Markets Opinion

School Improvement RFP of the Week (2): Retiree Leaseback - A Back Door to Outsourcing the Teaching Force

July 08, 2008 3 min read
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From Monday’s issue of K-12Leads and Youth Service Markets Report.Announcement: Contract Employment Program for Retirees—Employee Leaseback Due July 29. Mesa Public Schools, Arizona

Their Description:

The purpose of this Request for Proposal (RFP) is to develop a long-term contract with a qualified firm to provide employee lease-back services.... This RFP is being issued as part of the SAVE Purchasing Consortium. Any member of this consortium may participate in the resultant program....

The goal of this program is to retain experienced and qualified employees that would otherwise retire and be lost to the organization. Those employees interested and qualified to participate in this program would take full retirement and then be formally hired by the successful firm and placed back in their same position (or other position as qualified) as a contract employee.

The contracting entities (school districts) are open to applying this program to all employee categories. The benefits of this program should be two-fold. The contracting entity should realize a reduction in labor costs based on the elimination of FICA and benefit costs associated with a fully loaded internal employee along with the ability to retain experienced and qualified personnel.... The actual percentage of exit salary paid to each contract employee shall be at the sole discretion of the contracting entity....

The parties agree that no person supplied by the Contractor in the performance of the Contractor’s obligations under the contract are considered to be contracting entity employees, and that no rights of State civil service, retirement accrue to such persons.
The Contractor shall have total responsibility for all salaries, wages, bonuses, retirement... other employee benefits and all taxes and premiums... and shall save and hold the State harmless with respect thereto....

The contracting entity shall have control over the daily activities of the Contractor’s employees and in the event any such employee shall fail to adhere to the contracting entity’s directions, security regulations or demonstrate that they are not qualified to perform the duties required or if they refuse to do so, the contracting entity shall notify the Contractor who will conference with the contracting entity as to what actions will be taken. The Contractor shall follow through with the discipline of the employee after the decision has been made....

Changes in key personnel as detailed in Contractor’s proposal attached hereto, cannot be made without prior written approval of the contracting entity. For any such changes requested by Contractor, substitute personnel must posses education and experience qualifications equal to or higher than personnel being replaced....

Work policies, standards and procedures established by the contracting entity shall be followed at all times. The Contractor and his employees shall conform in all respects with regard to physical, fire and security regulations while on the premises of the contracting entity.

All personnel assigned must be employees of the Contractor at the time of any specific work assignment to the contracting entity. Before assigning one of its employees, the Contractor shall assure that the individual has, at a minimum, the qualifications for the required work and is able to perform the duties required by the contracting entity....

Pricing must be submitted on an all inclusive basis. The Contracting entity will pay one rate for the predetermined salary of an employee; this rate must be inclusive of all charges by the Contractor. Rates shall be outline for each year of the five-year contract....

My Thoughts: Today, this is a way for districts to have their cake and eat it too. Teachers reaching retirement can take retirement, but still remain under district control. (Profit now lies in the difference districts would otherwise pay as employee benefit costs.) Next, expect retirees from adjacent school districts. Someday - why just retirees?

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