CARCIERI

PROVIDENCE — The Carcieri administration has selected the Massachusetts firm Hurley of America Inc. to replace scores of housekeeping employees at Eleanor Slater Hospital with private contractors.

The move, announced yesterday, will save taxpayers an estimated $13 million over the life of the five-year contract, according to the governor’s office. And it will jeopardize an estimated 80 state jobs — primarily union janitors and housekeepers at the hospital’s Zambarano Unit in Burrillville and Cranston’s Pastore Complex.

Hurley has agreed to consider hiring existing employees, although the effect on their wages and benefits is unclear.

Yesterday’s announcement represents a direct challenge to the General Assembly, which passed a law two months ago as part of the state budget aimed at slowing Carcieri’s aggressive push to expand privatization. The law outlines a series of detailed reporting requirements and cost-benefit analyses before the governor can replace state employees.

The Department of Administration’s legal team believes the new statute doesn’t apply to the housekeeping negotiations at Eleanor Slater, which began before the Assembly passed the provision in June, according to the governor’s spokesman, Jeff Neal.

Legislative leaders do not agree.

“The administration’s action is a violation of the law we enacted,” said House Majority Leader Gordon D. Fox. “The legislation is very clear that it applies to all pending awards and pending privatization contracts. I would like to see the Department of Administration’s legal opinion and analysis to the contrary.”

In fact, the last line of the law reads: “All of the aforementioned sections shall apply to all pending awards and pending privatization contracts.”

But those on all sides of the issue — union officials, legislators, the governor’s staff, and even a hospital patient — acknowledged yesterday that a judge may ultimately decide the future of privatization in Rhode Island, a tool the governor says he needs to help close next year’s projected $306-million deficit.

In the meantime, despite the new law, Carcieri is showing no signs of backing down from a June pledge to privatize “every state service that could possibly be performed more efficiently by the private sector.”

Neal wouldn’t comment on other future privatization plans, such as the push to replace dietary services employees at Eleanor Slate.

The author of the new law wasn’t pleased when notified yesterday of the governor’s move.

“This just sounds like the governor is on this ego thing, trying to challenge a law that’s been enacted,” said Rep. Charlene Lima, D-Cranston. “He must be held accountable. I hope this isn’t going to cause a court challenge that will cost more taxpayer money.”

The new law requires the director of administration to conduct an in-depth cost-benefit analysis 60 days before requesting bids from private companies. Based on the analysis, current employees and their union representatives would first be given a chance to “present new cost estimates for their own work.”

The law also prohibits the director of administration from awarding a contract to a private firm unless “the savings to the state is substantial,” although it does not define “substantial” savings. And it gives “affected parties” — program recipients, state employees or unions — 60 days to appeal any privatization decision to a Superior Court judge.

Union leaders were caught off guard by yesterday’s announcement.

“This is a premeditated shot at the unions prior to Labor Day. I don’t know what [the governor] is thinking,” said Dennis Grilli, executive director of Council 94, the largest state employees union. “The governor is breaking this law and that will be addressed. At some point in time, we’ll probably end up in court.”

A spokesman for the Carcieri administration acknowledged the same likely outcome.

“That legislation was passed at midnight without public comments and without any input from the state agencies,” said Dan Majcher, supervisor of fiscal services for the Department of Administration. “Therefore, I think that this is something that there is going to be a legal challenge on.”

Hurley of America Inc. is a subsidiary of The Hurley Group, an international corporation with offices in Stoneham, Mass., Toronto and London. The Stoneham office has more than 600 employees, according to its bid documents, and provides services at Providence College, among other area institutions.

Hurley was the only company to bid on housekeeping services at Eleanor Slater Hospital.

The state has awarded the company a tentative three-year contract, which includes a state option for two one-year extensions. The contract is worth between $2.5 million and $3 million per year — or about $15 million over the five-year agreement, which may be finalized in the next month or two, according to Majcher. The current housekeeping contract costs Rhode Island taxpayers around $5 million annually.

While the administration estimates saving approximately $13 million over the life of the contract, legislators and union officials are skeptical.

The numbers don’t include federal dollars that help finance the positions, according to Rep. Edwin R. Pacheco, D-Burrillville. Nor do they take into account the burden of eliminating dozens of jobs.

“You’re talking about putting people out of work — paying for their health care, their unemployment,” Pacheco said. “And people tenured are simply going to transition into new positions. Where are the cost savings?”

The patients at the Zambarano unit had heard rumors that the privatization plan may be coming. But they didn’t expect yesterday’s announcement.

“Right now the hospital is doing wonderful. Morale is good. But if they bring these strangers in, what’s going to happen?” said Frank Beazley, 78, who has spent the last 40 years of his life in Zambarano.

The governor’s staff insisted that the quality of staffing and service would not be compromised.

“Change is difficult. This was thoroughly reviewed by several administrators from the hospital,” Majcher said. “We all felt that this company can provide the same or better services being provided now at a more efficient cost.”

Beazley is among several handicapped patients who made repeated trips to the State House during the last legislative session to protest the governor’s privatization plans.

With union officials at their sides, the patients chanted. They held signs. They lobbied lawmakers.

“I imagine it’ll be a fight,” Beazely said. “Myself, I can’t very well make waves. That’ll have to come from the union. I would do anything to stop this.”

speoples@projo.com