Outsourcing Government: A Strategic Approach to Partnered Privatization

By: Shami Dugal

Part I: Prologue

Government and its operations have evolved considerably since the country was first established as a Republic in 1776. Chapter 1 in the book by Hays, Kearney, Coggburn, – Competing Perspectives on Public Personnel Administration – talks about the human resource model and how it has evolved through US history to today.

We have progressed in the past two hundred years to a Public/Private Sector “Partnership” model which I propose can be further extended to “A Strategic Approach to Partnered Privatization” in order to reduce government. Why? In short, because government is bloated and the private sector needs to be energized. This has a direct effect on funds needed by the government to run its operations, our economy and on taxation. More on it in this multi-part article.

What I am proposing is that when the government engages the private sector for contracted work, they should not retain an internal business unit to shadow the contractor’s staff with the expectation of taking the work over at some point.

When a government department evaluates responses to a request for proposal, knowledge transfer is considered a differentiator between the responses. The truth is that most vendors pay lip service to this requirement. There is little expectation that the public sector department will gain sufficient experience or retain the skill sets necessary to take over the work; else it would have done the job in the first place.

The expectation should be that either an internal organization should bid on the same job along with external competitors, or expect the work to be done by external organizations at a competitive cost with the required quality and expected metrics and results.

The benefits of partnered privatization should result in a trimmer public sector, a more robust private sector, practical expectations realized against predefined measures, resulting in lower taxation.

The Law of Natural Selection

It is instructive to study the evolution of political systems using Darwin’s theory of Natural Selection.

Darwin’s theory of evolution has four main parts:

1. The world is not constant, but continually evolving and changing.

2. All organisms are derived from common ancestors by a process of branching. New organisms often share traits because they descend from a common ancestor.

3. Change is gradual and slow, taking place over a long time.

4. The mechanism of evolutionary change is natural selection based on two factors: Survival of the “fittest” in terms of inherent strength, and adaptability to its environment.

Government policy, as we are well aware, also continually evolves and changes, albeit in an agonizingly slow manner. There are two ways in which policy changes – using the Root and Branch methods. The Root method implies that there is a fundamental shift away from or to another approach. We are all aware that it has taken some sixty years for a change in Health Care policy. For all those who decry it as a night and day change, it really is a small change other than in the minds of those that would like to use it for political fodder. The more dramatic changes were left out to appease both parties in a compromise to get it passed. However, that being said, it still qualifies as a Root change.

The Branch method is more common. It feels like a winding road or river that leans to one side or the other, up a little hill or down a slope and the odd pot hole or drop to deal with. Policies navigate the floor of the house and senate in much the same way. After a while, one cannot visualize at a given point where they originally started. By the time a change has occurred, it cannot really be identified with either party; it looks much like an inter-office envelope with names of many individuals from both parties, with cursory attention to its contents.

Some changes may become associated with one party or the other, and their respective leaders or point people. The label may be a positive or a negative one depending on how the change is perceived. Some party members are ousted when they are sacrificed for the good of the party, or lauded having shown up at the right place at the right time, or having managed their environment well.

So, like an organism that may falter or last for a long time, so it is with politicians and their policies. The “fittest” survive, either on their own merits or because they have adapted well to their environments.

This is the first article in a series of “Outsourcing Government: A Strategic Approach to Partnered Privatization” articles. Stay tuned for part II.

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Shami Dugal is a member of ASPA and on the SHHSA Board. He has Bachelor’s degree in Operations Research from University of Waterloo (Canada) and an MPA from Drake University (Des Moines, Iowa). He can be reached at [email protected].