How the Privatization of Public Facilities Saves the Government Money?

With more states looking to cut big spending and put the money back into programs that will develop smaller infrastructures from within, a surprising number of opportunities have presented themselves. Many public facilities are now being privatized by companies like the FLH Company have saved the government a tremendous amount of money, and this trend seems poised to be on the rise in the future.

The Power of the Low Bid

In most cases, when the government is responsible for many public facilities, they simply designate a predetermined amount of revenue and let the workers proceed. The job being performed is at great cost to the government because there was zero opportunity for savings to take place. Bring in the bidding process with private companies, and now you have a process in place where significant amounts of money are saved and funneled back into weaker areas that need those resources more readily. When you bring in private contractors who are capable of doing the same if not better work, you also bring in the chance to get the work done for huge discounts. This process repeats itself several times a month, at great benefit to the government and the citizens who are not burdened with higher taxes.

The Lower Worker Compensation

When you bring in private companies to bid and then perform certain tasks, you virtually eliminate the excessive cost of paying for those government employees with union dues and fees for workers compensation. If a company that is privatized is doing the work, they carry their own insurance and are responsible for taking take and ensuring the safety of their employees. This reduction in dues and fees along can be a significant drop in costs that would result in the same amount of work being done. Paying government employees less to do a job that a private company can perform helps to keep spending down for the state.

Huge Union Salaries

In the example of fire companies with employees who have been part of that union for decades and command enormous salaries and pensions, the same work in fact can be done by a privatized fire response team without all that concern. The jobs are bid on by the company, so the part of the equation with years on the job experience, higher salary, and seniority, all are no longer reasons to pay these workers top dollar to do a job a more affordable company can do.