Competition Bidding
Also
know as Managed Competition
5 Tools
There are a number of terms used to describe the new dynamics of not
simply relying on the traditional government department to perform a
function, such as paving roads.
Managed competition, outsourcing, privatization, and competitive
bidding are some of the keywords used to describe ways of bridging
a budget deficit and saving taxpayers money. Each term is similar, in
that they involve allowing outside, private firms to bid for the
services a government is to provide. However, there are some additional
connotations that are important to note.
The terms "privatization" and "outsourcing"
is anathema to public employee unions, as these denote the loss of work
for its members and an assumption that those workers who had previously
done the work within the government structure would no longer be doing
the function.
"Managed competition" and "competitive
bidding" give due respect to the notion that the public employees will
have a fair chance to compete against private workers. However, the total cost of providing the service,
including all overhead, will have to be calculated. Under competitive
bidding, a department bids for the work like a private vendor. In the
advanced model even outside public agencies may look to pick up new
revenues by bidding for a neighboring government's work.
While certain elements of public employee unions, such as
the Indianapolis local chapter of the American Federation of State, County, and Municipal Employees (AFSCME)
have adopted this new dynamic, others have yet to see the win/win
prospect of a competitive structure.
Managed competition involves a partnership between managers and
workers, in which the union is not allowed to forestall competition, yet
workers are reassured as well. This model has worked in many areas with
a promise not to lay off current workers. Through
cross-training and proper incentives, much can be done to gain a solid
working relationship within the new system with the union. The managers
and workers learn to pull together to focus on the outcomes.
DEPLOYING
MANAGED COMPETITION
Here are some of
the places using competitive bidding
CITIES
Phoenix,
AZ
Indianapolis, IN
Charlotte, NC
Plano, TX
Steve Fantauzzo of
the Indianapolis local AFSCME, has led the charge for competitive
bidding. The Indianapolis union has thrived under this system.
It became the method for the union to overcome a privatization strategy.
► See Interview with
Fantauzzo
►Also, watch Real Video
Fantauzzo speech
(Video courtesy of Frontier
Centre for Public Policy, Winnipeg.)
Facing
a budget crisis, the left wing government of the time turned to a
competitive model of government, with huge rewards. Lessons
learned from New Zealand
--Reason Pub. Policy
