Meaning of Contract and Contract Out: A tool of New Public Management (NPM)

Contract refers to an agreement between two parties or more persons to create and define liability. If the contract is broken or not done as per the agreement, treatment is provided by law. Similarly, contract is an agreement between two or more parties to do or not to do something that can be implemented according to the law. 

Contract out is a tool of New Public Management (NPM). It is an important tool to reduce government expenditure and build a smarter government. Service delivery is on the rise, as the government's financial position is not good, the market is faster and simpler than the bureaucracy and it is the most attractive way to provide services and goods to the people. 

The main function of the government is to provide services to the people, not to hire unwanted employees and the contract system has become better as the market or private sector is better and faster than the government. Nepal has also been adopting contracting out system under the cost reduction system. The process is simple and easy. It has become very attractive in recent times as it gives priority to the outside rather than within the organization. 

Scope of Contracting Out
  • Tax and accounting system
  • Supply and purchase
  • Computer programming
  • Training administration
  • Customer service
  • Transportation of goods and services
  • Salary, facilities and compensation plan
  • Salary report
  • Internal security, gardener, courier, sanitation, maintenance etc. 

Benefits of Contract Out
  • Helps to reduce monopolistic power of the government.
  • Cost saving and gain working efficiency.
  • New technology can be introduced and learnt. The client also introduces new technology.
  • It makes easier to sell cheaply due to cash flow.

Challenges of Contracting Out
  • Quality cannot be maintained due to poor quality control. There may be compromise in quality.
  • Long process.
  • Can remove the strategic direction of the organization.
  • Loyalty to the organization decreases.
  • There can be two types of problems when making a monopoly contract. For example, service providers tend to reduce cost by reducing quality and become monopolistic because there is not much choice.
  • They work together, increase the cost by carteling.

Process of Contracting Out
  • The service is to be done by oneself, whether it is done jointly or from outside.
  • Choose the sector to be given.
  • Contract can be given on the based of nature and availability of service.
  • Needs and demand of services are assessed by users.
  • Agree and contract with the service provider.
  • Supply quality and quantity of goods and services according to price.
  • Government should look after Equity and technical parts.
  • There should be virtuous and non-corrupt behavior.

Necessary Content to be included in Contract Document
  • Service should be measured.
  • Specify the value of service.
  • Change in mechanism for high level needs.
  • To see the arrangement of change and mechanism of service.
  • State the mechanism in case of terminating the agreement.
  • Fix the level of results to be served.
  • Must have complete details about the service.
  • There should be flexibility according to the change.
  • Mention who and when according to contract.
  • The amendment aspect of the service standard should also be mentioned.
  • There should be a mechanism to monitor the quality of service.

Contract Management

The concept of contract management was started since 2001 and is still growing in importance. Contract management have been even made for office cleaning, gardener's work, machine maintenance and maintenance work. There is more emphasis on cost cutting than the means of serving the people.

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Reinventing Government: Concept, Achievement and Features of Reinventing Government

Concept / Introduction

In the early 1990s, when American governments were plagued by a series of shortcomings, some innovative and exemplary institutions emerged outside the public sector. Those organizations were fast, decentralized, up-to-date and work-oriented. They were also flexible and adaptable (able to adapt to new changes). They also used competitive, customer-oriented and non-staffed mechanisms to get the job done. 

Versalia, California, etc. had a clear impact on this entrepreneurship. The product of these things began to be applied in the public sector as a Reinventing Government. As this method and procedure leads to annual budget lapse, it also eliminates the need to spend budget money anyway at the end of the year and encourages managers to save budget. This budget money is ours and the feeling of spending it like this was awakened.

Budget system related to expenditure control was implemented. At the same time, with the change in the environment, the management has started to provide the facility to change. The line item budget system was removed and administrators were given the right to spend where required. The saved budget amount was also given the right to be spent next year, even in new priorities. Many such examples (Versalia, California) began to be found in the USA and ideas regarding Reinventing developed.

