Professional Documents
Culture Documents
1. Cost cutting
A business may find it cost-effective to outsource work to a third party which specializes in
it by contracting a private vendor which has the ability to lower the cost of providing services
and also protects the city from labor and equipment cost increases through the whole duration
of the contract.
2. Better quality of service
Most of the time tasks are outsourced to vendors who specialize in their field. The outsourced
vendors also have specific equipment and technical expertise, most of the times better than the
ones at the outsourcing organization. Effectively the tasks can be completed faster and with
better quality output.
3. Increase accountability for service delivery
By contracting, the city can thus hold the provider accountable for the poor service delivery
through the usage of contract renewal, performance bonds and lateness penalties. Also, rebidding
a contract gives the city the opportunity to make a comparison between the performances of
different contractors because it enables a competition between them. Another plus would be
given by the fact that performance bonds and lateness penalties protect cities from the effects of
poor performance.
Disadvantages of outsourcing: