What Just Happened: Changes to WorkBC contracts

What just happened: Changes to WorkBC contracts

A report to Board Voice members prepared March 13, 2019, by Board Voice Executive Director Jody Paterson

The current contracts governing WorkBC employment services in the province wrap up at the end of March. When new services begin April 1, they will bring dramatic changes – to the organizations that will be delivering services; to the regions where they work; to the people who do that work; and to the future for many valued and experienced community organizations that lost their bids, in some cases after decades of providing job-training services.

The BC government continues the trend of creating larger regions managed by fewer and fewer organizations. In 2012, when the last round of bids were announced, contracts were reduced from 300 to 73 and awarded to 47 primary contractors. In this latest round of contracts, contracts were reduced to just 45, awarded to 27 organizations.

More than one in five of the new contracts – and 22 per cent of the funding – went to two international for-profit corporations that specialize in contracting with governments to provide health and social care services. WCG International Consultants is owned by the Ingeus corporation, which operates in 11 countries. Maximus Canada’s parent company delivers health and social services in five countries.

The contract value of WCG’s five contracts alone represents 16 per cent of total provincial awards, with Maximus’s contracts bringing that total to more than 22 per cent. The new WorkBC contracts will be in place for five years, with contract provisions allowing extensions up to 2028.

Significant structural changes

Non-profit primary contractors represent 57 per cent of the total WorkBC funds and contracts under the new agreement. For-profits will receive 39 per cent, with the remaining four per cent going to public institutions providing employment services. The 27 primary contractors have sub-contracts with 130 other organizations, of which 71 per cent are non-profit.

(While government notes that more money is going to non-profits in the new contracts, it’s important to point out that up until “workfare” and performance-based employment contracts became the standard for job-training services in BC in the late 1990s, all employment services were provided by non-profit organizations – first by government itself, and later by community-based non-profits.)

Twenty-four of the 27 primary contractors in the new agreement were primary contractors with WorkBC in the last agreement. But a number will be operating in new communities where they haven’t provided WorkBC services before. As well, some contractors have significantly increased the number of contracts they hold.

For instance, Maximus held just one contract in the previous agreement, in Kelowna. It’s now no longer the primary contractor in Kelowna and instead will manage services in communities including Mission, Abbotsford, Oliver, Summerland, Penticton, Princeton, where the company has no prior experience.

WCG International was the contractor in Revelstoke, Smithers and Salmon Arm in the last agreement, but has now left Smithers and instead will be delivering services in Agassiz, Chilliwack, Hope, Kelowna, Golden, Sicamous, Valemount, Prince George and Mackenzie in addition to Revelstoke and Salmon Arm.

These major changes apply to some non-profit providers as well. MOSAIC, for instance, previously held one contract, in Vancouver Northeast. It now holds four, in communities including Vancouver North, Delta, Ladner, Surrey Cloverdale, and South Surrey.

Government says this dramatic restructuring of job-training services was necessary to respond to concerns raised in a 2016 review of the existing agreement.

“Through the life of the program, we have seen a shift in the types of clients that require services,” wrote Social Development Minister Shane Simpson in an email response to Board Voice’s queries.

“Over time, clients have been trending towards more barriered individuals who require enhanced and flexible services to support them. The ministry is constantly seeking to evolve and improve the program and has undertaken modifications throughout the life of the current contract. However, given the changing labour market and client demographic shifts the program needed to be refreshed to modernize. Some fundamental changes were too significant to undertake within the existing contract.”

Payments are part fixed fee, part performance fees

The WorkBC contracts have a total value of $249 million a year over five years. Contractors receive money through two channels: A fixed fee, which each contractor set individually as part of their bid; and predetermined performance fees paid out over time and based on clients achieving outcomes and staying on the job.

While full financial details of the successful bids aren’t available to the public, anecdotal reports are that many successful proponents put forward fixed-fee amounts anywhere from 15 to 30 per cent below what was budgeted for a particular region. It remains to be seen whether the contracts are actually workable for the budgets that organizations put forward. Government says those organizations will still receive the full amount budgeted for an area if they achieve performance outcomes.

