State and local governments use public money to procure a range of goods and services. To ensure that contracting decisions are in the public’s best interest, jurisdictions should have a routine practice embedded in their procurement process for performing a cost analysis. A cost analysis (sometimes called a cost-benefit analysis, among other terms) allows governmental entities to understand the potential risks, benefits, and costs associated with contracting. Too often, jurisdictions do not require or perform this type of analysis, which can increase the chance of signing a risky contract in an attempt to quickly solve a problem or privatizes a public function that is better performed by public sector staff.
ITPI has written an issue brief designed to provide frameworks for localities and states to create or improve their procurement cost analysis process. It can also provide advocates with an understanding of what these types of analyses should look like so they can intervene in proposed contracts to ensure procurement decisions meet the needs of their communities.
To learn more, read the full brief, Procurement Cost Analyses and the Decision to Contract.