State and Local Issues

Bidding or Status Quo For City Services

A comparison of private bidding practices in two cities -- and the lack of bidding in another -- illustrates how taxpayers lose when city councils refuse to let the private sector perform civic functions more efficiently and for profit.

An analysis from the Buckeye Institute provides some details.

  • Indianapolis -- the acknowledged leader in competitive bidding -- now saves taxpayers some $30 million per year, or a projected $200 million saving over 13 years, by bidding out city services formerly provided by city employees.

  • Cleveland allowed private vendors to compete for some city contracts in 1994 -- saving more than $2 million per year -- with another $1 million saving forecast once the city opens up management of city-owned golf courses and parking lots to competitive bidding as well.

  • Conversely, Cincinnati's city council -- rejecting recommendations of some council members and the city staff -- turned down a private bid on parking lot management that would have saved taxpayers 45 percent of costs, as well as a bid by city employees that would have resulted in 34 percent savings.

Competitively bid services are still a small part of overall municipal services, even in Indianapolis and Cleveland, however. Savings amount to about 7 percent of Indianapolis' city budget and less than 1 percent in Cleveland.

Source: Jeff Williams, " The Do's and Don'ts of Competitive Contracting: Cleveland, Cincinnati and Indianapolis, " Perspective, October 1997, Buckeye Institute for Public Policy Solutions, 131 N. Ludlow Street, Suite 317, Dayton, Ohio 45402, (937) 224-8352.

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