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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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4

Decision Framework



This chapter provides a decision framework for federal agencies considering outsourcing management functions for facility acquisitions. Based on the constraints of inherently governmental functions, the framework incorporates the committee's two-step threshold for identifying ownership functions, which should be performed by in-house staff, and management functions, which can be considered for outsourcing. The decision framework is not intended to generate definitive recommendations for which management functions may or may not be outsourced or in what combination. It is a tool to assist decision makers in analyzing their organizational strengths and weaknesses, assessing risk in specific areas based on the stature and sensitivity of a project, and, at a fundamental level, questioning whether or not a management function can best be performed by inhouse staff or by an external organization.

The outsourcing of management functions for planning, design, and construction activities by federal agencies is a strategic decision that should be considered in the context of an agency's long-term mission. Federal agencies should analyze the relationship of outsourcing decisions to the accomplishment of their missions before outsourcing management functions for planning, design, or construction activities. Outsourcing for services and functions should be integrated into an overall strategy to achieve the agency's mission, to manage resources, and to achieve best value or best performance for the resources expended. Outsourcing of management functions should not be implemented solely as a short-term expedient to limit spending or to reduce in-house personnel.

The outsourcing decision framework comprises the following five steps:

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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  • Can the function legally be outsourced, or is it an inherently governmental function?

  • Is the function an ownership or management function?

  • Is it wise to outsource—do the characteristics of the project require that this function be managed by agency personnel?

  • Is there a need for or advantage to outsourcing—does the agency have the capabilities to perform the management function effectively?

  • If outsourcing is not precluded by other factors, is it an appropriate way to proceed?

These steps are illustrated in Figure 4-1.

LEGALITY OF OUTSOURCING

The first step in the decision process is to identify the program, project, or service being considered for outsourcing and its associated management functions. If the function is determined to be an inherently governmental function, as defined in the FAIR Act of 1998 and FAR Section 7.5, then federal employees must perform it. The function could be outsourced to another federal agency but not to a private-sector entity. Organization, staff capability, resources, schedule, and other issues must still be addressed as outlined below.

NATURE OF FUNCTION

An agency is ultimately responsible for the performance of the program, service, or function to be outsourced and, thus, must consider a number of factors before making a decision to outsource it to another federal agency, outsource it to a private contractor, or manage it in house. At this point, the agency should begin to apply the two-step threshold test for determining whether a particular management function should be performed by in-house staff or an external organization. From this point on, federal agencies that provide management functions and private-sector organizations are both considered external organizations. In other words, the decision-making process for outsourcing to a public organization or a private organization is the same.

The first step is to determine whether the function to be outsourced is an ownership function (i.e., one that involves decision making on important issues) or a management function (i.e., one that involves ministerial or information-related services) as described in Chapter 3. In the committee's opinion, if it is an ownership function, it should not be outsourced. Agencies should guard against losing control of their ownership functions and should retain the core capabilities necessary to carry out ownership responsibilities associated with facility acquisitions in their role(s) as owners, users, or providers of facilities.

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Image: jpg
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FIGURE 4-1 Decision framework for outsourcing management functions.

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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WISDOM OF OUTSOURCING

The second step in the threshold test is to consider whether outsourcing a management function might unduly compromise one or more ownership functions, such as restricting the agency's ability to make decisions or compromising its possession of confidential information. A number of project-related management functions should be retained by smart owners and smart buyers (perhaps assisted by contract staff or specialized consultants). These functions relate primarily to strategic issues, such as mission, scope, priority, and budget. In the committee's opinion, if outsourcing the management function would unduly compromise the agency's ownership functions, then the function should not be outsourced.

The following questions should be asked in reaching a decision about outsourcing a management function:

  • Will decisions or tasks related to the function have extraordinary/critical results for the success of the project?

  • Is the management function one that requires significant fiduciary responsibility that can have an impact on the progress of the project if it is mismanaged?

  • If outsourced, will the management function bind the agency to either a monetary commitment or a contract without protecting the public interest?

  • Will decisions and tasks related to the function have effects beyond the scope of the project (e.g., environmental, public safety, or national security effects)?

  • Will decisions and tasks related to the function infringe on mandates by government or requirements by law?

  • If outsourced, will the management function place unjustified and uncontrollable authority in the hands of one private provider over another?

  • If outsourced, will the management function require the external organization to make the service delivery sufficiently proprietary to the point that the agency would be committed solely to that organization for future services?

