Many local governmental functions are now being performed by the third party. Discuss how contracting out services can help to deliver quality services to the people at a local governmental area. Local government have different role with federal government. Federal government mostly involves in administration and creates a policy for states while local government more into providing services to the society. Contracting out entails decentralizing the responsibility for production or services to non-government agencies, thus, it means that the government establishing the relationship with the agencies that provide the service and goods (Bish & McDavid, 1988). Contracting out could be define as
the funder or controller of a public service, in this case a local authority, will contract to a third party a part, or the whole, of a service delivery organization at an agreed price for a specified level of service and for an agreed period of time (Harrington, 2003, p. 187).
It means that contracting out is like the service that initially provided by the local government, will be transferred to the other party, like public or private organizations. Hence, the service will be provided by the non-government agencies using the money provided by the local government. However, the agencies that were being chosen by the government did not
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Public or private agencies will provide the service while local government will purchase it. The service that was being purchased by the local government will be used by the customers that are the society. It is an approach to restructure the public management to be more effective by contracting out the functions to other party beside the government can save more cost. So, all the government decision regarding the services would affect the non-governmental agencies and vice
Any contract for construction, alteration, or repair of public buildings or public works, including painting and decorating;
Case 06-12 Outsourcing Services, Inc. Outsourcing Services, Inc. (OSI), a SEC registrant, provides a variety of EDP and payroll processing services to third parties. OSI recently has introduced a new service line to provide product help-line support services through customer service representatives (CSRs) who are employees of OSI. On January 1, 2004, OSI entered into a service contract with Company X. Pursuant to the terms of the contract, OSI’s CSRs will provide technical support for Company X’s products. The contract has an initial term of one year and is not cancelable by the customer. After the initial year, the contract is renewable at negotiated market rates. Prior to starting this new service line, OSI hired independent consultants
This specific measure could provide efficient services to the city like in the case of Sandy Springs. The city of Sandy Springs has successfully incorporated in 2005 to a company named CH2 HILL .As a result the city of Sandy Springs does not have current liabilities and its services have met standards of efficiency. Based on that premise the contractor has overseen the process and that the bids with subcontractors were essentially offering prime services. Furthermore, CH2 Hill has also implemented a system where customer service hot lines is offered 24/7 and complaints were resolved and address accordingly without any red tape (ReasonTV,2011). Having the example of Sandy Spring it is evident that the premise of contracting a company to take over the subcontractors’ hiring as well as all services provided should be the best- case scenario to take advantage of the privatization model
There are a variety of differences and similarities between federal, state, and local governments. This includes, but is not limited to, the responsibilities, size, and staff of the administration. The machinery of government is intended to better the quality of citizen’s lives. Ultimately, federal, state, and local governments were established to work together in bettering programs and laws (Berkley & Rouse, 2009, p.32).
Privatization has grown exponentially over the years as the government continues to try to find more economic ways to conduct business. Through the use of contracts, this is achieved by utilizing the lowest bidder. Should the work being done not meet the standards set forth, the contract is not renewed and the process begins again saving the government money by not having to hire Civil Servants who are then employees of the government, whom do not have a contract and are very difficult to get rid of should their work not be satisfactory.
The need for financial stringency in public organizations due to budgetary pressures and tax resistance coupled with the need to Managing /balancing budget deficits and provide quality services with a reduction in revenue has always been a major challenge for public organizations. The need to save money and at the same time provide quality services, had forced government agencies to privatize and contract out. Recently, there is greater involvement of the private and nonprofit sector in public service delivery. More and more government functions in service delivery are now carried out by private and nonprofit organization. This is one part attributed to the belief that private organizations can provide services more efficiently and effectively than government operated services. And the other is the fact that it is cost effective and takes a lesser time frame. These two process are indeed unarguably beneficial to the government and private sector as well as the beneficiaries, but they can be also very daunting accompanied with huge challenges especially when not executed in the rightful manner. The case of the crummy contractor by Rainey depicts such a complex situation , where the process of contracting out was poorly conducted. The case highlights the demand for privatization and contracting-out and most importantly some of the challenges of privatization and contracting in government organization. it goes on further to identify some crucial pointed to be
Why is contracting out so attractive to a public agency? Privatizing has its advantages that represent benefits to the agency.
