Read a very interesting article today in "Governing" magazine which is published by Congressional Quarterly. The article is written by Katherine Barrett and Richard Greene and looks at the debate of whether or not it saves money for cities to contract out work.
What they found was that it is actually more expensive to contract out and gave the example of the State of Texas which found that potholes filled by their own Department of Transportation cost $23 each to repair, but the ones repaired by contractors cost $129 each. Sealing cracks cost $327 per square mile for state workers and more than twice that amount for contractors.
The State of Kentucky found in an audit that it could have saved $9 million had its own employees, rather than contractors been used to staff mental health facilities.
The authors point out that in Florida because of its extensive contracting out, a Council on Efficient Government now does a cost-benefit analysis and risk-assessment to look at contract and project management as well as performance measurement and continuity of operationsl plans.
Bottom line is getting "policy makers to think about things before they do them, rathn than do them intuitvely."
Guess the voters of Long Beach were pretty smart in passing Prop L which requires such an analysis before we contract out.
