Public Works & Municipal Services Director
St. Paul, Minnesota
If you think public works organizations don't need to compete, think again. More so now than ever before, every organization must do what it takes to close the gap that exists between the public and private sectors.
This "gap" could be considered a dual driver: It puts pressure on elected officials to find more efficient alternatives to current operations, and it attracts private sector competitors into the arena in increasing numbers. This trend is illustrated in the field of solid waste management, where it is estimated that over 60 percent of the waste in North America is now handled by the private sector. There is also a growing tendency for municipalities to turn to the private sector for solutions to public works problems.
Perceived or real, conventional political wisdom increasingly holds that private enterprise can deliver public works services better, faster, and cheaper than can the public sector. Unfortunately, recent EMA experience in assessing the performance of public works operations tends to support that view, disclosing average competitive gaps that exceed 30 percent.
Municipal government is under intensifying pressure to measure up to the performance standards of the private sector. Nowhere is this more true than in the area of public works, where aging infrastructure and limited budgets are forcing decision-makers to seek innovative solutions to growing problems.
There is an expanding base of experience in the utility industry that counters this trend and demonstrates that public operations can be competitive with the private sector while retaining the flexibility to respond to a range of community concerns and issues. In our experience, public works organizations have competitive gaps in the upper ranges, some more than 30 percent! By taking steps now to learn from and adopt the lessons of successful public utilities, public works can shrink this gap over the next 15 years to become equivalent to public utilities' competitive gap.
The O&M strategies that differentiate high-performance contract operators in the utility business are the same strategies that mark the difference between typical public works agencies and high-performance service providers:
Sandy Scott can be reached at (651) 639-5708 or at email@example.com.