awarded for Investigation and Routine Case Management. There will be separate processes for awarding those contracts. Investigation and Case Management are fundamentally different businesses, so their contracting will be done separately. Also, separating Investigations from Case Management will reduce incentives to cause investigations to result in a need for routine follow-up management.
Organizations will have to be certified by DES as qualified. This will include posting a bond to sufficiently cover costs due to breach of contract and liability incurred during performance of the contract. No organization will be qualified if any of the owners, directors, or officers were an owner, director, or officer in an organization dismissed from CPS contracting in the past 4 years. In addition, there will be other qualifications such as passing criminal background checks, no previous felony convictions, etc. appropriate to ensure that contracting organizations will be run by people of good character. Further, an organization must be able to handle up to 30% of the estimated case load through the use of employees and subcontractors.
All contracting activities including bids and voting will be done separately for each county. This has some advantages over state-wide contracting. This will improve accountability because citizens in the county being served will have a better idea of how the companies are performing in their county than in the rest of the state. Competition will be improved because smaller firms can compete in individual counties without having to be able to work in the entire state. If more firms are eligible to bid, then the overall level of competition will increase. Also the different costs structures of operating in different counties will become apparent and provide opportunities to identify additional ways to reduce costs. Since the provision of CPS services probably has no economies of scale beyond the county level of operation (and probably has diseconomies), more decentralized execution of policy could produce additional savings through more efficient administration.
All qualified contractors, including faith based organizations, can submit a bid for handling each randomly assigned case. The contractors submitting the 5 lowest bids will be selected for contracting. The bid may include a limit to a percentage of caseload greater than or equal to the minimum caseload in 10% increments. The 2 lowest bidders will have their pay rates set to the rate of the third lowest bidder. This is done to encourage low cost operators to bid as low as possible while allowing them some profit. Higher bidders will be paid the rates they bid in order to ensure they do not lose money by providing services at a lower price than they offered. The contractors will have to be specified before the primary election for legislators and will be placed on a ballot at the same general election state legislators are voted on.
Elections with proportional voting will help keep contractors accountable to the public. Each contractor will have a ballot item for each 10% of caseload the contractor is willing to take up to 80%. Each voter will be required to cast exactly 10 votes in this election to determine the percentage of funding that will go to each contractor. Any under or over votes will not be counted. Overall funding to each contractor will be based on their percentage of total counted votes received. If either of the two lowest vote-getting contractors gets less than 5% of the votes, that contractor will be excluded and their votes will be discarded; the percentages will then be recalculated based on remaining votes. Because the percentage will apply to funding rather than caseload, lower cost providers will actually get slightly more cases than their vote percentage because their fee per case is lower.
Investigator and Case Management contractors will be selected on separate ballots.
Cases in the following 2 calendar years will be allocated randomly to ensure that each contractor gets funding proportional to their vote percentage.
The role of CPS will be to administer the case allocation and monitor performance of the contractors. CPS will also do a routine follow-up of all cases investigated when no case management is deemed necessary to ensure there is no change in status over a 6 month period. Any status change requiring an investigation will be referred to an investigation contractor different from the contractor doing the prior investigation.
One way that costs will be reduced is that companies will have an incentive to save money to increase profits rather than waste the money at the end of the fiscal year with a use it or lose it mentality. High profits will send a powerful message to other companies that they should try entering the market in the next contract cycle. This will drive down prices while maintaining quality acceptable to voters. In effect, the profits from successful operations will translate into savings in future contract cycles because bids will be lower.
Purpose:
Improvement in accountability and cost effectiveness of CPS for the benefit of the public is the primary goal of this proposal. It seeks to allow this by privatizing the management of the CPS functions and allowing direct voter input for selecting the amount of services that will be provided by each contracting organization. By requiring voters to vote for percentages of business to go to each contractor, better contractor performance will result in more state business going to the superior contractors. By requiring each voter to vote for at least two contractors, we still ensure that other contractors will be in place to provide cost and quality competition.