Although an affirmative answer to any one of these questions may not preclude a decision to outsource, each question represents an opportunity for the agency to retain or relinquish control of a critical management function. Because the ultimate responsibility for the program, project, or service remains with the agency, affirmative responses should be carefully and individually considered.

NEED FOR OR ADVANTAGE OF OUTSOURCING

If a management function is deemed to be one that does not unduly compromise the agency's ownership functions, the next step in the decision process is for

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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the agency to determine if there is a need for or advantage to outsourcing. The answer will be partly based on the agency's role as an owner, user, or provider of facilities and its core competencies. A key factor in this determination will be the availability of qualified staff to perform the management function and/or the time available to successfully accomplish the function in house.

Perhaps the most fundamental consideration is whether an agency has inhouse professional or technical skills available to manage planning, design, or construction activities. If the activity will not be a continuing one, there would be little point to hiring and training staff to handle a one-time special need or peak workload. If special study skills, or even data systems, are required for the management function, it may not be feasible or cost effective to acquire the skills or technology and train in-house staff to perform the function. Outsourcing in these situations can be an effective or advantageous way of handling unique workloads for which it would be impractical to retain or train in-house staff or purchase equipment.

In a related situation, an agency may have a modicum of in-house competencies but not enough qualified people to handle peak or shifting workloads effectively at a given time. Or an agency may have the required competencies in some field offices but not in others. In these situations, it may be advantageous for the agency to outsource some of its functions to meet project delivery deadlines.

The preceding discussion and the analysis of the federal experience in Chapter 2 demonstrate that the decision to outsource a management function is seldom clear cut. Agencies should consider if outsourcing management functions is the most appropriate way to achieve best value or best performance in terms of the long-term achievement of the agency's mission.

OUTSOURCING DECISION

In determining whether a management function should be the responsibility of in-house staff or outsourced to an external organization, the agency should consider the following factors, any one of which might be key, depending on the agency and its operational circumstances. Every situation is unique and has its own combination of resources, technology, organizational structure, budget constraints, and, perhaps, physical location.

Availability and Quality of Contract Services

  • Are the management services readily available in other government agencies or in the marketplace? What do their performance records show?

  • Should the management function remain under the direct control of the agency to avoid giving the service provider an unfair advantage over competitors for other functions or services in the project development cycle?

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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  • Is the management function one that, by its nature, will not allow for open, discretionary review by agency staff?

An agency should first determine if the necessary management services are available from other federal agencies or in the private sector at the location where they are required. If not, outsourcing to an external organization may not be an option. “Where there is little competition in the private sector prior to privatization, a viable bidding process may not take place such that the saving anticipated or the quality improvement desired may not take place” (Seidenstadt, 1999). The agency should determine, however, if the services are not available at all or are simply not available temporarily because of current peak activity in the economy. The agency should also determine whether the management function is a one-time project assignment or a continuing function for which it would be worth the effort of an external organization to establish a new presence based on the likelihood of subsequent contracts. The marketplace normally responds to a long-term need if other factors show that outsourcing would be appropriate.

Cost Effectiveness

  • Will this management function be performed often enough within the agency that obtaining the specific expertise and associated efficiency in house would result in higher quality or be more cost effective than outsourcing the function?

  • Will oversight by government staff to ensure cost effectiveness and acceptable quality be so extensive and expensive that management of the function by in-house staff would be more cost effective?

If either an external organization or in-house staff could feasibly manage the given function, cost effectiveness should be a major consideration. Cost effectiveness can be determined by a comparative cost analysis of agency costs and those of other federal agencies or private-sector firms. A “major national study suggests that the cost of in-house service delivery is frequently underestimated by as much as 30 percent. At the same time, the cost of buying services from a private vendor is often underestimated owing to a failure to account for such government costs as contract administration and contract monitoring” (Seidenstadt, 1999). The most difficult part of this analysis is ensuring that the cost proposals are truly equivalent for purposes of comparison. Typically, private-sector firms and public agencies use different accounting procedures for determining overhead costs, personnel costs, and other costs. Therefore, in making cost comparisons, overhead and other costs must somehow be displayed in equivalent terms. The agency costs of preparing the contract packages (e.g., specifications, Request for Proposals, review costs, etc.), as well as agency costs for administering the final contract, should be considered part of the contract costs.