Because of the size of federal government, there are often opportunities for businesses to work fiscally with the government. When businesses research the possibility of doing business with the government, the verbiage shows that while there are a number of steps necessary in order to qualify for government contracts, there are also tremendous opportunities.
One of the many arguments is that most, if not all public sector service(s) service is monopolistic. Often time, there is one source of supply for a government service. For example, residents of a city have one fire department, one police department, and one system of public education. Even though each of those entities, many of them have different branches, they are all fall under
Contracting out is the process through which public organizations contract with private sector organizations to provide services normally provided by public agencies. It is a form of privatization, which is defined as any shift of activity or functions from the state to the private sector, more specifically, the shift of production of goods or services from public to private. (Starr, 5) Privatization reduces the role of government and increases the role of private sector agencies. However, public agencies maintain ultimate control over the provision of services and they control government funding.
Over the last fifty years, there has been a growing trend in the US public sector to outsource government services at the federal, state, and local levels. This stands in stark contrast to the traditional model of previous generations. In the traditional model, public services were administered by large bureaucracies consisting of government employees working for the public good. Over the last several decades this trend has increased. Today, nearly every government agency and private sector organization adopts contracting to some extent. From acquiring weapon systems, as with the DoD, or providing government services, as with HUD, contracting has become
Beginning in the 1980s, many jurisdictions started to seek third-party alternatives to provide public service under the pressure for cost savings and the call for government efficiency. Private organizations are known for their expertise in specific fields – if leverage private sector know-how well, it can bring success to public sector – high quality public services can be delivered with lower costs. Therefore, public organizations can concentrate on solving critical tasks when they contract out the mundane work to private sector. Outsourcing waste management is one of the effective privatization solutions for public organizations given its easy-to-measure nature, and it continues to be popular among local governments. Nevertheless, the success of privatizing government services is not guaranteed. If not manage privatization well, it could result in increased costs, organization structure and culture change or legal liabilities. In addition, take advantage of privatizing public services redefines the nature of government service and governance as it creates a partnership between private and public sector. With the rapid pace of technology development and the obligation of government to spend taxpayer’s money strategically, privatizing government services has gained unstoppable momentum.
Decentralization may not always be efficient, especially for standardized, routine, network-based services. It can result in the loss of economies of scale and control over scarce financial resources by the central government. Weak administrative or technical capacity at local levels may result in services being delivered less efficiently and effectively in some areas of the country. Administrative responsibilities may be transferred to local levels without adequate financial resources and make equitable distribution or provision of services more difficult. Decentralization can sometimes make coordination of national policies more complex and may allow functions to be captured by local elites. Also, distrust between public and private sectors may undermine cooperation at the local
The term is also used in a quite different sense, to mean government out-sourcing of services to private firms. (We are Assist You, n.d.)
The idea of fiscal decentralization injecting competition among local governments has an added advantage of making local officials pursue customer-driven investments which are more likely to meet expectations of local people and patronage of services. When local service delivery meet local people expectations, they tend to pay for services and even honor their tax obligations without much coercion because they even appear more willing to do so (Briscoe and Garn 1995, Litvack & Seddon, 1999). Additionally, if what is being supplied meets local demand and associated with the necessary openness or cost recovery, local people and groups have a higher tendency of demanding accountability, closely monitoring local government activities which will reinforce the corruption reduction theme discussed previously. Local monitoring and demand side of accountability help to reduce information asymmetries and corruption tendencies which may have potential to weaken both allocative efficiency and cost recovery. This demonstrates each of the themes are closely interrelated and not mutually exclusive.