Chapter 22
What If... Texas used private contractors to administer state government?
1) The present private-contractor system seems to work well for the state. Even at a federal level, private contractors are hired to perform functions for the government. Therefore Texas using contractors to administer government functions is not an uncommon practice. Contractors can be found providing services in the prison systems, records and database keeping and in security and protection duties. There is an oversight committee that monitors the contractor service to ensure they are complying with the contract, the laws, as well as with the constitution of the state and the nation. For example, the Texas department of Criminal Justice (tdcj.us) has an oversight committee known as the "Private Facility Contract Monitoring/Oversight Division". The oversight committee's task is to provide oversight and monitoring of contracts for privately operated secure facilities as well as community based facilities. Texas highway construction and maintenance is also under private contract as well as the Children's Health Insurance Program (CHIP), social welfare and education services and so on. So as we can see private-contracting is a common practice and the state doesn’t have to pay for government employees to perform these functions.
2) I feel that government employee’s verses private contractors is a complicated debate that will probably never be resolved, and really depends on state and electoral perspective. They say that it will be far cheaper for the state to contract out certain functions of the government. By doing so, the state will not be burdened by the challenges of balancing funds as well as maintaining quality performance. The state can demand this from the contractors themselves and therefore ensure that state budgets are maintained and don’t go into the red. In other words, by going for private contracting the state is streamlining management and bureaucracy. The only downside here is the comfort and security provided to government employees. As a government employee there is that long-term security of incremental salary increase and benefits regulated and demanded by the constitution. Private firms at times cannot provide long term employment or tenure to employees because their budget for labor depends on the size of the contract. The attraction here is that such contracts are long term and private firms are not bound by pay grades and constitutional restriction; therefore they usually offer the minimum wage possible for the position with benefits receiving the same courtesy. What the firm can legally provide at the lowest possible rates is what they offer to their employees. Additionally there is the possibility of outsourcing functions to developing nations. For example, the firm can outsource call center functions and data management functions to India Call centers and back office centers. Since the firms hired work under an agreed sum, they are not required to provide full benefits to that firm's employees, which increase the contractor's profits. The issue here is security, as third party outsourcing has produced information and intelligence leaks. Look at the recent leaks in the NSA data collecting program. Therefore I believe that it is a case to case basis dependent on the reputation of the contractor and the overall effectiveness of the oversight committee.
3) Expansion of the Contractor System is still up for debate. As a huge number of state functions are being contracted out to third party and private suppliers, a majority of Texas state functions are now being performed by private companies. It is impossible to say whether this situation happened as a progression of the present private contractor system. At the moment, the state functions by collecting taxes from its citizens and commercial entities operating in the state. It is possible that the state does not have to overtax and included in the provision with contractors the ability to exact fees from citizens. This would lower tax brackets and allow more of a person's income to go towards their own household. This however is a tricky issue because while fees can decrease taxation, it will also limit the ability of the state to subsidize important state services like health, social support and education. I personally am against full privatization of state services because it veers on the side of commercializing the government and can easily invite corporate interest in controlling the outcome of elections, which already exist today.
4) There are a few problems with privatization. As I have mentioned above, by fully privatizing government functions for the purpose of increasing market control and expanding profit margins, the electoral process could be of great interest to commercial entities to exploit for their own vested interests. Corruption can easily occur in such a system. Politicians can easily persuade contractors to fund campaigns for a hefty private contract in important state functions and assets. Another important point as shown by the discussion above is the lack of transparency and accountability. Private contractors work to perform a function and while there is oversight it is very limited and the contractor can get away with it by outsourcing certain functions to nations that are out of the reach of American law. Since there is no statute on public disclosure of a private contractor's activities, they can easily get away with questionable actions. Also, since privatization makes government services competitive to increase profit margins, private citizens are not guaranteed inexpensive services and products as with government controlled services. An example of this is the private contracting of medical insurance. Some citizens cannot afford particular coverage’s because they are simply too expensive in private hands and are not subject to regulation or subsidies.

References
(n.a.) (2013, June, 14) Justice.gov http://www.justice.gov/oig/reports/plus/a0116/final.pdf (n.a.) (2013, June, 14) Government contracts won.com http://www.governmentcontractswon.com/department/defense/texas.htm
(n.a.) (2013,June,14) Texas Department of Criminal Justice.us http://www.tdcj.state.tx.us/private_facilities/private_facilities_home.htm