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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In the committee's opinion, the savings to the agency by outsourcing the function should only be measured in “hard,” actual cash-flow savings earned by moving the function outside the agency.

In calculating potential savings through staff reductions, the agency should include the costs of employee termination, which may be substantial and can result in strong negative community pressures. In-house staff represent a significant investment in time and training that should be accounted for. Agencies should carefully consider an action that results in a direct loss of experienced, trained staff in favor of relatively less experienced contract personnel. However, if existing staff can be reassigned to similar work or to fill other vacancies, or if they may actually be hired by the external organization, the impact on the agency may be minimal.

Timeliness

  • Would it take more time to procure the management function from an external organization than for in-house staff to handle it?

It takes time to prepare and review contract specifications and proposals, analyze those proposals, interview proposers, and negotiate a contract with an external organization. In some cases, urgency may necessitate that the management function be assigned to in-house staff. If in-house staff has limited time, the agency should consider having in-house staff handle urgent projects and outsourcing the management of less time-sensitive projects. If an external organization has fully qualified personnel available and established procedures and/or equipment and can offer prompt service, outsourcing may be an appropriate decision.

Risk Management

  • Is the management function so critical to the project that the project will fail if a failure goes undetected for an extended period of time?

  • If the management function is outsourced on a constant, long-term basis, will a skill vacuum be created in the agency that would jeopardize its ability to conduct future oversight responsibilities?

  • Will the performance of the management function by an external organization increase the overall costs because of liability concerns or third-party fiduciary requirements?

Management functions, by definition, control project accomplishment. For a federal agency, oversight of an external organization managing a project is less direct than oversight of the project by in-house staff. Some projects may be so critical to the performance of an agency's mission that agency responsibility and

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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accountability virtually mandate in-house management. Facilities built in support of ongoing defense initiatives or that involve critical security or political risks may be in this category. A decision to retain a management function in house for reasons of mission-criticality should be accompanied by a clear statement of the critical aspects of the project that require in-house management control and the reasons an external organization could not reasonably meet those critical requirements.

Risk is defined as exposure to the possibility of injury or loss. Special considerations may preclude the outsourcing of certain functions (e.g., those that involve sensitive national security operations, facilities, or products or the retention of corporate memory of experienced personnel). For example, recovery from the bomb blast in the World Trade Center was greatly accelerated by the resident knowledge of the agency facilities staff for that building (Marchese, 1993). In considering outsourcing management functions, an agency should first identify special considerations and the reasons some functions should be managed by inhouse staff.

The objective of risk management is to minimize the probability or magnitude of undesired consequences without incurring excessive costs (Moavenzadeh, 1997). The potential liability and risk management issues of any contract function should be examined closely. The external organization is an additional agent involved in an agency's overall performance and will not be as directly controlled as the agency's in-house staff, thus increasing potential liability exposure. The proper bundling of risk-management features in a turnkey project, however, may reduce risk for an agency. The risk-management aspect of outsourcing should be included in any contract arrangement.

RESPONSIBILITIES-AND-DELIVERABLES MATRIX

Once a decision has been made to outsource some or all of the management functions for a facility acquisition, an agency should clearly define the roles and responsibilities of all of the entities involved. The committee recommends that federal agencies establish a responsibilities-and-deliverables 1 matrix to help eliminate overlapping responsibilities, provide accountability, and ensure that, as problems arise, solutions are effectively managed. The matrix will vary from project to project, depending on the management functions outsourced and the type of contract used. Figure 4-2 is an example of this type of matrix.


1Deliverables are any measurable, tangible, verifiable outcome, result, or item that must be produced to complete a project or part of a project (PMI, 1996).
Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Image: jpg
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FIGURE 4-2 Example of a responsibilities-and-deliverables matrix.


Note:  P = primary responsibility
A = approve (signing of approval)
C = concurrence
R = reviews (no response required)
S = support (uses own resources)
Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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PERFORMANCE MEASURES FOR EVALUATING
OUTSOURCING DECISIONS

One component of the committee's statement of task was to identify measures to determine performance outcomes for outsourced management functions for facility acquisition programs (as opposed to projects). A key element of organizational decision making is measuring the effectiveness of those decisions, both qualitatively and quantitatively. The Government Performance and Results Act of 1993, which applies to all executive agencies, requires that they develop measures to determine the effectiveness of their programs and activities. These measures are normally derived from the goals and objectives of the agency's mission.

