DerbyDad03 wrote:

It's similiar to what my School District is planning to do with for
transportation services next year. We currently contract with XYZ
Transportation for bus services. We currently cover all costs of XZY
to provide those services (gas, maintenance, storage, salaries, etc.)
plus they make a profit. Starting next year, our school district will
puchase our own busses, build our own depot and provide transportation
services "in-house". We're paying XYZ for everything anyway, *plus*
paying XYZ's profit, so by doing it ourselves, we save the cost of the
profit. In addition, we have an agreement in principal with 2 smaller
school districts in our area to provide transportation services for
them - at cost plus a smaller profit than they are currently paying
their provider. They save money, we offset some of our costs as well
as control the use of the services without having to deal with XYZ
every time a one-off transportation need arises.


Sounds good, but you're doomed.

In almost every case where a government service has been contracted to
private enterprise, the service improves or the cost goes down or both. In
almost every case where a private service has been assumed by a governmental
agency, the cost goes up or the service deteriorates or both.

Have you considered:

1. The illegal immigrant bus drivers of the private company work cheaply.
Your bus drivers will be eligible for membership in the Teamsters and, if
you don't pay them CEO wages, they can shut down your school system.

2. Remember the picture of the 500 school busses under water in New Orleans?
You didn't see any Greyhound busses in a similar predicament. It's the
tragedy of the commons writ large.

3. Some driver gets ****ed at the unruly kids and goes all stabby on the
rowdies. The parents can't recover damages from the school district - heck,
the school district probably doesn't even have liability insurance!

There will be unanticipated expenses. For example, no one in your school
system has any experience rebuilding carburetors, mapping routes,
negotiating fuel contracts, training drivers, or even washing the vehicles,
let alone maintaining the equipment, securing permits, publishing
guidelines, establishing maintenance rituals, recruiting the skills, etc.,
necessary to do all these things.

In MBA class 101, the first thing one learns is to trade a variable expense
for a fixed one - even if the fixed expense is seemingly somewhat higher.
Management strives for this because the fixed expense is a known expense.
What you're about is the reverse: trading a fixed expense, that is, a single
check taking ten minutes of an accounts payables clerk's time, for a
multitude of imponderable, unknown, and potentially ruinous costs.

I hope it turns out differently for you, but I predict disaster. If I were
the superintendent, I'd have an iron-clad contract, written on a page from
the Bible -- because of the old refrain:

I don't own this railroad,
I don't ring the bell,
But let the train jump the tracks,
And see who catches hell!