Effects of Contracting Out Engineering Services Over Time in a State Department of Transportation

Abstract

Perhaps the most prevalent form of privatization, in terms of incidents of its use, is contracting out for services. This is especially true in state departments of transportation (DOTs), which have seen a rapidly growing reliance on contracted professional services in recent years. With this growth has come a variety of managerial issues that speak to the efficacy of this mode of service production. In this article we identify and analyze these issues by first reviewing the literature on managing contracted professional services, with a focus on the experiences of DOTs. We complement the review with an in-depth, multicase examination of the experiences of one state DOT over the span of a decade, to better understand their changing conditions, motives, and impacts of large-scale contracting out. We conclude that problems associated with contracting out could be avoided with planned changes in procedures, organizational structures, and human resource demands.

The Impact of Relational Factors on Contracting Management in Public Organizations

“…The results are consistent with the previous studies of Williamson (1981, 1986), gen and Kingsley (2007, and Lamothe, Lamothe, and Feiock (2008) that commonly consider transaction cost as a major criterion in contracting under uncertainty. gDOT and contractors have developed bilateral interdependency through a longterm contractual relationship because of increasing transaction costs.…”

“…We found that there has been a steady stream of employees moving from the agency to contractors. as gen and Kingsley (2007) found, brain drain can often occur under outsourcing because of stronger incentives (e.g., salaries and flexible work schedule) in the private sector. Brain drain can contribute to a hollowing out effect, losing the agency's internal technical capacity and relying more on contractors.…”

“…If this is the case, it appears that former gDOT employees have more advantages in being hired for contractor programs than nonformer gDOT bidders do because they have more rules and mission familiarity attributes. as gen and Kingsley (2007) highlighted, managerial burden associated with contractors could be a major justification for direct solicitation of experienced contractors, who are often former employees or at least hire former employees. Likewise, they might have relatively more advantages in technical and managerial capacity attributes because they have managed and provided these services in gDOT for a long time.…”

Public-Private Partnership Networks: Exploring Business-Government Relationships in United Kingdom Transportation Projects

“…For the lead public‐sector sponsor, as well as other levels of government that are involved, executing a PFI project typically involves hiring multiple firms to serve as independent financial, insurance, legal, and technical advisers throughout the procurement process that may subcontract work to other specialist firms (Grimsey and Lewis 2004; Reeves 2008). This advisory role has become particularly significant because governments have increasingly outsourced many aspects of the process of procuring transportation projects to private‐sector consultants and contractors (Gen and Kingsley 2007; U.S. Federal Highway Administration 2005).…”

Outsourcing Expert Services by State Transportation Departments

“…However, most of the studies have been case studies of one or a few highway agencies (DeHart-Davis & Kingsley, 2005;Gen & Kingsley, 2007;Lee & Kingsley, 2009;Ponomariov & Kingsley, 2008). Our study employs the results of a survey sent to all state DOTs in the United States to explore the effects of outsourcing on the cost and quality of services.…”