According to Independent Project Analysis, Inc., a firm of international project management specialists, effective performance measures should be: (1) related to bottom-line performance (however defined by the owner); (2) measurable and readily available; and (3) serve a clear purpose (Hess, 1997). A single measure rarely, if ever, tells the whole story of a program because individual project performance involves not only schedule or cost but also management factors and how they interrelate. One of the owner's responsibilities is to define measures that provide a detailed enough picture of program performance to enable meaningful intervention on the part of the owner or manager. Ideally, an analysis of the performance measures will enable the owner to identify which aspects of the outsourcing strategy are working well and which are not.

When management functions for facility acquisitions are outsourced, the principal measures of effectiveness of the entire program and of individual projects should relate to cost, schedule, and safety of the projects, as well as to the functionality and overall quality of the acquired facilities. Figure 4-3 is an example of a simple set of performance measures for individual projects comparing actual costs to estimated costs, actual schedules to estimated schedules, and absolute costs to the costs of similar projects.

In an earlier NRC study of performance measures for infrastructure systems, measures for these systems were grouped into categories of reliability, effectiveness, and cost (NRC, 1995). A system that reliably delivers an acceptable level of desired services at reasonable cost would be judged to be performing well. A similar framework using appropriate measures could be used for evaluating programs with outsourced management functions. For example, stated objectives of an outsourcing program could be to maintain existing project delivery schedules or not to exceed fixed-cost baselines by more than 5 per cent. These types of measures could assist an agency in analyzing the performance of projects for office buildings separately from projects for housing, industrial, or high-tech research facilities. The performance measures would be based on project delivery times and fixed costs, respectively.

However, measures for any performance-based objectives could be developed. These could include measures related to relationships between the agency

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Image: jpg
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FIGURE 4-3 Simple measures of project performance. Source: Hess, 1997.


and its external organizations, for example, measures of knowledge transfer, or measures of personnel turnover. Once measures have been developed, agencies should regularly monitor and evaluate their outsourcing efforts to determine if they are meeting established objectives and identify the factors that are key to their success or failure.

Baselines and Benchmarks

If baseline levels of service have already been developed or can be developed empirically, comparing the measures and determining how well outsourcing meets the basic level of expectation should be straightforward. The committee recognizes that some federal agencies may not have baseline data on current or past performance relevant to facility programs. If no baseline exists, one should be developed for effective performance measurement.

Figure 4-4 shows how performance measures can be used to evaluate the performance of a project in comparison to the performance of the agency's entire program. If projects are categorized by their use of in-house staff or external organizations, relatively simple comparisons could indicate how the outsourced projects are performing in comparison to a baseline of government-provided services.

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Image: jpg
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FIGURE 4-4 Project performance measured against agency baselines (for illustration purposes only).

Individual performance measures should be developed by the agencies that will use them and should not be prescribed by higher levels of government. Although it is entirely appropriate that operational guidance requiring the use of performance measures be promulgated government-wide (e.g., Government Performance and Results Act), and that the characteristics to be measured be addressed, the parties responsible for the provision of a service are in the best position to determine what constitutes good performance (NRC, 1995). An agency that decides to outsource management functions for planning, design, and construction services should be prepared to develop and apply meaningful performance measures to determine if the agency is meeting its stewardship responsibilities.

INTERAGENCY COOPERATION

Federal agencies involved in facilities acquisition, whether as owners, users, and/or providers, operate in a dynamic environment. Missions are being reevaluated, business processes are being reengineered, staffs are being downsized, and procurement processes are being modified as part of government-wide efforts to improve critical areas of performance, such as quality, cost, delivery time, and

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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customer service. Interagency cooperation and coordination can contribute to these efforts by identifying processes and procedures that have been shown to be efficient and cost effective and implementing them. Sharing lessons learned through networking, either face-to-face or electronically (e.g., via the Internet), can be an effective method of identifying best practices for facility acquisition and for outsourcing management functions. By sharing experiences, agencies can adapt successful practices to their situation and avoid practices that have been unsuccessful. If outsourcing of management functions by federal agencies becomes commonplace, consideration should be given to the creation of a governmentwide database of performance information.

SUMMARY

Chapter 4 provides a decision framework for federal agencies considering outsourcing management functions for facility acquisitions. Based on the constraints of inherently governmental functions, the framework incorporates the committee's two-step threshold test for identifying ownership functions, which should be performed by in-house staff, and management functions, which can be considered for outsourcing. An agency should first determine whether a function is inherently governmental or one that can legally be outsourced. The next step is to determine if the function is an ownership function that involves decision making on important issues or a management function that involves ministerial tasks. If it is an ownership function, it should not be outsourced.

