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Outsourcing Management Functions for the Acquisition of Federal Facilities (Free Executive Summary)

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Free Executive Summary

ISBN: 978-0-309-07267-0, 152 pages, 6 x 9, paperback (2000)

This executive summary plus thousands more available at www.nap.edu.

Outsourcing Management Functions for the

Acquisition of Federal Facilities

Committee on Outsourcing Design and

Construction-Related Management Services for Federal

Facilities, Board on Infrastructure and the Constructed

Environment, National Research Council

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COMMITTEE ON OUTSOURCING DESIGN CONTRUCTION-￾ RELATED

MANAGEMENT SERVICES FOR FEDERAL FACILITIES￾￾HENRY L. MICHEL, Chair,

Parson Brinckerhoff, New York, New York￾￾JOSEPH A. AHEARN, CH2M Hill, Greenwood

Village, Colorado￾￾A. WAYNE COLLINS, Arizona Department of Transportation,

Phoenix￾￾JOHN D. DONAHUE, Harvard University, Cambridge, Massachusetts￾￾LLOYD

A. DUSCHA, Consulting Engineer, Reston, Virginia￾￾G. BRIAN ESTES, Consulting

Engineer, Williamsburg, Virginia￾￾MARK C. FRIEDLANDER, Schiff, Harden, and Waite,

Chicago, Illinois￾￾HENRY J. HATCH, American Society of Civil Engineers, Reston,

Virginia￾￾STEPHEN C. MITCHELL, Lester B. Knight and Associates, Inc., Chicago,

Illinois￾￾KARLA SCHIKORE, Consultant, Petaluma, California￾￾E. SARAH SLAUGHTER,

MOCA, Inc., Newton, Massachusetts￾￾LUIS M. TORMENTA, The LIRO Group, New York,

New York￾￾RICHARD L. TUCKER, University of Texas at Austin￾￾NORBERT W. YOUNG,

JR., McGraw-Hill Companies, New York, New York￾￾Staff￾￾RICHARD G. LITTLE,

Director, Board on Infrastructure and the Constructed Environment￾￾LYNDA L. STANLEY,

Study Director￾￾JOHN A. WALEWSKI, Project Officer￾￾LORI J. VASQUEZ, Administrative

Associate￾￾NICOLE E. LONGSHORE, Project Assistant

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Outsourcing Management Functions for the Acquisition of Federal Facilities

http://books.nap.edu/catalog/10012.html

1

Executive Summary

In this study outsourcing is defined as the organizational practice of con￾tracting for services from an external entity while retaining control over assets

and oversight of the services being outsourced. In the 1980s, a number of factors

led to a renewed interest in outsourcing. For private sector organizations, outsourcing

was identified as a strategic component of business process reengineering—an

effort to streamline an organization and increase its profitability. In the public

sector, growing concern about the federal budget deficit, the continuing long￾term fiscal crisis of some large cities, and other factors accelerated the use of

privatization1 measures (including outsourcing for services) as a means of

increasing the efficiency of government.

The literature on business management has been focused on the reengineering

of business processes in the context of the financial, management, time, and staff￾ing constraints of private enterprise. The underlying premises of business process

reengineering are: (1) the essential areas of expertise, or core competencies, of an

organization should be limited to a few activities that are central to its current

focus and future profitability, or bottom line; and (2) because managerial time

and resources are limited, they should be concentrated on the organization’s core

competencies. Additional functions can be retained within the organization, or

in-house, to keep competitors from learning, taking over, bypassing, or eroding

the organization’s core business expertise. Routine or noncore elements of the

business can be contracted out, or outsourced, to external entities that specialize

in those services.

1Privatization has been defined as any process aimed at shifting functions and responsibilities, in

whole or in part, from the government to the private sector.