Contracting Out & Tendering

Question 1

what is tendering

Answer 1

competition between private organisations to provide a public service offered by the public sector
(interested stakeholders present projects, best option gets selected)

Question 2

what is contracting out

Answer 2

public sector selecting a private organisation to complete a public service

Question 3

What is the Make or Buy Principle?

Answer 3

The extent to which the public sector considers to make it in house of buy it from a private entity

Question 4

Theories based on Make or Buy Principle
TCE

Answer 4

the decision is determined by comparing costs of internal or external provisions

Question 5

Theories based on Make or Buy Principle
Principal Agent

Answer 5

controlled relation for successful contracting

Question 6

Theories based on Make or Buy Principle
Contestable Market

Answer 6

contracting out creates competition

Question 7

Principal - Agent Theory (5)

Answer 7

1. Conflict of interests
2. Extrinsic motivation
3. Self Serving
4. Institutional use of power
5. External Management

Question 8

Stewardship Theory (5)

Answer 8

1. interest alignment
2. congruence of interests
3. intrinsic motivation
4. personal use of power
5. Bounded Self regulation

Question 9

Options for provisions of services & goods (4)

Answer 9

1. Retain service in house
2. Contract out a private sector contractor
3. Contract out a voluntary sector provider
4. Mixed Economy

Question 10

What are Public Private Partnerships (4)

Answer 10

long term contracting out
- shared decision making and accountability
- goal coordination
- shared resources
- contractual and relational relationship