Guidelines for Outsourcing Public Sector Services

GUIDELINES FOR OUTSOURCING PUBLIC SECTOR SERVICES The right outsourced solutions can benefit governments by improving efficiency in performance of public services. Certain guidelines can be followed when deciding to outsource.

2018

Many countries including the US, UK, New Zealand and Australia are using outsourced solutions for non-competitive public services such as IT services, road infrastructures, mail services, public transports, water and waste management, and so on. Public services are those services provided by the government to the people living within the jurisdiction either directly or by financing provision of service. Outsourcing public services is expected to increase efficiency and lower labour cost.

Relevance of Outsourcing Public Services  Outsourcing can free up government agencies to focus on strategy, planning and core functions  It can mitigate the long-term structural challenges faced by the government with regard to healthcare and retirements benefits.  Outsourcing makes research and development (R&D) feasible when the government does not have the financial improvements in performance.  Outsourcing can be a great source of new ideas about how to perform efficiently and effectively use knowledge and resources that are short in supply in the public sector.  It can bring fundamental changes in the organization structure and culture that can facilitate improvements in performance  Outsourcing provides access to the latest advanced equipment and software that will help increase productivity.

An Example: Outsourcing Federal FOIA (Freedom of Information Act) Services With increased need for transparency during the Obama administration, many federal agencies such as the Department of State, Department of Homeland Security and Department of Justice outsourced various aspects of FOIA service to third party providers. Hiring non-governmental employees to work with FOIA processing is an old practice; however, it gained popularity in the recent years with a view to improve efficiency and minimize FOIA blockages. Outsourcing FOIA helps the public by ensuring that information is released in a timely manner.

Scott Hodes, a Washington DC-based FOIA attorney who spent more than a decade working for the federal government says that there should be a uniform policy outlining exactly what FOIA contract workers are allowed to do in addition to officials releasing the amount of money they are saving by hiring private employees instead of federal workers. With every year, the public’s demand to access various types of information is increasing, and to ensure seamless and efficient release of the required information and improved transparency, outsourcing FOIA services could prove to be a good and practical option.

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Tips to Reap Outsourcing Benefits in the Government Sector 

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Determined motive for outsourcing: Achieving cost savings, improving performance, increasing political responsiveness, reducing the government’s ongoing and future financial obligations are among the many advantages of outsourcing. Outsourcing can facilitate achievement of objectives in a strategic plan that otherwise could not be accomplished. It can bring about fundamental changes in the structure and culture of an organization.

However, outsourcing is a complex decision and most of the times governments cite the motivations for outsourcing ranging from cost savings to accessing specialized expertise, increasing flexibility, and implementing high quality service. When motivations are clear, transparent and defined in terms of objectives, you can easily decide which tasks can be outsourced.

The success or failure of any large scale outsourcing initiative depends considerably on the initial level of motivation.

Scope and plan of outsourcing: The more the decision makers are clear about the goals and the expected outcome, the better they can plan major processes, tasks and milestones. So proper scope and plan is important to attract the right suppliers and setting reasonable expectations. Planners should seek advice from potential providers and other experts before drafting the solicitation documents. When adequate scope and planning takes place before solicitation, a more diverse group of stakeholders, public employees, citizens, and elected officials are likely to weigh in. Planners should also set up a reliable information system to facilitate frequent and systematic feedback by scheduling public forums to send comments and responses.

Have specific contract requirements: Contract requirement should show organizational missions and goals. Clearly mention the key aspects of the project that are essential for its success. Contract requirement should have a balance between specificity, flexibility and opportunities. When drafting a contract, look for opportunities for operational efficiencies from the existing method of delivery. Be sensitive to the contract and give due consideration to factors such as service types, price, labour, acceptable levels of risk and so on.

Choose the best vendor: There are many steps involved in choosing the right vendor. There should be rigorous and objective evaluation of all potential suppliers and partners. Find all relevant information about the reputation, capabilities and past performance of potential suppliers. The chosen vendor should be clearly identified and ranked based on evaluation criteria. Evaluation criteria should reflect considerations such as capability, approach, price, management team and contractors’ past performances.

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Assess contract performance both during and at the end of the contract: The above mentioned recommendations suggest factors that can be used to monitor and assess performance. Policies should be in place to insulate performance evaluations and contracts disagreements from undue political influences. The contract should clearly identify milestones, expectations for service levels, output measures and standards. Monitoring performance should be considered an iterative and dynamic process, where learning, change and innovation can occur. Optimize monitoring with technology by making it frequent and by relying on multiple sources of feedback. Leverage information technology to facilitate data collection and evaluation. Feedback should be obtained from contractors, managers and employees, citizens, consultants and community groups. Collect performance data that is useful for decision makers and which can be acted upon to improve performance. Share performance information with internal managers, external stakeholders and contractor staff and their principals.

Finally, make use of less adversarial approaches such as mediation or arbitration to resolve disputes and handle performance issues.

Ensuring Government Stability Governments need to find better ways to meet current challenges and keep up with the expectations of the citizens. The right outsourced solutions can benefit governments by improving efficiency in performance of public services; and by strengthening government institutions politically by enabling them to project the image of a modernized organization that puts paramount importance on technological advancements for effective governance. By establishing favorable business relationships with outsourcing vendors, other types of partnerships can be forged between governments and corporations. Apart from the tangible improvements achieved through outsourcing processes such as IT services, governments can also enrich their overall relationship with the public they serve.

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1-800-670-2809