Why It Never Works

What is contracting out?

Whether it is called contracting out, subcontracting out or outsourcing- each term has the same meaning- the use of private contractors and/or workers(other than the members of the bargaining unit who have traditionally done the work or should logically do the work). The most common practice would be a public employer contracting with a private sector employer to perform he work.

Most often the government draws up a detailed description of the work, publishes it and invites the companies to bid on a job by proposing a price for which the company will do the work. The government usually awards the contract to the company making the lowest bid. Contracting out is a SERIOUS THREAT to practice of having public employees provide public services. Basic public services are in the hands of private companies seeking to make a profit. This may mean reduced services for the public and substandard conditions for employees.


Services provided to the public suffer because the mandate of the private company is to maximize profits so the quality of the service will suffer.

  • The cost is higher – at the very least government continues to pay for administration of the contract and cost to monitor the contractor. Also private companies expenses will be higher as they must make a profit.
  • Less accountability – the public has no say on how to provide or change the service as the services performed are governed by the contract. The only way the government can make a contractor respond is to renegotiate.
  • Increased Costs – a contractor may offer a low price at first hoping the government will become dependent on the service-  once this happens they will increase the price.
  • Problems get the services needed through the contract – it is difficult to draw up contracts that ensure the government will get what it wants for the price it pays.
  • Failure to perform service – contractors may stop or slow down the work due to financial reasons which could leave the province or city without service.
  • Corruption – companies may engage in questionable practices to increase profit.
  • Poorer Services for the public – in the pursuit of maximizing profit they may result in decreased services and decreased quality.