Privatization in Practice: Case Studies of Contracting for TANF Case Management. National For-Profits

03/01/2003

The two main for-profit contractors operating in the study sites, MAXIMUS and ACS, are large organizations with ongoing projects in numerous states and localities. Both companies engage in a wide range of business activities, extending well beyond the welfare or workforce development arenas, and both bring substantial resources to the competition for contracts and service delivery.

MAXIMUS. MAXIMUS specializes as a contractor to government agencies, as evident in the companys motto, "Helping government help the people." Its projects cover the gamut of social programs, including welfare-to-work, health care, child care, child support enforcement, and child welfare. MAXIMUS also supplies logistical support to government agencies  for example, managing vehicle fleets or putting electronic payment technology into place. Projects involving TANF case management come under the companys government operations division, which carries out programs on behalf of state and local agencies. MAXIMUS has roughly 4,800 employees in more than 170 offices across the country and earned nearly $500 million in revenue last year.

Affiliated Computer Services, Inc. In contrast with MAXIMUS, much of ACSs work is with private sector firms, as an outside provider of business and information technology services ranging from processing forms to installing and maintaining computer systems. ACS is also larger than MAXIMUS, with over $3 billion in revenues in fiscal year 2002 and more than 36,000 employees. According to press reports, about one-third of ACSs revenue comes from contracts with state and local government agencies (Welsh 2002). In recent years, ACS has purchased several other companies  including Lockheed Martin Information Management Systems. As part of this acquisition, ACS gained several contracts to provide TANF case management, along with agreements covering such tasks as collecting child support, enrolling people in state-run health insurance programs, and operating one-stop centers funded through the Workforce Investment Act. ACS has also acquired Concera Corporation, a for-profit provider of business process outsourcing and workforce development services. Prior to being purchased by ACS, Concera Corporation purchased Curtis and Associates, a for-profit company that has provided TANF case management services in many states.

Because of the scope and resources of MAXIMUS and ACS, the companies employees can draw on extensive expertise in securing new contracts and delivering services. In developing proposals, for example, employees familiar with local circumstances and TANF program details take primary responsibility but have the assistance of corporate staff members who specialize in drafting project budgets and preparing effective proposals. Local project staff also benefit from program materials, such as proprietary curricula for job readiness and life skills courses, prepared for use in all project sites. The companies may also have a fairly standardized program model to implement, adapting it to local policies and conditions as needed.

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