Implementation structure
Second, government leaders must establish an implementation structure to address the day-to-day issues of competitive sourcing. They are in the key position to guide the development of the opportunity inventory and to assist the government agencies with this change in approach. They are not directly responsible for completing projects, as that is the responsibility of the impacted agency. They serve as a check when the agency has both regulatory or policy functions and is also the service provider. They are an internal resource to assist and guide the new competitive government program. Government leaders can help achieve separation of policy and implementation issues.
The following are key questions -- honest answers can help ensure success.
- Given the nature of the activity, what type of privatization (competitive sourcing) would be most viable and best serve the public interest?
- For example: contracting out, managed competition, divestiture.
- Is the activity already performed in the private sector? (This is the Indianapolis yellow pages test.)
- Is there a competitive marketplace? If not, can one be created? (Exercise caution when considering market creation.)
- Are there barriers to entry by private firms, such as significant start-up costs? If so, can they be mitigated?
- Are there factors that could limit the use of privatization?
- Examples include "natural monopolies," in which production cannot be duplicated, such as a single source for city water supply, and "public goods" that cannot sustain private markets, such as regulatory functions without a revenue source.
- If so, how could these factors be mitigated?
- Will contractual arrangements and the type of service permit the government to switch from one service provider to another without serious disruption in the flow of service or undue cost at the end of the contract or option year?
- Will there be an office and/or knowledgeable staff available to collect and analyze performance and cost data and provide technical assistance to agencies?
- Have the legal, financial, and technical risks and liabilities to the government all been identified, considered, and evaluated?
- What will be done with the activity's current facilities technology and other dedicated resources?
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