A new court decision provides an interesting vignette into privatization of government services: Merges v. Aramark Corp., Slip Copy, 2012 WL 1113627 (W.D.N.Y. March 30, 2012), which is a denial of a motion for summary judgment. The case involves a privatization contract between Churchville–Chili Central School District (“CCSD”) in New York and Aramark Corporation for the latter to take over all custodial work, plant and grounds maintenance. Neither bothered to remove snow and ice from the walkways, resulting in slip-and-fall accidents and serious injuries among the staff. The School District sued the contractor for not keeping the walkways clear. Aramark claimed it was merely a consultant and had no duty to do any actual work, and filed a motion for summary judgment, asking the court to rule in its favor without a trial. Here is an excerpt from the court's discussion:
In sum, Aramark's argues that CCSD agreed to pay Aramark over a million dollars over five years for nothing more than “general oversight and expertise in facility management”and hence Aramark can not be held liable to third parties like plaintiff for any negligence it may have committed in the snow and ice removal processes at the School District's facilities . . . The Court does not find Aramak's argument persuasive. A review of the contract as a whole supports a finding that the intent of the contract was to privatize the management and responsibility for maintenance of the District's facilities during the contract term. In other words, a fair reading of the contract confirms the parties intention to substitute Aramark for the District as being the entity responsible for the overall management and safety of the School District's grounds and facilities. The contract was comprehensive and gave Aramark exclusive responsibility to control and manage the day to day facility maintenance requirements of the School District's buildings and grounds. Pursuant to the terms of the contract Aramark was required to provide and pay for an “Operations Team” Manager to serve as “management of the custodial and maintenance departments of the [School] District,” including the location where Merges fell. [emphasis added]
I applaud the court's decision in this case - government contractors have an income stream from taxpayer funds, and need to be accountable to do their work. The case must still go to trial, so it is still unclear which way a jury would go in this case - but it is a bit galling for a million-dollar contractor to move for summary judgment on the grounds that it couldn't be expected to actually do anything under its contract besides serve in a "consultative capacity." We can only hope that cases such as this serve as a warning to other municipalities that imagine privatization or outsourcing will bee a panacea for their budget problems. CCSD now has litigation on two fronts.
- Dru Stevenson