Evaluation of Transportation Organization Outsourcing: Decision Making Criteria for Outsourcing Opportunities

Available Documents
Project Report

Primary Investigator
Robert Eger
University of Wisconsin-Milwaukee
Center for Urban Transportation Studies
P.O. Box 413
Milwaukee, WI 53201
(414) 229 5010
(414) 229 5021 fax

Project Objective
This study will focus on criteria serving four concepts: Establishment of policy goals and objectives, Information and analysis systems, Development of plans and programs, and sound practices in program delivery. Study results will inform transportation officials of criteria to consider when evaluating outsourcing opportunities, concerns to be evaluated, and other factors that might influence a decision. The proposed research will develop four to six case studies documenting outsourcing in private sector transportation organizations. The private sector transportation organizations are those organizations that are engaged in work similar to public sector organizations. A model for developing the case studies will be formulated, completed, and documented; with the resulting questionnaire used to conduct the remaining case studies. The case studies will be centered on site interviews, written materials including reports, and web-resources. The case studies allow for the development of a comprehensive representation of the role of outsourcing in the specific organization thereby permitting a comparative to current public agency practice. The comparative differences and similarities will be documented and identified.

Project Abstract
Privatization of public-provided services continues to be a fiercely debated issue. Many members of state legislatures, county commissions, and city councils have embraced the premise that the private sector can deliver most public services better, faster, and more cheaply than public employees. Many businesses and public agencies have concluded that most support services are not “core” and, therefore are candidates for outsourcing. Outsourcing “candidates’ are commonly perceived as groups that provide services to internal customers, such as information technology or equipment management organizations. Traditionally, outsourcing opportunities are a function of process-based services rather than a function-based service. Therefore, when services are perceived as process-based and not as core services, the outsourcing option is brought into managerial consideration. Confounding the outsourcing decision is the suggestion that many internal services providers have fallen well short of meeting their customers’ expectations. Many internal service providers are characterized as large and expensive, important but ineffective and are great sources of frustration.

Outsourcing challenges facing the public sector have similarities to private sector challenges. The listing of similarities between public and private characteristics and processes provide a basis of exchange that centers on a cooperative exploration of ideas and principles.

Task Descriptions

  1. Task 1. Review literature
  2. Task 2. Develop template for case studies
  3. Task 3. Prototype case study
  4. Task 4. Select other case studies
  5. Task 5. Synthesis of Industry Case Studies
  6. Task 6. Student survey of existing DOT practices
  7. Task 7. Synthesis of case studies

Relationship to Other Research Projects
Not related to existing MRUTC research projects.

Technology Transfer Activities
Project report will be posted MRUTC website and distributed to organizations. Preliminary results will be presented at the 4th National Transportation Asset Management Workshop in September 2001.

Potential Benefits of the Project
This project will present opportunities that states may use to implement or choose not to implement private sector outsourcing. It is expected that this research will produce both strategies for implementation and actual case studies. The report will follow the National Cooperative Highway Research Program 20-24(11) project framework. The report will be geared to the needs of organizations in the process of implementing or improving asset management programs. The decision making criteria developed in the study will help to inform transportation officials of criteria to consider when evaluating outsourcing, concerns to be evaluated, and other factors that might influence a decisions.

Project Information

  • Milestones, Dates: Project Start Date: 6/20/01, Final report by 3/31/02
  • Yearly Budget: $91,915, Total Budget: $91,915
  • Student Involvement: Student Hourly Employees will design and conduct a survey of state DOT practices.
  • TRB Keywords: Maintenance Management, Contracting, Privatization, Asset Management, Planning
  • Primary Subject: Outsourcing
  • Modal Orientation: All, primarily highways
  • Project Number 01-03