Agenda - Council - 03/24/1987 - Laserfiche WebLink

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areas ~uch as food xc~ice, equipment m~tenance, job trainins, and m~ica~ ,upport. It is advnntngeou.% to have more ~hn~l one supplier if maximum cost ~vl~ are to be enptured. To trade one monopoly, iovernment provision, for another monopoly., private provision, ts not likely to be veo hdpfnl. A third factor affecting the ava~labili~.~ of contractors is the sovernment itself. Some contractors refuse any government work,, while others won't contract with cer- tain governments. St~! others increase the s~.e of their overhead charsc~ when dcalini~ with $ov~tment.t~ The reluctance to deal with government is v~ually a reflec- tion of past experiences invol~-$ cxc~ive red tape, exce~ive bonds or ~iability waivers, s.~ow payments, political shcnanif~ans~ and in some ca~s outright cor- ruption.~ Thc~e are problems th~ a sovecflmen~ can correct ~iven interest and time, but th~~ may be a real impediment to contracting, at legist in ~c short nm. Administrative Oonlrol. Thc succes~ of roany service contracts rests on good administrative control by the contracting $ovcrnment. One c~ty m~er noted that it is much more difficult to administer amtract services than inhouse services because "contraa~ don't think." Although many governments assume that_ once the con- tract has been si~ned their job is finishe~, this is not the case, because the constraints are real. While a contract may contain detaile~ specifications, someone must be on hand to ensure that they arc foL lowed. Also there arc always factors lcf~ uncovered by eva~y contract. If thc local government do~ not have someone on hand to mon/tor thc contras.~ thc contractor will bc tempted to take the easy way (~ut, often with inconveniences for c~tizcns and di~astr~,u~ results for thc governm.ent. Proper administrative control starts wL:h a weft-drawn contract including a detailed del'tuition (~f thc aery/ce to be performed, its out~uts, important qual/ty character- istic~, and penalties for nonpcrformance~ One city man- ager included thc city staff who monitor~t and inspected contractor work Jn thc contract drafting p:'oce~ to ensure thc indus/on of proper safeguards. Crotn! purchase of aery/ce contracts rest as much on contract formtdation as any other single consideration. A good contract is a good base for a ~uc~essful pur- chase of service agreement, but ~t is al~o necessary to ensure that the tcrm~ of any agreement are ~ ful- rifled. ~ requires periodic inspcctiom rcl~ular mc~- inEs with thc contrac/or, and thc va~n~(te~s to impose sanctions if need be. Transitional Factors. Success in contracting will depend partly on how weft the shift or tr~_n~tion to contractina is made. (Jetting off tm the Mona foot can be fatal, and can affect all future contracfina efforts. There are four types of transitions, each with its own set of problems: · Movina from no service to contract serviceolikely to be the simplest transition for there are normally no institutional impediments. · Moving from contru:t serv~ to government service-= usually made under traumatic circumstances---the contractor has defaulted, has not provided acceptable service, or has raised the price dramatically. · Moving from contract service to contract service-- common transition that can raise serious problcms. · Moving from government service to contract service~ type of transition likely to be thc most difficult be- cause of institutional rigidities. Thc ease of transition ~di be affected by many consider- ations includins the type of service, experience of the contractor, contract visibility, and role of government leaders. Contract services that have much public con- tact, like garbage collection, arc likely to be much more of a challenge than are inte~tuediate services that are used by the government. The contractor's knowledge of the jurisdiction, experience in delivering thc service, and ability to cope with the unexpected will play an impor- tant role in the tr~n-_~tion. Fmally, the visibility of the contract to the public, the interest of the media, the cir- annstances under which it was awarded, and the sup- port of the el_,~__~ body will affect the ease of transition. The transitional pangs will also be eased with careful planning and continuous monitoring. One practitioner offers the following suggestions: · Keep the public informed of the change and warned of possible problems · Keep the elected officials and the media up-to-date on any problems, and what is being done to solve them · Keep employees informed of any chaises · Hold regular meetings with the contractor.** Competition. A degree of competition amona suppliers is not a requirement for local government contracting, but it helps insure that a government will ma~miTe its savings. Normally thc larger thc number of suppliers thc greater the competition. However, since collusion some- times exists among firms the number of potential sup- pliers is not alwa~ a perfect measure of the degree of · competition. Also, one efficient firm and a knowledge- able local government official can often agree to a con- tract that costs no more than if there were a number of · potential suppliers. To assess the degree of competition in contracting it is necessary to examine the way the contracts are written