Public services have traditionally been delivered through hierarchical government bureaucracies. But these days, that vertically integrated model is giving way to a horizontal approach involving a complex blend of federal, state and local government — along with private businesses, third-party contractors and non-profit institutions. In this new model, the role of government is transformed from direct service provider to leader and manager.
These networks are already a fixture at every level of government. Partnering is on the rise in Europe, including a number of public school systems that have hired private firms to build and maintain their facilities and infrastructure so educators can focus on education. In New Zealand, the country's entire highway infrastructure is designed, built and repaired by private firms. In the United States, federal service contracting has grown by nearly 20 percent over the last 10 years. Private contractors, for example, currently support the U.S. military with a wide range of ancillary services, freeing up active duty military personnel to focus on the
Political debate tends to focus on whether it’s "right" to replace government workers with third-party contractors, but in practical terms, the real issue is how to make third party government more effective. Many highly publicized contracting failures have been the direct result of government trying to use traditional hierarchical controls to manage a networked, horizontal service model. A new operating model requires a new and different approach.
Strategies for success
Public and private partnerships in the Netherlands
Tying partner payments to specific achievements and results helps keep everyone focused on the same objectives. Financial rewards and penalties can be linked to a wide range of performance goals, depending on the agency's priorities.
In the Netherlands, several local governments joined together to improve safety and reduce congestion on a dangerous secondary road near Den Bosch. The governments hired a private consortium to design, build and operate the new highway — with payments over the 18-year term of the contract tied directly to specific quality thresholds such as smoothness of the road and how much of the highway is fully available for use at any one time.
The project represents a new level of cooperation between the public and private sectors, requiring a significant mindshift. Responsibilities and risks are shared in a very different manner, which has led to entirely new ways of working.