On December 21st, DFPS announced that the contract for “Foster Care Redesign” in Regions 2/9 had been awarded to Providence Service Corporation. As the “Single Source Continuum Contractor, or SSCC, Providence will be responsible for coordinating all placements and all services for children in CPS’ care and for the recruitment and development of all foster & adoptive homes in Regions 2/9. The foster care reimbursement rate will be the same for all foster children in the regions, and the levels of care will be eliminated. CPS will be the managing Conservator for children in care, and a CPS Worker will still be assigned to them. The contract will begin February 1st, and Providence will have up to 6 months to prepare before receiving the first referral. A tentative contract with another private provider in Region 11, Luther Social Services, was rejected after a series of problems at some of their foster homes came to light.
Providence, a publicly traded for-profit corporation based in Tucson, Arizona, is led by CEO Warren Rustand. Mr. Rustand has extensive experience in investment banking. In news articles, a previous company director defended their $300,000 a year salary as being on-par with major non-profits, and stated they only earn about 7% profit per year. Providence has contracts across the country, including Florida, where one subsidiary of Providence was giving another service provider owned by Providence preferential treatment over local organizations. This led to a $100 million contract being cancelled with the corporation and service disruptions for children in care.
Improving services and outcomes for children in care is clearly a worthwhile goal. However, privatizing services does nothing to address the chronic underfunding from the Legislature that causes these services to be unavailable for many clients & families. Instead of funding DFPS so it can serve vulnerable Texans, valuable resources will be headed to a private corporations’ bottom line.
A Third Party Evaluation will be conducted to review how the SSCCs are doing once they start getting referrals from DFPS. TSEU members will know first-hand whether the contractors are meeting client needs or not, and TSEU will continue to communicate with elected officials about what is happening on the frontline of our agency.