Haslam Administration Says Controversial Office Management Outsourcing Deal Has Saved Money

Gov. Bill Haslam’s administration is plugging the benefits of the state’s controversial contract with a private real estate management firm.

The push comes ahead of a big meeting with state lawmakers. It also comes as the administration is exploring whether to outsource more state facilities, including universities, parks, rest stops and some parts of the prison system.

The Tennessee Department of General Services is leading the campaign. The department oversees 6 million square feet of state office space. Two years ago, it launched a deal with the Chicago-based real estate firm Jones Lang LaSalle to manage its buildings — igniting a heated debate over whether Haslam has been too eager to privatize parts of state government.

But Deputy Commissioner John Hull said to reporters Thursday that the pact has created a shift in focus — from fixing state buildings up as they wore down to trying to get ahead of major maintenance problems.

“There was an issue that the buildings were not being maintained properly,” he said. “Our governor has recognized that, and we thought we needed the expertise. And that’s what JLL has brought to the state.”

As a result, Hull said, state buildings are being run more efficiently. Already, the state has cut its utility bills by $2 million over the past two years, he said.

Hull also claims JLL is spending less to run state buildings than the $36.9 million the Department of General Services anticipated it would need.

In 2014, JLL beat its benchmark by nearly $5 million. This year, that figure is expected to climb to nearly $6 million.

The Haslam administration plans to take those figures to the state legislature’s Fiscal Review Committee next week. The administration hopes it will convince lawmakers that Haslam’s campaign to privatize maintenance of state offices is paying off.

According to the Department of General Services, only 10 percent of the state’s real estate is now being managed by JLL. They believe they can get similar results with the remaining 90 percent still under government management.