In a continuing effort to reform and reivent the way public organizations do business, the outsourcing of services has become a popular tool, particularly as resource constraing limit options available to governments. All too often, the decision is made, for reasons of ideology or resource constraints, to outsource services without giving carefull consideration to the impact of privatization on the core missions of an agency, or whether privatization, in fact, offers real cost savings. Purchasing tools designed for traditional commodity pruchases are often grossly unsuited for making decisions on specialiazed technical services. This article suggests a process for the evaluation of an option to outsource laboratory services. It suggests that, prior to contracting or privatizing services, the concerned agency should evaluate: the impact on the agency's core mission ; the availability, stability, and reliability of private sector service providers; the relative costs of internal and external (public or private sector) sevice providers; the potential impact on regulatory enforcement; the ability to monitor the performance of external providers; potential conflicts of interest. Based on this model, ongoing internal evaluation of services offers public agencies management tools to obtain the best value for the taxpayer dollar, not only in terms of the raw cost per test, but also in managing the quality of the services

Public Administration Review PAR

July/August 2000 Volume 60 Number 4