Figure 1

The title of Figure 1 is Weaknesses in the Displacement Guidelines Undermine Their Effectiveness

Figure 1 is a flow chart that summarizes various requirements in the Office of the President’s Displacement Guidelines and the weaknesses in some of those requirements.  The flow chart begins with a university location’s interest in a service contract that will displace university employees and then the need for the university location to follow the displacement guidelines. The next step is for the university location to ensure it considers university policies, collective bargaining, and state budget conditions for contracting in analyzing whether it will displace university employees. The flow chart then shows that displacement must be justified and it can be either a business and financial necessity or a service requirement. Justification as a business and financial necessity includes demonstrating a cost savings from the planned services contract . A services requirement justification includes assessing whether the services to be obtained through the contract are readily available at the university location. The fourth step is for the university location to submit the justification to the Office of the President’s human resources department, but this step applies to only contracts that exceed $100,000 per year. The final step in the flow chart is a signed services contract.

Figure 1 also shows six areas in which the displacement guidelines are weak. Depicted as a brown shaded box linked to a specific step in the displacement process, the first weakness is that the displacement guidelines do not require a justification for contracts that do not result in displacement but that could potentially be fulfilled by university employees. The second weakness is that the business and financial necessity analysis does not account for the risk of contractor cost overrun or other costs associated with contracting. The third and fourth weaknesses are linked to submitting the justification for the services contract to the Office of President’s human resources department. One weakness is that the human resources department does not have the necessary expertise for reviewing business and financial analysis. Another weakness is that the displacement guidelines do not specify that the human resources department has the authority to formally approve or reject services contract decisions. Moving towards a signed services contract the next weakness is that the displacement guidelines contain no requirement that the Office of the President formally approve a displacement analysis in order for the university location to sign a services contract. The final weakness is that the guidelines do not require reevaluation of any savings estimate that may have been made as justification for entering into the services contract.