Start Planning To Privatize Now

The worst time to begin evaluating your organization for privatization is after you've been tapped for the job. If you think the responsibility will fall to you eventually, start planning now. The most important thing is to know your operation, who does what, why they do it and how they do it.

Hal Steinberg, a former Office of Management and Budget official who has also been a partner at KPMG Peat-Marwick, suggests you ask the following questions before you start:

  • Is there agreement among Members of Congress, the agency and its customers that privatization is a viable option?
  • Are there legislative or regulatory barriers to privatization?
  • What aspects of your organization would be enhanced by privatization? Efficiency? Quality? Service delivery?
  • Is the private sector capable of doing the job you want it to do?
  • Will potential operators see sufficient economic return?
  • What will be the impact on unions and other governmental operations?
  • Can the requirements of your organization be defined with enough specificity to attract bidders?
  • Can the operation be adequately monitored if turned over to the private sector?
  • What is the cost of resuming responsibility for the operation if the private sector fails?

Once you feel comfortable with the answers to these questions, you'll need to develop a business plan. This is probably the most important step in the privatization process, Steinberg said. This is your sales pitch for potential funding sources and the blueprint for how the operation will be managed. It must define your priorities for operational and financial decisions as well.

In your business plan, you must address the following issues, as specifically as possible:

  • Who will be served and how, what services will be provided at what cost, how long before the operation is expected to break even, and how much revenue will be produced.
  • The participants involved. What will be the role of senior management, fiscal specialists, personnel specialists, technical experts and others?
  • The time period for all aspects of privatization, including raising capital, property acquisition, personnel transitions, service delivery and pilot program duration.

One of the most difficult aspects of privatization is dealing with people's reluctance to change the way they do business, says Theodora Watts. Watts spent a dozen years in senior positions at the Internal Revenue Service before she moved to the private sector last September.

"I think [some managers] can go a lot further with privatization than they're going. There's just such an entrenched way of doing business it is difficult to get people to change," Watts says. "If you look at what people have on their bookshelves you'll see volume after volume of nitty-gritty procedures. There's no emphasis on serving the customer. That's the culture."

Managers who have good ideas but are afraid they won't be heard by those with the power to implement them need to find someone to champion those ideas for them, says Watts, now a senior systems specialist with InfoPro Inc., a consulting firm based in Silver Spring, Md.

"You really need somebody who's going to carry the flag for you," she says.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

    Download
  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

    Download
  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

    Download
  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

    Download
  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security

    Download

When you download a report, your information may be shared with the underwriters of that document.