WHEN PUBLIC SERVICES GO PRIVATE: THE ANSWER? OR AN ANSWER?

The experiences of Minneapolis and St. Paul, Minnesota, city governments in contracting for private-sector services is described. The concept of having governments "govern" and not be producers of service led to establishment of a nonprofit organization to foster purchase of services in the Twin Cities area. St. Paul's experience with contracting services leads the author to a number of conclusions: It is possible to contract successfully; it is difficult for the private sector to produce service unless it is already engaged in that activity; skills necessary to perform certain municipal functions are not necessarily available in the private sector; it can be difficult to write specifications for contracting a service; there will inevitably be political, labor, business and psychological barriers to contracting for services already being produced by a municipality. Despite their proximity, St. Paul and Minneapolis have differing policies on provision of services. Along with private sector providers, it is possible that contracts can be made with nonprofit or neighborhood organizations. Another option is purchase and/or sale of services involving other units of government. In summary, contracting for services can be a potent tool but to be successful it must be done carefully.