Reflecting on such things, after various studies, researches and investigations in 1992, the scholarly authors Osborne and Gaebler published a practical book with the idea that Reinventing should be done. According to these writers, the government can still do better than the market system and the government or the bureaucracy is neither necessary nor efficient, so the government (administration) must be Reinventing.

The book contains time-relevant chapters and introduces it as an American Perestroika. Other chapters include Reinventing Government as Anticipatory Government, Catalytical Government, Community-owned Government, Competitive Government, Customer-driven Government, Enterprising Government, Mission -driven Government, Decentralized Government, Result-oriented Government, Market-oriented Government etc.

10 points of Reinventing Government
  1. Entrepreneurial government will also implement and encourage competition among service providers.
  2. To bring the powers of government to the people or to empower the people. Empower rather than serve.
  3. Performance should not be input -oriented but result - oriented i.e. result should be good.
  4. Entrepreneurial government should move from process oriented administration to its mission.
  5. Entrepreneurial government meets the needs of customers and not bureaucracy. Therefore, with the choice, the public was called customer instead of client.
  6. Providing service before arising any problems.
  7. Entrepreneurial government should focus on earning rather than spending.
  8. They decentralized authority; Embrace simple management and team work system.
  9. In the process of providing services and facilities to the people, the market mechanism has been promoted rather than the bureaucracy. This is an attempt to bring change in the market.
  10. The government will play a catalytic role among the private, public and voluntary organizations in the society to solve the problems of the people's community. 

These 10 principles are an inseparable collective concept. The authors seem to have the idea that they do something even if they do not solve many problems.

Achievements / Features of Reinventing Government
  • Expenditure controlled budget system has been implemented.
  • The management has provided the facility to change with the change in the environment.
  • Line item budget system was removed and administrators were given the right to spend where required.
  • The saved budget amount was carried towards next year and given right to be spent on new priorities.

Some Examples for Reinventing Government
  • America has the worst public school even the world is so developed.
  • Courts and prisons are overcrowded.
  • Formerly worth doing or proud states and cities have actually gone bankrupt. In addition, millions of employees were laid off and billions of budget deficits or those states started running deficit budgets.
  • Accused persons / criminals started walking openly.
  • Very good and enterprising people do not want to come into government service. According to a survey conducted in the late 1980s, only 5% of people want to come into government service.
  • Thousands of Americans are homeless.
  • Millions of American children do not have health insurance, meaning they are deprived of health care.

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Business Process Re-engineering (BPR): Concept | Business Process Reengineering in Public Sector

Introduction of Business Process Re-engineering (BPR)

Business Process Re-engineering (BPR) is the process / method of emphasizing the improvement of the working processes of any organization. This is a revolutionary process. This process forgets the previous process and start from zero. The goal of business process re-engineering (BPR) is to dramatically increase or change efficiency, effectiveness and quality. It seeks holistic change within the organization. Changes are sought in each structure. BPR is not a continuous improvement, it is a revolutionary change. To restructure the organization's processes, activities, related systems and organizational structures through BPR in order to dramatically improve the work process. The BPR method is to forget the whole process of today and start a new process. There are four reasons why BPR is needed:
  • Financial performance
  • External competition
  • Declining market share
  • New opportunities created in the market, etc.

Business process re-engineering (BPR) does not mean down sizing, mechanization, restructuring, new technology, reorganization, etc. BPR is the testing and modification of the five major components of an organization. These include;
  • Testing and changing strategies
  • Testing and changing processes
  • Testing and changing technology
  • Testing and changing organizations
  • Testing and changing culture, and so on. 

This concept of business process re-engineering (BPR) originally came from the private sector. Re-engineering, a 1993 book by Michael Hammer and James Champy, brought this idea to the force. According to the book, BPR is a process of fundamentally redesigning its business processes and revolutionizing its structure in order to dramatically change the way an organization performs. As in TQM, it incorporates customer control systems and culture and information systems strategies into the BPR process. TQM adopts small improvement processes but BPR improves and changes the whole process.

BPR Process: - BPR goes through the following five specific stages:
Business Process Re-engineering

  • Define the goals and objectives of the BPR Process.
  • Start the learning process with customers, employees and non-competitors and with new technologies.
  • See the future today, to start the necessary new process.
  • Planning will be done on the basis of projections and gaps in the existing process.
  • Implementing appropriate solutions. 

Business Process Re-engineering (BPR) in Public Sector
  • BPR is more challenging to implement in the public sector than in the private sector.
  • It seeks change and coordination between the lines of every authority of the bureaucracy.
  • The more revolutionary change is sought in the government sector, the greater the risk, the more radical change, the more opposition.
  • The US General Accounting Office has developed a guideline for the evaluation of BPR, in which nine issues are identified and placed in the following three major areas. 
Section 1:
  1. Has the organization really re-evaluated its mission, fundamental and strategic goals?
  2. Has the organization identified the performance problem and set the criteria for its improvement?
  3. Has the organization really done re-engineering? 

Section 2:
  1. Is this re-engineering process properly organized?
  2. Has BPR's project team analyzed the intended targeting process and developed possible alternatives based on it?
  3. Has the team implementing BPR prepared a healthy business case to implement the new process?

Section 3:
  1. Has this organization followed the overall implementation plan?
  2. Have the organization's chief executives addressed change management issues?
  3. Did the new process achieve the expected results?

In the early stages, more than half of the Re-engineering (BPR) projects failed. So, there was a lot of discussion about the key to its success, and after 24 months of research into 150 BPR implemented companies, it was discovered that BPR could be implemented if the following things were done:
  • Commitment of top management (strong / strong consistent engagement)
  • Strategic affiliation (organization strategy and direction)
  • Pressurized business case for change (with measurable purpose)
  • With a clearly defined method (including future formatting)
  • Effective change management (addresses cultural transformation
  • Line ownership
  • Re-engineering group structure (all necessary groups including those with knowledge)

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Government: Roles and Functions of Government

Concept of Government

The government is the body that rules independently through the state system to fulfill the wishes of the people within the specified territory. The government is the main mechanism or representative of the sovereign state and is the body that exercises the executive power of the state in accordance with the law. Similarly, the government is the legal entity or body responsible for mobilizing the state, protecting and promoting it, and developing and expanding it in all respects. 

In short, the government is the statutory body established by the people to govern the country. It is guided by the method and system of government. Its main function is to develop the country and provide services to the people. 

According to Prof. Garner's words, "Government is the mechanism by which the general policies of the state are determined, the general affairs are regulated and the general interest is promoted. In the absence of a government, the population will be disorganized, unorganized, anarchic and it will not be possible to take any collective action. ” 

Functions of Government

The main task of the government is to ensure the living standards of the people as the government does the following:
  • Maintenance of peace, security and law and order
  • Function of health and quality environment
  • Community and social security
  • Arrangement of quality education and transportation
  • Supply of essential goods and services
  • Maintenance of national integrity and unity
  • Public policy formulation, implementation and evaluation
  • Addressing national level planning issue and program formulation, implementation and evaluation
  • Development of infrastructure of development
  • Development of water resources, tourism and agricultural sectors
  • Urban planning and welfare
  • Technology and methodological development and research work
  • Functions that cannot be operated and handled by non-government and private sector
  • Maintenance of minimum quality of goods and services 

Due to the above arrangements, the role of the government became even stronger. In particular, if the private sector is to make good progress in the world market, it should be able to provide the following inputs: - to provide the best knowledge and skilled workers, to do more valuable research, to provide the cheapest capital possible, to form the best foundations and policies. 

