$1M in Public Dollars Spent Exploring Outsourcing

In October, the MBTA approved a $1 million dollar contract awarded to a consulting agency to assess the viability of privatizing their other services beyond the cash counting department.[1] The six week contract will allow McKinsey & Company to explore ways to bring in “performance-driven vendor contracts for some maintenance activities” including bus operations and maintenance. If the MBTA decides to pursue McKinsey’s recommendations, their contract allows for a multi-week extension to help implement.[2]

McKinsey is notorious for urging cities to outsource functions of various public sectors, prioritizing private interests over what’s best for workers and communities. In 2007 in Seattle, it took a $750,000 contract for McKinsey to tell Seattle Public Schools that their system was bogged down by such “high costs” as health care for teachers. McKinsey also recommended converting the lowest-performing schools into charter schools that use public dollars while operating outside the purview local school boards.[3] Massachusetts voters overwhelmingly rejected a ballot initiative recently that sought to increase the number of corporate charter schools in the state. While dishing out the $1M contract to McKinsey & Company, the current administration’s moves towards further privatization of public transit are also beginning to draw scrutiny. Massachusetts voters sent a clear message that they want to see investments in public education, not corporate privatization. As the administration pursues an aggressive transit privatization agenda, it’s expected voters will break the same way towards supporting robust investments in public transportation solutions, rather than trusting in unproven privatization schemes.

The privatization hawks at McKinsey are inevitably going to return a study advocating for further privatization schemes. Expect the study to ignore or downplay the high costs and dangers presented to taxpayers, riders, and workers by transit privatization schemes that have already failed both in Massachusetts and across the world.


[1] “MBTA paying firm $1M to assess outsourcing options,” Boston Herald, Oct 2016. http://www.bostonherald.com/news/local_coverage/2016/10/mbta_paying_firm_1m_to_assess_outsourcing_options
[2] “MBTA hires McKinsey to study more privatization,” Boston Globe, Oct 2016. https://www.bostonglobe.com/metro/2016/10/18/mbta-eyes-privatization-driving-maintenance/owrVAIolVkQDOgYh634nPO/story.html
[3] “Private firm gets failing grade,” Seattle Times, Dec 2007.  http://www.seattletimes.com/opinion/private-firm-gets-failing-grade/

Image: Adam E. Moreira

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