The use of contracting out : a case study of decision-making and organisational learning in local government

One objective of government is to provide services at least cost whilst maintaining or improving service quality. While this may be an important objective, questions are being asked whether services can be provided more efficiently and effectively by the private rather than by the government sector. The shift of service provision from the public to the private sector is known as outsourcing or contracting out. The objective in this study is to critically examine whether the contracting out of services by local government to the private sector is an efficient management practice.

The contracting out of Parks and Grounds Maintenance services for the City of Kingston in the State of Victoria, Australia, is used as an exploratory case study to identify the variables associated with management decision-making in the contracting out process. Factors relevant to the contracting out decision such as the criteria used in selecting a contractor; the evaluation of a contractor’s performance; and any subsequent changes to management practice relating to the contracting out of the services are identified and discussed.

Political forces were found to be an important consideration in the initial contracting out decision, and the selection of a contractor was influenced by the potential to avoid costs. It was also found that under-bidding and associated cost /profit constraints lead to contractors engaging in non-sustainable environmental practices which resulted in the degradation of the local government’s Parks and Gardens assets. A sustainable asset management philosophy as opposed to an avoidable costs approach now underpins the contracting out process to ensure the preservation of such assets. Further, administrative processes have been revised to make tender specifications more prescriptive, critical components of services have been brought back in-house, and management practices have been amended so that a greater degree of control is exercised over contractors’ activities.

Contract management in government

The primary subject matter of this case is the procedure for contract management in relation to the application for and granting of government funding to organisations. A secondary issue examined in the case concerns the adequacy and effectiveness of governance and accountability controls within organisations receiving public funds for the external supply of services. The case requires an understanding of audit planning and good governance and accountability principles.
This case has a difficulty level that makes it most suitable for senior level students in an Auditing/Corporate Governance/Business Ethics course. The case is designed to be taught in three class hours and would require about eight hours of out-of-class time which includes reading the case material and the articles and other items listed in the references.

Pulling schools up by their bootstraps : the case of a government intervention to raise standards in five 'under-performing' schools

This paper canvasses a school improvement intervention instigated by a government education department to raise the student achievement results of five schools in the outer eastern suburbs of Melbourne. The paper discusses the theory base of the intervention and the outcomes of its first stage which involved a preliminary survey of all students, teachers, assistant principals and principals from the schools involved. The survey results reveal discrepancies of opinions, perceptions, interests and ideas within these key groups. Future plans are discussed in light of both the findings from the first round of theory-building and other pertinent research concerning improving student learning outcomes.

The Victorian local government youth charter : opportunities and dilemmas

Since 2004, a process has been under way to support and enhance the role of Victorian local government in youth engagement – the centrepiece of which is a youth charter guide. This paper, written by one of the project designers, explores the context of local government and the intentions of the development project. It is argued that this not only involves organisational change, but re-thinking foundational assumptions about participation, democracy and young people. The project has provided opportunities to support and enhance youth–local government engagement. It also illuminates many dilemmas that relate to change in these contested social systems.