Goodbye to Government

November 1996


Goodbye to Government:

Following are classic models for outsourcing government information technology, but in practice there are numerous variations on each. If these models were placed on a continuum with GOGO (government-owned, government-operated) on the left and wholesale privatization on the right, the trend in the federal government today would be moving from left to right.

  • GOGO. At ground zero, the government owns and operates all the IT equipment, staff and resources. This model is rapidly disappearing.
  • Outsourcing Partnership. In this arrangement, the government owns the hardware and software licenses, and handles the general management of the IT facility, but outsources the technical staff. This type of arrangement is on the rise.
  • Co-sourcing. A government agency partners with more than one private firm and draws skills and expertise. This can be useful in cases where one company has the contract and equipment, and another company has the talent.
  • GOCO. Under a GOCO (government-owned, contractor-operated) arrangement, the government owns the hardware and software, but relies on a vendor to operate the information technology infrastructure.
  • COCO. In a COCO (contractor-owned, contractor-operated) setup, the government outsources the IT work and the contractor takes it off-site to its own facility.
  • Privatization. This is the ultimate form of outsourcing because not only does the government farm out the IT infrastructure and data processing, it hands over the function as well. An example would be an agency that turns over its payroll processing to a contractor. A variation is in-place privatization, where private industry takes over the operation of a government facility and hires all the employees. A major problem with privatization is that the government depreciates inventory differently than private industry. Inevitably, there is controversy over how much the government's IT equipment is worth at takeover time.
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