Jeffrey Mawdsley, for the Master of Public Administration degree in Political Science, presented on October 19, 2001, at Southern Illinois University at Carbondale.

TITLE: Local Governments Contracting Out: The Process of Ensuring High Quality Service Delivery

MAJOR PROFESSOR: Dr. Keith Snavely

Contracting out has become more common among local governments than it used to be. However, there is a problem that local governments must address. How can a government ensure that is will get the quality of services that it desires? The answer lies within the contracting process. The process has five major steps, and at each stage there is an opportunity for government to ensure high quality service.

The first step of the contracting out process is government determining which services should be contracted out. Contracting is attractive to government agencies because it can save them money. However, not all services have been successfully contracted out because there is no method for a private firm to reduce costs. Governments should only contract out services that they are sure will result in cost savings.

Second, the government agency must develop the standards of the contract. At this stage, the government agency can specify as many facets of the operation as they see fit. However, the government agency should be careful not to make these specifications too strict, or the private firm will have no opportunity to offer the services at a lower cost.

Third, the government must notify potential contractors that the government will award the contract, and is seeking bids for it. The government should try to advertise the bid to get as many potential contractors as possible. This allows a government to have a choice among several different bidders.

Fourth, the government agency must choose a bidder. The government agency must examine each bid and choose the bid that closest meet the terms of the contract for the best price in an unbiased manner.

Fifth, the government agency must oversee the contract as the private firm is executing it. This can be done in a variety of ways, including on-site inspections and documentation of procedures.