Second in a Series: Commonwealth Competition Council -

Second in a Series: COMMONWEALTH COMPETITION COUNCIL

by Otis Brown, Chairman of the Competition Council

This is a second in a series of articles intended to communicate with state employees about the Commonwealth Competition Council. The article published in the September issue of "Foresight" discussed the creation and role of the Council. The Council recognizes the value of motivated state employees and their concerns resulting from competition and privatization.

I would like to quote from one of the many letters and phone calls we have received as a way of introducing this article on the Council's Public-Private Performance Analysis. This individual ended his letter with this statement which states the Issue very well.

"Public employees are not against the privatization of public services. We are also taxpayers and as public employees, we observe inefficient practices within our agencies. However, we also realize that privatization may not correct those inefficiencies, in the long run privatization may not improve services and there is no guarantee that privatization will cost less. Consequently, the decision to privatize public services should be scrutinized and a variety of alternatives considered."

This "variety of alternatives" may be viewed as a strategic sourcing continuum which may range from retaining the function as a government entity through various alternatives of outsourcing, privatization and competition by the government with the private sector. Hence, the Council sees the need for a Public-Private Performance Analysis to be prepared as a guide for any final decision.

The analysis includes a series of questions focusing on the function or activity being considered. Defining the magnitude of the problem will allow one to put into perspective what is desired and what is to be resolved by selecting a specific alternative on the continuum.

What goals do you wish to achieve through contracting functions? The objectives should be quantifiable and measurable. The objectives are used to help evaluate vendor or government proposals' and then should be used to evaluate vendor or government performance once the contract is implemented.

Cost of service delivery is one area that can be very troublesome. Nothing upsets the taxpayer more than to find out that costs were either under or overestimated or there are major cost overruns. While costs should not be the sole criteria for a decision, they should be an important consideration. In comparing internal costs with contract costs, the internal costs must include all the costs of an operation, not lust those that are directly charged to the function. Added details about the program to perform the detailed cost comparison will be discussed in future articles.

Again, we believe it is imperative we communicate with our employees and to include you as partners in the process. By working through a Public-Private Performance Analysis in a thoughtful, systematic way, there should be no unpleasant surprises, and the decision-whatever it turns out to be-is defensible to employees and to the taxpayers.

Taskforce on Commercial Activities of Charitable Organizations

Competition@dpb.virginia.gov