Time Frames:
CPS will contract all routine case management work to 3-5 qualified independent organizations on a bi-annual basis corresponding to the election cycle for state legislators. Investigation work will also be contracted out to 3-5 qualified independent organizations on a bi-annual basis. Investigation and routine case management will be handled separately.
Contract administration:
Separate sets of contracts will be awarded for Investigation and Routine Case Management. There will be separate processes for awarding those contracts. Investigation and Case Management are fundamentally different businesses, so their contracting will be done separately. Also, separating Investigations from Case Management will reduce incentives to cause investigations to result in a need for routine follow-up management.
Organizations will have to be certified by DES as qualified. This will include posting a bond to sufficiently cover costs due to breach of contract and liability incurred during performance of the contract. No organization will be qualified if any of the owners, directors, or officers were an owner, director, or officer in an organization dismissed from CPS contracting in the past 4 years. In addition, there will be other qualifications such as passing criminal background checks, no previous felony convictions, etc. appropriate to ensure that contracting organizations will be run by people of good character. Further, an organization must be able to handle up to 30% of the estimated case load through the use of employees and subcontractors.
All contracting activities including bids and voting will be done separately for each county. This has some advantages over state-wide contracting. This will improve accountability because citizens in the county being served will have a better idea of how the companies are performing in their county than in the rest of the state. Competition will be improved because smaller firms can compete in individual counties without having to be able to work in the entire state. If more firms are eligible to bid, then the overall level of competition will increase. Also the different costs structures of operating in different counties will become apparent and provide opportunities to identify additional ways to reduce costs. Since the provision of CPS services probably has no economies of scale beyond the county level of operation (and probably has diseconomies), more decentralized execution of policy could produce additional savings through more efficient administration.
All qualified contractors, including faith based organizations, can submit a bid for handling each randomly assigned case. The contractors submitting the 5 lowest bids will be selected for contracting. The bid may include a limit to a percentage of caseload greater than or equal to the minimum caseload in 10% increments. The 2 lowest bidders will have their pay rates set to the rate of the third lowest bidder. This is done to encourage low cost operators to bid as low as possible while allowing them some profit. Higher bidders will be paid the rates they bid in order to ensure they do not lose money by providing services at a lower price than they offered. The contractors will have to be specified before the primary election for legislators and will be placed on a ballot at the same general election state legislators are voted on.
Elections with proportional voting will help keep contractors accountable to the public. Each contractor will have a ballot item for each 10% of caseload the contractor is willing to take up to 80%. Each voter will be required to cast exactly 10 votes in this election to determine the percentage of funding that will go to each contractor. Any under or over votes will not be counted. Overall funding to each contractor will be based on their percentage of total counted votes received. If either of the two lowest vote-getting contractors gets less than 5% of the votes, that contractor will be excluded and their votes will be discarded; the percentages will then be recalculated based on remaining votes. Because the percentage will apply to funding rather than caseload, lower cost providers will actually get slightly more cases than their vote percentage because their fee per case is lower.
Investigator and Case Management contractors will be selected on separate ballots.
Cases in the following 2 calendar years will be allocated randomly to ensure that each contractor gets funding proportional to their vote percentage.
The role of CPS will be to administer the case allocation and monitor performance of the contractors. CPS will also do a routine follow-up of all cases investigated when no case management is deemed necessary to ensure there is no change in status over a 6 month period. Any status change requiring an investigation will be referred to an investigation contractor different from the contractor doing the prior investigation.
One way that costs will be reduced is that companies will have an incentive to save money to increase profits rather than waste the money at the end of the fiscal year with a use it or lose it mentality. High profits will send a powerful message to other companies that they should try entering the market in the next contract cycle. This will drive down prices while maintaining quality acceptable to voters. In effect, the profits from successful operations will translate into savings in future contract cycles because bids will be lower.
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