Should State Government Services be Provided by the Private Sector on a Contract Basis?

Douglas Richins

yes Utah is consistently ranked as one of the bestmanaged states in the nation. Without a doubt, one reason for this ranking is that Utah successfully partners with the private sector to provide many internal and external government services. These contracts include

Privatization frequently increases the quality of services, decreases costs to taxpayers, and helps state agencies focus on those work activities that represent their mission, expertise or skill.

While privatization isn't always the answer, very little harm and usually something very good comes from state management looking at privatizing a function. The mere suggestion of privatization can improve service provision inside and outside of government.

Experience has shown that privatization is desirable when:

* It is likely to reduce cost, be more efficient or improve the quality of service.

* There are multiple firms that can provide specific services.

* Privatization isn't as successful when there is a lack of alternatives and government ends up relying on only one source - competition is an important element.

* Sufficient controls are in place to ensure the integrity of the procurement and contracting process.

* Procurement processes need to be fair and unbiased, and contracts need to be clear and include measurable objectives.

* It eliminates unfair competition by state government with the private sector.

Utah citizens will continue to b better served and Utah's government will continue to be the best in the nation as state government managers utilize the private sector by contracting those areas that business is simply better equipped and more efficient at delivering. These contracting partnerships are a win-win for the taxpayers and state agencies as service improves and costs are reduced.

Dennis Hammer

Sharlene Thomas

no The public sector exists to provide services that are important to the citizens of a specific state or county governmental region, i.e., state, county and local entities. In this regard, the measure of success in providing public service is not weighed by the bottom line but by the number of those served in relation to those who legitimately request services within a particular governmental region. Moreover, success in government operations is not measured by profit but by the level of service provided. Thus, the most substantial argument against contracting with the private sector to provide services lies in the differing overall philosophy between private organizations and government on the importance of the bottom line. Since the private sector is always more concerned with the bottom line than in providing needed services, this impacts how services are viewed in relation to both tactical and strategic planning.

Private sector organizations constantly weigh profit margin against offered services, which often results in elimination or modification of the service. The private sector, which measures success strictly by the bottom line, has little or no regard for the need of the service. It is important to understand that service required in a small or remote area is measured by private providers against the likelihood of realizing a profit from offering the service, and consequently, private contractors do not take into consideration the impact on citizens if they eliminate or restrict service in a particular area. Furthermore, when the service is deemed to be absolutely critical for a specific area and cannot be eliminated, the only option the private sector has in order to maintain the bottom line is to reduce overhead, or in other words, reduce its work force. This occurs under the guise of efficiency. The bottom line is certainly bolstered by this action, but at what cost? It is appalling to see so many businesses right-sizing people out of their jobs, with many of these workers losing their homes.

Privatizing services that government organizations provide is a bad idea. It can lead to a reduction in work force, loss of jobs, and elimination or unacceptable modification of needed services.