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Matt Collins
04-06-2011, 01:23 PM
Cities and States Debate Privatization (http://click.email.reason.org/?qs=89cccef4e01a879a02b83ad3bcc3aba37cfaf3cba5c99c 93e2405cf47f0db396)

At the NYTimes.com's Room for Debate experts are discussing the pros and cons or privatization. Reason Foundation's Director of Government Reform Leonard Gilroy writes: "Contracting usually generates cost savings for taxpayers between 5 and 20 percent on average, though the benefits of competition extend far beyond cost control. For example, service quality improvements, improved risk management, innovation, and access to outside expertise are other benefits often cited by satisfied government customers. Contracting out is simply a policy tool, and like any tool, it can be used well or poorly. There are two critical ingredients to successful government contracting. First, public managers should think carefully about the service quality standards they want to achieve, and then develop strong, performance-based contracts that hold contractors accountable for meeting them. Measurable performance standards should be built into contracts, along with incentives for exceeding standards and penalties for underperformance. Second, once a performance-based contract is in place, government managers must monitor and enforce the terms of the contract to ensure that contractors perform. Government contracting needs to be seen as part of a larger fiscal management toolkit that includes performance assessment, priority-based budgeting, sunset reviews, and many other approaches to reform."