Economic Analysis of Government Contracts

Project Scope 

In fiscal year 2009, New Jersey spent $525 million feeding school children as part of its $24 billion statewide expenditures for public elementary and secondary education.  Of its 590 operating school districts, 70 percent managed their school food programs through individual contracts with private, for-profit companies.

To explore possible financial savings in NJ’s local school districts, 32BJ/SEIU, one of the region’s largest labor organizers, representing thousands of school workers in NJ, asked The Public Good to determine if aggregating school food management contracts could lead to cost savings.  Through a sophisticated analysis of public financial records and the NJ government contracting process, we determined that a small but not insignificant amount of money could be saved in select school districts through contract consolidation, also giving school districts greater leverage in negotiating pricing and terms.

Outcome

Ou research was part of an effort by 32BJ SEIU to promote a bill sponsored by several state legislators. Our report was presented as testimony; findings helped the bill pass the NJ State legislative budget office in 2013. As of January 2026, a bill to create regional school districts to promote budget efficiencies, purchasing power and consistency across multiple smaller districts is still being discussed in the state legislature.