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Contracting and the Performance Assessment Tool: Politicization or Sound Management?

2010; SPAEF; Volume: 34; Issue: 3 Linguagem: Inglês

2327-4433

Jessica N. Terman, Kaifeng Yang,

Accounting and Organizational Management

INTRODUCTION Contracting with private organizations for the production of goods and services continues to be a powerful trend in public management (Brown et al. 2006; Ingraham et al. 2004; Kettl 1993; Kettl 2000). The responsibilities of many government employees have shifted from delivering public services to monitoring the vendors that deliver those services (Brown and Potowski 2004; Frederickson and Frederickson 2007). However, these public employees and their organizations are often still subject to and accountable for the performance measures and benchmarks for the administration of those services (Frederickson and Frederickson 2007). This increased use of contractors often described in the governance literature (Frederickson and Frederickson 2007; Kettl 2005) and demand for increased accountability through performance measured has revealed the difficultly of measuring contractor performance. This dilemma underscored by the public management and governance movements focuses on how to reconcile the extensive use of contracting out while also focusing on performance measurement in government. The coexistence of these two issues is problematic because as performance measurement is continually used to encourage accountability in government (Radin 2006), many measures have not reflected the presence of contractors and other third parties (Frederickson and Frederickson 2007; Radin 2006). The research at hand discusses the intersection at which contracting out and performance management meet at the federal level and asks the question: How does the use of contractors and procurement procedures affect the performance of federal agencies? The Performance Assessment Rating Tool (PART) was the federal performance measurement system introduced by President George W. Bush, who focused a great deal on linking agency performance to budgeting and accountability mechanisms (Dull 2006; Frederickson and Frederickson 2007). Much of the literature regarding the PART suggests that it is a political tool of the executive branch (Dull 2006; Greitens and Joaquin 2008; Radin 2006), and highly ineffective as a performance budgeting tool (Posner et al. 2007). Nonetheless, the PART, unlike GPRA and other efforts to hold government agencies accountable for their performance, attempts to include the performance of third parties in its measures (Frederickson and Frederickson 2007). This is an important shift because it attempts to practically bridge 3rd party governance with performance measurement. Because of this purported inclusion of third parties in performance measures, the PART may be the best tool, at the federal level, with which to measure the way that contracting-out affects agency performance. We attempt to examine whether and how the PART scores under the Bush Administration were influenced by the prevalence of private contracting and procurement, contractor competition and the use of performance-based contracts. Through the lens of contracting and PART scores, we aim to test whether the scores were completely politicized or they actually took into account sound contracting management practices. The results will contribute to our understanding of how the third party governance may affect performance management in government (Frederickson and Frederickson 2007) and how to avoid performance measurement from becoming a politicized instrument (see Askim 2007; Halachmi 2004; Moynihan 2008). PERFORMANCE MEASUREMENT IN THE FEDERAL GOVERNMENT The Performance Assessment and Rating Tool In early 2002, the executive branch introduced PART as a method to evaluate program-level performance in the federal government. The Office of Management and Budget (OMB) began rating federal programs in 2003. Only about 20% of programs were assessed or reassessed each year, with the commitment by the executive branch that, by 2008, almost all programs would have been given a PART rating (OMB 2004a). …