With an upswing in office 'outsourcing' come questions
Imagine the scene: A prime gas station location comes up for grabs. A representative from Fairfax-based Mobil Corp. squares off against a representative from Exxon Corp., both bidding to buy.</br></br>Now here's the twist: Neither real estate executive works for the oil company he represents. Instead, both are employed by Dallas-based real estate developer Trammell Crow Co.</br></br>In this era of corporate downsizing and cost-cutting, the newest trend is what is called outsourcing, or turning over operations once conducted by in-house employees to private contractors. About one-half of all corporations now use outsourcing for some real estate operations, according to an Ernst & Young survey for the national Association of Corporate Real Estate Executives.</br></br>Among the local firms turning to outsourcing is Mobil, which recently signed up with Trammell Crow, displacing much of its former in-house service center real estate staff. NationsBank Corp. is similarly negotiating with Crystal City-based development firm Charles E. Smith Cos. to handle property management of its hundreds of branch banks and operational locations in the Washington area.</br></br>But as the trend picks up steam, questions are arising about it. Of the firms surveyed by NACORE, many said that outsourcing had sometimes ended up costing them more money and providing bad service. Conflict-of-interest questions are bubbling up as well, when contractors provide a similar service to firms that compete with each other.