What is government?
Government is a group of people who rule or control a country, state and city. Government is an institution that charged with regulating, protecting and helping the citizens. The local government, state government, and central government all have different goals and responsibilities.
Government collect tax, makes rules, provide protection, supervise over the citizens, etc
Government and Business
Business is an organization or enterprising entity who make money by producing or buying and selling products.
Governments and businesses are social institutions that benefit society in general. Both share the same features with varying differences. Both are systematic organization both have leaders and members. businesses usually have the owner or entrepreneur as the leader of their organization and government leaders are elected through election. Both government and business generate profit, government through tax and other fees where as business through sales of services and goods. And both have there budget
Government have lot different sector and their subsidiary under there control just like the lager businesses. Just like a company outsources there business for better administration and cost reductions government too outsource some of there services and sectors to contractors. As business can’t outsource there core function same government too can’t outsource core functions to contractors example, such as military operations, police enforcement, fire safety and tax collection etc.
Sectors which can be outsourced is already been specified in the law by the government, Like the non core function such as Water, Gas and Heat, Waste Management, Public Transportation, Parking Meter Management, Electricity , etc can be outsource.
As you have seen government too can outsource, Let’s discuss why, when and which service do they outsource
Just like any other organization, government to need money to properly run and manage their territory. They too have a year budget for the same. Outsourcing is a frequently-debated solution for government when every there is some budget crisis. As outsourcing cut cost and reduce expenses.
Small Cities Outsource to Solve Budget Issues
In US California, dozens of small cities have declared bankruptcy because they cannot afford to run their cities the way they used to; To deal with it they need to downsize, automate, and outsource. If all services are properly outsourced, it may solve the problem of the high cost of government services, while also dealing with poor services.
Privatization for better experience
State and local governments are using innovative methods, to improve the effectiveness of their operations including outsourcing. Governments outsourcing there services might help them to improve relationships with their customers, the citizens through greater accessibility to services and a prominent emphasis on customer service.
In order to o that, many governments have determined that due to limited resources they have, some functions must be shifted to the private sector to improve overall service levels and concentrate on meeting citizen expectations.
Back in the day privatization meant to take public services and selling or spinning them off. But that has change, today it means selling the service while the government owning some shares or having seats on the board of directors. All the services will be provided by a private company, and the government will manages the contract. It is more like outsourcing today.
Outsourcing is getting common in government sectors and is gaining lots of popularity. Recently with change in the government polices and disinvestment done by government to the third party organizations to outsource some of there services.
There are lot of example of government outsourcing to a third party,
Some of those example are stated below
NASA outsourcing some of there space mission to spacex because of there low cost and better success rate,
Indian government too outsource their book of accounts to third party organization for keep track of there transactions.
outsourcing of government website and software to IT service provider like TCS, wipro etc,
Some country have also started to outsource the core activity’s like defense,
Maywood of California has outsource almost every thing and it has scaled back to just a mayor, a lawyer, and a controller, and outsourced everything else. All of this started as an experiment as a cost-control measure.
With outsourcing gaining popularity in public sector government has to come up with some regulations to be followed by the contractors.
Most of the outsourcing done by the government is through auctions, government conduct auctions prior to outsource, the one with the lowest bid wins the outsourcing contract by the government, Government always look for the most reliable option cost wise and work wise before spending money from government funds. Depending upon the service government is looking for the contract could be renewable or non renewable.
Taking up government contract for the contract could be a real pain for contract sometime. As they have to follow strict policy stated by the government and some time they give impossible deadline for the completion of work.
As country’s are involving and growing, outsourcing too is growing with them. Government had started to relies on outsourcing more than hiring employees, as outsourcing service an certain sectors could provide better, faster and effective operation.
As outsourcing in getting popular government had stared to spend a signification chunk of GDP on outsourcing. The above date shows how much government of different country spend on outsourcing as compare to there GDP with United kingdom, topping the in the chart.
While many citizens are against outsourcing, as it increase unemployment, increase the possibility of breach of information, an doubt the effectiveness of it. Although outsourcing in government is yet to proof it self to public.
But it can’t be deny that outsourcing have helped the government to provide better services to the citizens. Government to need to keep up to the fast growing private sector in terms to technology and efficiency which they have as compare to public sectors. So outsourcing privies them those service without significantly changing a lot. Outsourcing helps them to get the most up to date technology and better efficiency. Outsourcing do helps the governments public sectors to keep up it the fast growing world