Washington Department of Printing to be ‘Studied’
What’s going on in the State of Washington? The State Auditor’s Office (SAO) has selected a “Subject Matter Expert” to conduct a “Printing Services Performance Audit” of Washington’s Department of Printing. The successful consultant is BERK and Associates (www.berkandassociates.com), “an interdisciplinary consultancy integrating strategy and policy, financial and economic analysis, facilitation, design and communications.” They don’t sound like subject matter experts in printing to me.
The Washington Department of Printing (DOP) is a big business. Its roots date back to 1854, when the legislature established the position of Public Printer. (See IPG article "Not the State Printer You Used to Know".) DOP is a self-supporting operation and receives no general fund appropriations.
According to the State Government Performance Review issued by SAO, Printing showed a profit of nearly $900,000 in FY 2008, but that fell to a loss of $1.35 million in FY 2009. Sales over the last three years range from $31 million to $36 million. To put that in perspective, Printing would rank between #150 and #165 on the Printing Impressions Top 400 printing company list. A million dollar plus loss is serious, even for a shop of this size, but we have every reason to believe that Public Printer Jean-Luc Devis and his team are making the necessary adjustments.
DOP is structured to provide a wide range of print document management solutions to most Washington state agencies. It is required by law to charge no more than the price of the same job as listed in the Porte Publishing Company's Franklin Printing Catalogue. The performance review acknowledges that Porte no longer publishes the Franklin Guide. The assumption seems to be that the current version of Franklin is used to develop national averages pricing, and that information is somehow relevant.
It fails, however, to identify which version of Franklin pricing guide is to be used: The Offset Pricing Guide or the Quick Print Pricing Guide. Nor does it consider that neither version of Franklin is intended for use by a shop of this size. Nevertheless, one version of a bill to move Printing under the Department of Information Systems maintains the provision that Printing cannot charge a price “...that exceeds the price listed in the Franklin Printing Catalogue.”
Printing performance audits can be a good thing, if done properly. The problem here is the process. The State Auditor’s Office Work Request was issued July 12, 2010. Only firms that were “prequalified” were allowed to bid on the work. Let me repeat what I said above: the title of the work request is "Subject Matter Expertise for Printing Services Performance Audit." Only one of the 60 or so prequalified firms even mentioned printing, print shops, document management, or any of the terms we would associate with "Subject Matter Expertise" in the documents provided by the Sate Auditor.
To SAO’s credit, the firm that mentioned printing was the successful firm, but one must question the openness of a process that prequalifies vendors without looking into their, well, qualifications. And one of the shops listed by the winning firm as a successful project consisted of six or so employees—hardly a benchmark for a $30 million plus plant with 130 or so employees.
The work request also imposes an incredibly rigid time line. Vendors were given 11 days to submit proposals. My information is that the successful vendor was notified on August 16 and has until August 24 to complete the first deliverable—developing a set of standard definitions. By October 8 the consultant is expected to analyze the current business model and calculate the total costs of operations for Printing, AND calculate total costs, volume and performance of a couple of dozen sate agencies as well.
What’s the big rush?
At the end of the day this seems to be a process driven by politics, rather than an attempt to create governmental efficiencies. A bill to move Printing under the umbrella of the Department of Information Services passed the House of Representatives earlier this year but hit a snag in the Senate. In a move that shows no semblance of understanding the nature of the document production process, one State Senator is leading an initiative to eliminate DOP altogether. According to the February 20 edition of The Olympian, the senator said he "wants to abolish the 100-worker shop because agencies can use desktop printers for small materials and private companies if they need brochures or reports printed.” He added that state government is “stuck in a steno pool age.” Whether his opinion is widely shared remains to be seen.
This perception is unfortunate because, on the surface at least, Printing is doing a good job. In addition to offset and digital production, Printing offers a copier program to leverage pricing and manages a managed print services project to help state agencies right-size office multi-function devices. And its sales-per-employee ratio, $238,000, is 60% higher than the average for the commercial print industry.
BERK’s proposal mentions including Howie Fenton and Tim Fischer of NAPL for their professional expertise, and that may be a good thing. But it also raises the question: Why were organizations like NAPL—which are clearly qualified to be subject matter experts—excluded from the queue of consultants that were allowed to be prequalified?
It’s too early in the process to predict outcomes, but make no mistake, the “O” word is a part of the consultant’s charge.
Ray Chambers, CGCM, MBA, has invested over 30 years managing and directing printing plants, copy centers, mail centers and award-winning document management facilities in higher education and government.
Most recently, Chambers served as vice president and chief information officer at Juniata College. Chambers is currently a doctoral candidate studying Higher Education Administration at the Pennsylvania State University (PSU). His research interests include outsourcing in higher education and its impact on support services in higher education and managing support services. He also consults (Chambers Management Group) with leaders in both the public and private sectors to help them understand and improve in-plant printing and document services operations.