The Perils of Outsourcing

While serving on the PDOT budget advisory committee, I heard strong suggestions that PDOT could be more efficient by outsourcing some of its functions to the private sector.

Well, ODOT went that way at the beginning of the decade, and Jim Mayer reports on an audit of the results in yesterday’s Oregonian. The conclusion: ODOT may have paid as much as 20% more for engineering than it would have cost internally. Apparently ODOT just wasn’t prepared to manage that large a change.

In the private sector we’ve learned that outsourcing only works if you manage it very carefully. Apparently government is learning the same lession.

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