Roles of Government

1. In the Context of Development:
  • Strategic role
  • Protector
  • Facilitator
  • Regulatory
  • Promoter
  • Investigator
  • Evaluator and Monitor
  • Coordinator
  • Negotiator
  • Resource mobilize
  • Planner
  • Partner etc.

2. According to Anderson, 
  • Providing diverse economic infrastructure
  • Make avail public goods and services
  • Resolve and adjust the differences / conflicts / conflicts in the pluralistic society or between the groups
  • Ensuring and maintaining competition
  • Protection and Conservation of natural resources
  • Ensuring public access to existing public goods and services in the economy
  • Stabilization of economy

3. According to Osborne and Gaebler,
  • Anticipatory Government
  • Catalytical Government
  • Community-owned Government
  • Customer-driven Government
  • Competitive Government
  • Decentralized Government
  • Enterprising Government
  • Mission-driver Government
  • Market-oriented Government
  • Result-oriented Government, etc.

4. Plan Specified
  • Maintenance of peace, security and fair justice in the country
  • Improvement of quality of goods and services
  • Formulation of plan, policy and programs
  • Protection and promotion of human rights
  • Social activities such as poverty alleviation, inclusive development, women's development, social empowerment, upliftment of backward castes, etc.
  • Creation of competitive environment
  • Practice of local autonomy
  • Policy and action initiatives to maintain social justice and regional balance
  • Expansion of industry and trade, etc.

5. Unforgotten Roles of Government while Governing
  • Promotion of national interest in which sovereignty, integrity, protection of national identity, national honor and pride are intact
  • Guarantee of constitutional essence including democratic and democratic system, constitutional supremacy, civil rights, human rights, etc.
  • Peace and stability
  • Poverty alleviation 
  • Ensuring rule of law
  • Emphasis on good governance
  • Inclusion, social justice and development
  • Development of economic, social and physical infrastructure
  • Effective delivery of public services
  • Rural and urban development
  • Strengthening and development of international relations
  • Values ​​and principles guided by the constitution

6. In the context of changing environment of the world
  • New approach and role
  • Globalization, economic liberalization and privatization
  • Decentralization and localization
  • Use of science and technology and information technology
  • Carriers and catalysts of change
  • Private sector and civil society etc.

In conclusion, Government is an alternative to failure in other areas. Government efforts alone may not be enough for economic and social upliftment, but the government must create a strong presence and a conducive environment. For the public, the reality of government is bureaucracy. Administration is also called permanent government. Therefore, even if the market is very powerful, the government has to intervene from time to time because the market can fail at any time. In any case, the government is the government, that is, the last weapon is the government.
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New Public Management : Meaning and concept (NPM)

Meaning and Concept of New Public Management (NPM)

New public management (NPM) is the managerial process in which administrative activities are led to improve the administrative ability to make the function of the government or the state as successful and significant as in the management of the private sector. In this, efforts have been made to increase administrative efficiency, effectiveness and efficiency by introducing good managerial aspects invented and developed in the private sector in public administration and to make managerial transformation. In this sense, NPM is the practice of using management principles, models and tools to make the role of the state effective and meaningful. The NPM focuses more on outcomes than on processes, on accountability rather than on irresponsibility, and on management rather than administration. At the same time, the NPM believes that the traditional shortcomings in the administration should be removed and transformed into a competitive, efficient, effective and result-oriented management. 

In fact, NPM has been conceptually developed to meet and manage the challenges posed by globalization, economic liberalization, privatization, increasing international competition and rapid changes in technology in the late 1980's and early 1990's. It encourages the adoption of the good aspects developed by the private sector in the public sector as well as helps to make public administration / management efficient, productive, effective and accountable. It is also able to achieve qualitative improvement in the flow of public services. NPM also adopts flexible, effective and useful and market-oriented policies.

