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Report Finds San Diego's 'Managed Competition' Needs To Be Reformed

The city of San Diego's voter-approved competitive bidding process known as "managed competition'' is cumbersome and needs to be reformed, according to a consultant's report scheduled to be presented Wednesday morning to the City Council's Budget Committee.

The study is the last of five by a group led by former Indianapolis Mayor Stephen Goldsmith that looked into improving efficiencies in various municipal functions.

The managed competition process can be beneficial to the city and employees but became unwieldy and contentious, limiting any potential good, the report says.


The city began taking bids on various functions in 2010 and saved $9 million annually in publishing, street sweeping and other areas. However, it drew opposition from organized labor and was suspended by ex-Mayor Bob Filner.

Current Mayor Kevin Faulconer, perhaps the top supporter of managed competition when he was a City Council member, wants to revive the process.

Among Goldsmith's findings:

  • a reliance on managed competition has limited the implementation of other reform tools;
  • a "robust flow of efficiency and effectiveness innovations'' from the private sector has been stymied with municipal employees winning all the bids so far;
  • project scopes were flawed;
  • the integrity of the process was compromised by a lack of reliable data;
  • employees had no financial incentives; and
  • debate over the program has focused on who loses, not on creating win- win opportunities.

Among his two dozen recommendations are to form a more effective partnership between the city and organized labor, streamline the process so it includes fewer steps to complete, create a financial "upside'' for affected employees, and make managed competition a part of an overall efficiency/quality/innovation initiative.

Last week, Faulconer proposed establishing rewards for employees who come forward with ideas for saving money and improving services. He supports Goldsmith's recommendations.