Payments are up to six times higher when organizations can demonstrate they have placed and maintained multi-barriered individuals in jobs. Performance fees for a job-ready client, for instance, will be around $2,000, compared to $12,000 for a multi-barriered client.

Here are the 27 primary contractors for WorkBC and the regions/communities where they now preside. The total value of their contracts are noted, as they are available on BC Bid. (*Note: Each community noted here will have one job centre under the new contract, unless otherwise stated.)

North Island Employment Foundation – non-profit, $19.19 million

One region: Vancouver Island North

Port Hardy
Campbell River

Creative Employment Access Society – non-profit, $27 million

One region: Comox Valley-Powell River

Courtenay
Powell River

Central Vancouver Island Job Opportunities Building Society, non-profit, $27.94 million

One region: Parksville-Alberni

Ucluelet
Port Alberni
Parksville
Tofino

GT Hiring Solutions (2005) Inc, for-profit – Total contract value of $91.04 million in individual contracts of $53.74 million and $37.3 million

Two regions: Nanaimo and Greater Victoria

Nanaimo
Victoria
Saanich

ETHOS Career Management Group Ltd , for-profit – $23.1 million

One region: Cowichan Valley

Ladysmith
Duncan

WorkLink Employment Society, non-profit – $19.19 million

One region: Langford-Sooke

Langford
Sooke

Beacon Community Services, non-profit – $15.46 million

One region: Saanich-Gulf Islands

Salt Spring Island
Sidney

Open Door Social Services Society, non-profit – Total contract value of $101.13 million in individual contracts of $13.43 million, $39 million, $48.7 million

Three regions: Sea to Sky, Vancouver City Centre, Kamloops-Thompson

Sechelt
Squamish
Vancouver Downtown Eastside
Vancouver City Centre
Vancouver
Barriere
Chase
Clearwater
Kamloops (two job centres)

YWCA, non-profit – Total contract value $111.35 million in individual contracts of $30.72 million, $29.7 million, $50.93 million

Three regions: North Vancouver, Vancouver South, Tri Cities

North Vancouver
Vancouver South
Coquitlam
Port Coquitlam
Port Moody

Pacific Community Resources Centre, non-profit – $53.24 million

One region: Vancouver Midtown

Vancouver Midtown
Vancouver West

MOSAIC (Multi-Lingual Orientation Service for Immigrant Communities), non-profit – Total contract value $82.54 million in individual contracts of $23.15 million, $25.23 million, $18.5 million, $15.66 million

Four regions: Vancouver Northeast, Delta, Surrey-Cloverdale, South Surrey-White Rock

Vancouver North
Delta
Ladner
Surrey Cloverdale
South Surrey

SUCCESS (United Chinese Community Enrichment Services Society), non-profit – $33.57 million

One region: Richmond

Richmond (will have two job centres)

Douglas College – public institution, $28.36 million

Two regions: Maple Ridge, Langley

Maple Ridge
Langley
Aldergrove

Options Community Services Society, non-profit – Total contract value of $91.5 million in individual contracts of $34.24 million, $57.26 million

Two regions: Surrey Newton and North Surrey

Surrey Fleetwood
Surrey Whalley
Surrey Newton

WCG International Consultants Ltd, for-profit – Total contract value $204.09 million; individual values of contracts are $33.87 million, $32.3 million, $17.9 million, $66.25 million, $53.77 million

Five regions: Burnaby, Fraser Northeast, Shuswap-Columbia, Central Okanagan, Prince George

Burnaby (three job centres)
Agassiz
Chilliwack
Hope
Kelowna West
Kelowna (two job centres)
Golden
Sicamous
Salmon Arm
Revelstoke
Valemount
Prince George
Mackenzie

Fraser Works Cooperative, non-profit – $18.11 million

One region: New Westminster

New Westminster

MAXIMUS Canada Employment Services, for-profit – Total contract value $72.4 million in individual contracts of $27.6 million, $32.9 million, $11.9 million

Three regions: Mission, Abbotsford, Southern Okanagan