NPM concept has led to a wide-ranging change in the role of government as well as following the good aspects of private sector management, emphasizing the relationship between government and civil society. Apart from NPM, it is also known as New Managerialism or Managerialism or New Taylorism, Entrepreneurial government, Market-based Public Administration etc. 

Reasons for Development of New Public Management (NPM)

1. Aggression and Criticism in the Public Sector

There are too much criticism and aggression on the size, scope and methods of government and bureaucracy in the 1980s and 1990s. At the same time, many hopes and demands were made from this system. In addition, the world's most prominent critics of the government or the public sector were the head of government. For example, Margaret Thatcher ruled the United Kingdom in 1979 and Ronald Reagan ruled the United States in 1980. They were the ones who were the most criticized for their administrative actions. The most frequently criticized topics are: 
  • The impact on the state along with the large size of the government 
  • Expansion of scope of government and its impact
  • The traditional procedures of the government and the bureaucracy. 

2. Emerging Economic Theories

Some principles were established financially. The government becomes the ultimate obstacle to national economic growth, prosperity, progress and independence. Only a limited government can work for the welfare of the people and the market system was much better than the bureaucracy. With this belief, the new public management has been directed for governance based on the famous principles related to the economic sector like Public Choice Theory and Principle Agent Theory. 

3. Globalization and Competitiveness

The rapid development in the private sector through globalization and economic liberalization have made compulsion to transform public administration into a New Public Management in terms of capacity building, making it competitive and people-oriented in the administrative sector. The public sector must be as efficient, competitive and effective as the private sector for the good economy. The efficient operation of the government sector can also make the private sector more effective. These two are interdependent with each other. Similarly, due to expansion of the functional role of the government, the development of new public management concept had taken place. 

Features of New Public Management (NPM)
  1. Fast and Quick Government: NPM replaces the large and multi-purpose bureaucracy with a fast and quick government.
  2. Achievement and Results Oriented: NPM is a management system that emphasizes achievement and results rather than process.
  3. Under NPM, a mechanism based on market economy is promoted for the flow of services or availability of goods by the public sector.
  4. Cooperation between public sector and private sector is an important feature of NPM. Emphasis is placed on the government to play a coordinating and facilitating role by making the private sector more active.
  5. There is maximum use of information technology to make the public sector management effective.
  6. The development of NPM has changed the values of public sector. It emphasizes institutional economy, efficiency and effectiveness.
  7. NPM guarantees the right of consumers to make their own choice while using goods and services.
  8. NPM ensures personal and institutional accountability.
  9. NPM provides flexibility as per the needs of public sector management. 

Limitations of New Public Management (NPM)
  • Repetition of traditional principles
  • Limitations of public choice theory
  • Problems of ethics and accountability
  • The problem of politicization
  • Difficulty in applying market principles 

Uses and Practices of New Public Management (NPM)
  • Its use varies from country to country.
  • The use of NPM is very low in Japan.
  • Partial use in China.
  • Relations between Japan and China have a hierarchy-based strong culture, whether official or personal.
  • Due to differ from policy execution, it is partially used in Australia.
  • However, the use of NPM is increasing with the modern global change. 

What should be done to align the administration of Nepal with the concept of NPM?
  • Clarify the areas of work to be done by the government.
  • Arrangements will be made to receive public services from the lower unit.
  • Make the administration small, efficient and empowered.
  • Make development programs based on program budget.
  • Control unnecessary and distribution oriented expenditure.
  • Provide ICT based online services.
  • Provide business related training to the service providers.
  • Increase the physical, technical and economic capacity institutionally.
  • Make employees to study and research new topics.
  • Effectiveness in administrative work will be increased by involving the private sector as a partner in good and achievable work.
  • Follow the best practices around the world.
  • Implement performance based incentive system.
  • Increase the participation of citizens in service delivery and development work.
  • Commercialize the bureaucracy instead of politicizing it.
  • NPM is a powerful means of connecting the government, the private sector and the general public. It is effective in providing services through it. 

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