Contracting Out

Contracting defined

The formal definition of a contract is simple: ‘An agreement between two or more parties, especially one that is written and enforceable by law’ (http://Answers.com, 2004). A contract specifies the good or service being procured, and typically includes information about price, schedule, and the definition and amount of the service or product being delivered. While the definition of a contract might be quite simple, as Phillip Cooper notes: ‘great latitude is left to the contracting parties to an agreement to have the tools to fashion and implement it. Negotiations resulting in a meeting of minds are the dominant dynamic in most contracting’ (2003: 13).

This chapter focuses on contracts between government and non-governmental entities and the role of the government contract manager. Government contracting has expanded substantially over the past three decades and has taken on ideological baggage, often associated with shrinking the size of government, lower pay, job losses, and outsourcing of jobs to other countries. At the same time, government has been a major purchaser of goods and services in the marketplace for hundreds of years, buying everything from weapons, uniforms, airplanes, and ships to paper, soap, light bulbs, and paper clips.

Public administration scholars pay particular attention to the relationship between government and its typically non-governmental contract partner. While the contractor is nongovernmental, the product or service they provide through their contract is generally perceived as public and the government is held accountable for outcomes. As Jeffrey L. Brudney and his colleagues (2005: 394) describe it:

Central to Brudney's definition is the notion of public control, funding and decision-making. The government is the principal and [Page 238]the contractor is simply the agent. Our definition of contracting leaves no ambiguity about the power relationship we see in government contracting. We understand that those who implement policy hold the power to define policy through administration, but that any exercise of this power by the contractor does not eliminate or diminish in any way government's responsibility for the actions of contractors.

The make or buy decision and managing organizations

There is nothing new about government carrying out its responsibilities through contracts. Don Kettl makes this point in recounting George Washington's complaints about the shoddy uniforms supplied to his revolutionary troops by private contractors. At the same time, many observers believe that the nature and impact of government contracting has changed significantly since revolutionary times. Stephen Goldsmith and William D. Eggers discuss the evolution from simple contracting for goods and services, to contracting as a means of establishing and maintaining complex inter-organizational

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