For management functions, the next step in the decision process is to determine whether there is a need for or advantage to outsourcing. The key factors to be considered are the agency's role as owner, user, or provider of facilities, its core competencies, and the availability of in-house staff to perform the function. The last step in the decision process is to determine if outsourcing is an appropriate way to proceed. Factors in this decision will include the availability and quality of contract services, cost effectiveness, timeliness, and risk.

Once a decision has been made to outsource some or all of the management functions for facility acquisition, an agency should clearly define the roles and responsibilities of all entities involved. The committee recommends that federal agencies establish a responsibilities-and-deliverables matrix to help eliminate overlapping responsibilities, provide accountability, and ensure that solutions are managed effectively as problems arise.

A key element of organizational decision making is measuring the effectiveness of those decisions, both qualitatively and quantitatively. When management functions for facility acquisition are outsourced, the principal measures of effectiveness of the entire program and of individual projects should relate to cost, schedule, and safety of the projects, as well as the functionality and overall quality of the acquired facilities.

Individual performance measures should be developed by the agencies

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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that will use them. An agency that decides to outsource management functions for planning, design, and construction services should be prepared to develop and apply meaningful, quantifiable performance metrics to determine if the agency is meeting its stewardship responsibilities.

Federal agencies involved in facility acquisitions operate in a dynamic environment. Sharing lessons learned through networking can be an effective method of identifying best practices for facility acquisition and for outsourcing management functions.

FINDINGS AND RECOMMENDATIONS

Finding. The outsourcing of management functions for planning, design, and construction-related services by federal agencies is a strategic decision that should be considered in the context of an agency's long-term mission.

Finding. Performance measures are necessary to assess the success of any outsourcing effort.

Recommendation. A federal agency should analyze the relationship of outsourcing decisions to the accomplishment of its mission before outsourcing management functions for planning, design, or construction services. Outsourcing for services and functions should be integrated into an overall strategy for achieving the agency's mission, managing resources, and obtaining best value or best performance for the resources expended. Outsourcing of management functions should not be used solely as a short-term expedient to limit spending or reduce the number of in-house personnel.

Recommendation. Once a decision has been made to outsource some or all management functions, a responsibilities-and-deliverables matrix should be established to help eliminate overlapping responsibilities, provide accountability and ensure that, as problems arise, solutions are managed effectively.

Recommendation. Agencies that outsource management functions for planning, design, and construction services should regularly evaluate the effectiveness of the outsourcing effort in relation to accomplishment of the agency's mission.

Recommendation. Agencies should establish performance measures to assess accomplishments relative to the objectives established for the outsourcing effort and, at a minimum, address cost, schedule, and quality parameters.

Recommendation. Interagency coordination, cooperation, collaboration, networking, and training should be increased to encourage the use of best practices and improve life-cycle cost effectiveness in the delivery of federal facilities.

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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REFERENCES

Hess, R. 1997. Establishing Performance Measures for Outsourcing Projects. Presentation by Ronald Hess, Independent Project Analysis, to the Committee on Outsourcing of Design and Construction Management-Related Activities for Federal Facilities, National Research Council, Washington, D.C., September 22, 1997.

Marchese, M. 1993. World Trade Center Disaster. EPICCGRAM Fall 1993 (#3). New York: Emergency Preparedness for Industry and Commerce Council.

Moavenzadeh, F. 1997. Risk management. Construction Business Review 7(4): 5.

NRC (National Research Council). 1995. Measuring and Improving Infrastructure Performance. Board on Infrastructure and the Constructed Environment, National Research Council. Washington, D.C.: National Academy Press.

PMI (Project Management Institute). 1996. A Guide to the Project Management Body of Knowledge. Sylva, N.C.: PMI Communications.

Seidenstadt, P., ed. 1999. Contracting Out Government Services: Theory and Practice in the United States. Westport, Conn.: Praeger.

Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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Suggested Citation:"4 Decision Framework." National Research Council. 2000. Outsourcing Management Functions for the Acquisition of Federal Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10012.
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In this study outsourcing is defined as the organizational practice of contracting 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 privatization measures (including outsourcing for services) as a means of increasing the efficiency of government.

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