Here's a new trend to watch - 'managed competition'
by Mary Scott Nabers,
CEO of Strategic Partnerships, Inc.
Public officials in many parts of the country are testing their own internal teams. Simply put, they are engaging in what is called “managed competition.” Here’s how it works. Private firms are invited to compete with government departments on contracts. The result is that taxpayers can be assured that services are being provided at the lowest possible cost.
Local governments are beginning to solicit proposals from private firms for various services including infrastructure maintenance, facilities maintenance, utilities and water and wastewater projects. The competitive process is considered to be “managed” by the government, which sets guidelines for private and public bidders. This allows the city to conserve resources through the efficient provision of services that naturally result from the competition.
This trend is gaining momentum because it streamlines processes and encourages efficiency.
Examples include the following:
- The city of Indianapolis was one of the first to adopt managed competition and has become a leader because of its success with this process. Competitive bidding was introduced initially to encourage efficiency and cost savings and to test the validity of in-house operations.
- Tulsa, Oklahoma, has also adopted the use of managed competition. The city had previously employed a consulting firm to review the cost savings and efficiency generated by this process, and it was found that the Department of Public Works had the most opportunities for managed competition. Interestingly enough, in spite of awarding some contracts to private firms, the city selected city employees for city hall maintenance after a competitive process.
- The city of Phoenix had outsourced its trash collection since 1979, using managed competition to ensure low costs and efficiency. And, attempting to be even more efficient, the city divided waste collection areas into 10 different contracts which were re-bid every six years each. After 2009, however, city employees won the contracts back from a private sector incumbent firm.
- Mayor Rahm Emmanuel introduced managed competition into Chicago’s recycling program. Recently, the city accepted bids for the Blue Cart Recycling program, which facilitates the collection of recycling in six separate service areas mapped out by the city. Two separate private companies were selected to manage four of these areas and the city will manage the remaining two.
- Charlotte officials have implemented a program titled North Carolina’s Managed Competition Program. The program covers a broad spectrum of services including fleet and street maintenance, water services, wastewater utility services and solid waste collections.
This is definitely a trend to watch!