The contract between the city of Atlanta and United Water stipulated that the private contractor would perform several duties. For instance, United Water, according to a report by Shirley Franklin, would have to make major improvements lest they default on their 20-year contract (Ohemeng & Grant, 2011). The contractor had failed to provide quality water, fix leaks, and maintain or read meters in regular intervals, as well as failing to provide any information to the city to monitor their work. Additionally, the Atlanta city government alleged that the contractor reduced its staff to increase their bottom line. In its defense, United Water initially responded that the original contract underestimated the maintenance workload. Even then, United Water Services and the City of Atlanta mutually dissolved their contract in 2003.
There were too many problems with this contract. First, the contract was too ambiguous and had a lot of gray areas. For instance, Cohen (2008) reports that the contract lacked specifics on deadlines for fixing leaks. Secondly, the reported information was wildly inconsistent. In comparison to the promised $20 million in annual savings, an audit later reported that the savings summed up to $10 million (Cohen, 2008). This discrepancy revealed another problem at a different level.
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While United Waters cited unprecedented maintenance costs owing to poor disclosure of the real state of the city’s infrastructure, the environmental research group, Environmental Probe, claimed that the discrepancies were because United Waters jumped too fast into signing the contract without doing their due diligence. Additionally, there were no established mechanisms to collect data and create a benchmark. The lack of data, therefore, made it impossible to enforce parts of the contract early on, such as United Water’s contractual obligations to improve Atlanta’s water infrastructure. All these problems, however, stem from the lack of accountability both in the contract and the work being outsourced to United Water Services.
References
Cohen, S. (2008). The responsible contract manager: Protecting the public interest in an outsourced world . Georgetown University Press.
Ohemeng, F. L., & Grant, J. K. (2011). Has the bubble finally burst? A comparative examination of the failure of privatization of water services delivery in Atlanta (USA) and Hamilton (Canada). Journal of Comparative Policy Analysis: Research and Practice, 13(3), 287-306.
