Hostname: page-component-8448b6f56d-mp689 Total loading time: 0 Render date: 2024-04-20T02:08:43.470Z Has data issue: false hasContentIssue false

Contracting Out: Promise and Performance

Published online by Cambridge University Press:  01 January 2023

John Quiggin*
Affiliation:
School of Economics, Australian National University

Abstract

In this paper, it is argued that the benefits of competitive tendering and contracting have been overestimated, and that many of the apparent benefits actually reflect transfers rather than efficiency gains. Moreover, if arrangements for competitive tendering and contracting yield an inappropriate allocation of risk, such policies can reduce welfare rather than enhancing it as is commonly claimed. A number of case studies are presented to illustrate the latter proposition. Finally, some recommendations are presented for improvements in policy with respect to competitive tendering and contracting.

Type
Research Article
Copyright
Copyright © The Author(s) 2002

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

The author would like to thank Nancy Wallace for her helpful comments and criticism.

References

Ascher, K. (1987) The Politics of Privatisation: Contracting Out Public Services, Macmillan Education, Basingstoke.CrossRefGoogle Scholar
Australian National Audit Office (1995) The Sale of CSL, AGPS, Canberra, The Auditor-General. Audit Report No. 14, 1995–96.Google Scholar
Clark, C.M.H. (1962) A History of Australia: From the Earliest Times to the Age of Macquarie, Melbourne University Press, Melbourne.Google Scholar
Commonwealth of Australia (1945) Full Employment in Australia, Commonwealth Government Printer, Canberra.Google Scholar
Commonwealth of Australia (2001) Report of Enquiry Arising from Senate Estimates Hearings on 4–5 June 2001 into Matters Concerning Job Network, AGPS, Canberra.Google Scholar
Department of Employment Workplace Relations and Small Business (2001) Job Network Evaluation, Stage two: Progress Report, AGPS, Canberra.Google Scholar
Domberger, S., Doyle, G., Hall, C. (1996) Competitive tendering and contracting: a response to the critics, CT02-96 April, CTC Research Team, Graduate School of Business, University of Sydney.Google Scholar
Domberger, S., Hall, C., Li, E.A.L. (1995) ‘The determinants of price and quality in competitively tendered contracts’, Economic Journal 105 (433), 1454–70.CrossRefGoogle Scholar
Domberger, S., Meadowcroft, S., Thompson, D. (1986) ‘Competitive tendering and efficiency: The case of refuse collection’, Fiscal Studies 7 (4), 6987.Google Scholar
Domberger, S., Meadowcroft, S., Thompson, D. (1987) ‘The impact of competitive tendering on the costs of hospital domestic services’, Fiscal Studies 8 (4), 3954.CrossRefGoogle Scholar
Domberger, S., Meadowcroft, S., Thompson, D. (1988) ‘Competition and efficiency in refuse collection: a reply’, Fiscal Studies 9 (1), 86–9.CrossRefGoogle Scholar
Economic Planning Advisory Commission Private Infrastructure Task Force (1995), Final Report, AGPS, Canberra.Google Scholar
Egan, J.T., Montesin, H.J., Adena, M.A. (1995) NSW Teachers Federation School Cleaning Services Survey 1994, February, INSTAT Statistical Data Analysts (INSTAT Australia Pty Ltd).Google Scholar
Evatt Research Centre (1990) Breach of Contract: Privatisation and the Management of Australian Local Government, Pluto Press, Sydney.Google Scholar
Fraser, L. (1997) Impact of contracting out on female NESB workers: case study of the NSW government cleaning service, Ethnic Communities’ Council of NSW Inc. Google Scholar
Fraser, L., Quiggin, J. (1999) ‘Competitive tendering and service quality’, Just Policy 17, 53–7.Google Scholar
Ganley, J., Grahl, J. (1988) ‘Competition and efficiency in refuse collection: a critical comment’, Fiscal Studies 9 (1), 80–5.CrossRefGoogle Scholar
Hamilton, C., Quiggin, J. (1997) The privatisation of CSL, Australia Institute Report No. 4, Canberra.Google Scholar
Hartley, K. (1997) Independent Audit of the Bolivar Wastewater Treatment Plant to Determine the Causes of a Major Odour Event, Uniquest Limited, St Lucia.Google Scholar
Humphry and Richard (2000) Review of the Whole of Government Information Technology Outsourcing Initiative, Commonwealth of Australia.Google Scholar
Industry Commission (1996) Competitive Tendering and Contracting by Public Sector Agencies, AGPS, Melbourne.Google Scholar
Grant, S., Quiggin, J. (2002) ‘The equity premium and the discount rate for public projects’, Economics, forthcoming.Google Scholar
Johns, G. (2001) ‘Confessions of a Privatizer: The Privatization of CSL Ltd’, Institute of Public Affairs, Privatisation Briefing, May.Google Scholar
National Commission of Audit (1996) Report to the Commonwealth Government, AGPS, Canberra.Google Scholar
Organisation for Economic Co-operation and Development (2001) Innovations in Labour Market Policies: the Australian Way, OECD, Paris.Google Scholar
Paddon, M. (1991) The real costs of contracting out: reassessing the Australian debate from UK experience, Discussion Paper No. 21, Public Sector Research Centre, University of NSW, Sydney.Google Scholar
Paddon, M. (1993) Competitive tendering and contracting out in British local government, 1979–92, Discussion Paper No. 30, Public Sector Research Centre, University of New South Wales, Sydney.Google Scholar
Rimmer, S.J. (1993) Aspects of competitive tendering and contracting in local government administration (PhD thesis), April, University of New England.Google Scholar
Savas, E. (1977) An empirical study of competition in municipal service delivery’, Public Administration Review Nov/Dec, 717–24.CrossRefGoogle Scholar
Senate Committee on Finance and Public Administration (2001) Re-booting the IT agenda in the Australian Public Service — Final report on the Government’s information technology outsourcing initiative, Parliament of Australia, Canberra.Google Scholar
Sheil, C. (2000) Water’s Fall: Running the Risks With Economic Rationalism, Pluto Press, Sydney.Google Scholar
Tanzi, V. (1982) The Underground Economy in the United States and Abroad, Blackwell, Oxford.Google Scholar
Walker, B., Walker, B.C. (2000) Privatisation: Sell Off or Sell Out? The Australian Experience, ABC Books, Sydney.Google Scholar