Current state of Government Contracting

Government contracting – the practice of outsourcing specific tasks or projects to external entities – has been a staple of government procurement for decades. But in recent years, it’s gotten a bad rap. And for good reason. When done poorly, government contracting can lead to a lack of transparency, accountability, and even exploitation of workers.

But is government contracting inherently bad? Not necessarily. When done correctly, it can be a valuable tool for governments to deliver essential services and projects to citizens. The key is to approach it in a way that promotes efficiency, equity, and accountability. However, the current system is plagued by problems that need to be addressed.

One of the main issues with government contracting is the tiered system of accounting, legal, and profit-taking that is built into the process. This means that multiple layers of companies are involved in the contracting process, each taking a cut of the profits and adding to the complexity and cost of the project.

For example, a government agency may contract with a large company to deliver a project, but that company may then subcontract the work to a smaller company, who may then subcontract it again to an even smaller company. Each of these companies takes a profit margin, adding to the overall cost of the project and reducing the amount of money that actually goes towards delivering the service.

This tiered system also creates a lack of transparency and accountability, as it can be difficult to track where the money is going and who is actually doing the work. It also creates a culture of profit-taking, where companies are more focused on making a profit than on delivering a high-quality service.

To address these problems, governments need to rethink the way they approach contracting. Here are three potential solutions:

Solution 1: Insourcing of Work Whenever Possible

One of the most effective ways to improve government contracting is to insource work whenever possible. This means that government agencies should prioritize doing the work themselves, rather than outsourcing it to contractors. By insourcing work, governments can ensure that the work is being done to a high standard, and that workers are being treated fairly and with dignity.

Insourcing also allows governments to build their own capacity and expertise, rather than relying on contractors to do the work. This can lead to cost savings and improved efficiency in the long run. Of course, insourcing isn’t always possible, but it should be the default approach whenever feasible.

Solution 2: Outsourcing with Accountability

When outsourcing is necessary, governments should prioritize working with contractors who can actually do the work themselves, without subcontracting it out to multiple levels of subcontractors. This means that governments should be looking for contractors who have the expertise and capacity to do the work, rather than just acting as middlemen.

By working with contractors who can do the work themselves, governments can ensure that the work is being done to a high standard, and that workers are being treated fairly and with dignity. This approach also promotes accountability, as governments can hold contractors directly responsible for the work they’re doing.

Solution 3: Breaking Down Larger Contracts into Smaller Ones

Finally, governments can improve contracting by breaking down larger contracts into smaller ones, and giving them directly to smaller businesses. This approach supports small and medium-sized companies, who often do a lot of the subcontracting work, but rarely get the opportunity to bid on larger contracts.

By breaking down larger contracts into smaller ones, governments can promote competition, innovation, and job creation. This approach also allows governments to build stronger relationships with smaller businesses, and to ensure that the work is being done to a high standard.

These are just some of my random thoughts, thanks for reading.