41st Anniversary Special: Private practice - Page 2

The Department of Public Health has taken privatization to a bizarre new level

The fact that they made the effort to set up their own entity kind of shows that's what they wanted to do," THC director Randy Shaw said.

The Tides contract so annoyed Board of Supervisors president Aaron Peskin that he drafted a resolution pointing out that Mayor Gavin Newsom signed an executive order in 2004 calling for maximum competition in city contracts.

"This Board of Supervisors has been on record for years in wanting to make sure contracts are competitively and fairly bid," Peskin told the Guardian. "This whole thing seems rather bizarre. The government was in essence contracting with itself."

The health department's Trotz dismisses this criticism, saying sole-source contracts were designed in the first place to allow for agreements like the Tides deal, which he calls a pilot project. Next time, he promises, the department will open the contract to bids. Trotz added that Tides is responsible if a DISH employee screws up, and it faces an annual monitoring probe by DPH staffers, just like any other contractor.

"I know now that THC and the union seem to be upset by this," Trotz said. "What we're saying is we've heard that and we are doing what we always intended to do, which is run a two-year pilot and put a [request for proposals] out on the street and ready for people to apply to prior to the start of the next fiscal year."

Of course, no one's suggesting Tides and DISH will necessarily do a poor job handling supportive housing. Shaw said lefties were the first to argue nearly three decades ago that nonprofits could address public health much more sensitively than did Dianne Feinstein's mayoral administration of the 1980s. Last year the health department did $174 million worth of business with nonprofits. While unions have been slow to organize nonprofits, the trend is growing, but Tides and DISH seem structured to stiff-arm them when covert, sole-source contracts haven't done that already.

"This obviously was a secret decision," Shaw said. "[The DPH] never consulted with anybody. They just did it. I don't want to comment on the health department beyond what I've said. But this experience has left people very cynical about dealing with the health department [and] the way they handled the whole thing."

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