Abstract: Government agencies increasingly contract with third-sector organisations (TSOs), perceiving that they are cost-effective, flexible, and expert in service-delivery. Yet these funders also state that contracting-out creates financial, service and reputational risks. The approaches government agencies take to procurement in light of these risks include close scrutiny and monitoring of TSOs' compliance with rules and processes, thus limiting these organisations' autonomy and effectiveness, and increasing contracting costs. A second approach is to develop collaborative/partnering relationships with TSOs and focus on their overall performance. Yet TSOs argue that instances of this performance-based approach are rare. This exploratory New Zealand-based research analysed social services agencies, finding that different procurement approaches were driven by organisational structure and service, leadership and the success or failure of prior contracting. Recognising alternative procurement approaches is useful for developing strategic responses to contracting relationships.
To cite this article: Cordery, Carolyn. 'Procurement Approaches': Why are there differences among government agencies in how they contract for services from third-sector organisations? [online]. Third Sector Review, Vol. 18, No. 2, 2012: 75-97.
[cited 29 Apr 17].