July 1, 1996
Outsourcing is one way, although not the only way, to increase efficiency. Outsourcing, or more generally, competition (whether public or private) provides cost visibility - customers begin to see what they pay for goods and services. It also can provide alternative sources, enhance flexibility, introduce better business practices, and take advantage of emerging technologies and innovations. Outsourcing and competition are sometimes considered something new and untested, as experiments. In fact, they are not. The public sector has relied on the private sector for years. Although it is hard to write contacts for something as risky as developing and manufacturing a major weapon system, the Department of Defense (DOD) has done it repeatedly. DOD has outsourced successfully functions as complex as acquisition, and as straightforward as laundry services. This is not uncharted territory. The purpose of this paper is to take a first look at what outsourcing opportunities exist and what types of cost savings are possible. To glean some insights into implementation, we look at how one naval technical center has outsourced various functions. We consulted several databases to quantify good candidates.