How does competitive sourcing differ from privatization?
Some think competitive sourcing is synonymous with privatization. This is not correct. Under competitive sourcing there is managed competition between the public and private sector to determine the most cost effective methods of accomplishing a function. Privatization refers to a decision by the government to get out of a given line of business and turn over operations and possibly assets to the private sector, with or without competition. Privatization is the process of changing a government program to private management, control and/or ownership. Under privatization, the government no longer retains responsibility or control over the delivery of the privatized goods or services, depending on the privatization model used.
Some think competitive sourcing is synonymous with privatization. This assumption is not correct. Under competitive sourcing there is managed competition between the public and private sector to determine the most cost effective methods of accomplishing a function. Privatization refers to a decision by the government to get out of a given line of business and turn over operations and possibly assets to a contractor to perform that business, with or without competition. Privatization is the process of changing a government program to private management, control and/or ownership. Under privatization, the government no longer retains responsibility or control over the delivery of the privatized goods or services, depending on the privatization model used.
Some think competitive sourcing is synonymous with privatization. Competitive sourcing is a method for cost comparison. It does not always result in contracting the work out. A competitive sourcing activity is subject to the rules of OMB Circular A-76 (revised May 2003) and involves a decision process to determine who can efficiently provide high quality services. Competitive sourcing allows government employees to compete for work alongside private sector employees.
