Implementation Research on Contracting for Social Services Delivery: Testing Some Assumptions in a County Substance Abuse Services Program

By Mann, Everette E.; McMillin, J. Daniel et al. | Public Administration Quarterly, Winter 1995 | Go to article overview

Implementation Research on Contracting for Social Services Delivery: Testing Some Assumptions in a County Substance Abuse Services Program


Mann, Everette E., McMillin, J. Daniel, Rienzi, Beth, Eviston, Linda, Public Administration Quarterly


The delivery of social services by non-governmental agencies has been a part of public program relationships for most of the Twentieth Century. Moreover, its importance as an option for local government has increased sharply since the severe reductions of federal aid during the Reagan administration. Today the majority of publicly funded drug and alcohol abuse services is contracted out by local governments. After a review of the experience with "harnessing the private sector to solve social problem" Marc Bendrick (1984:140) wrote, "the most disappointing finding ... is the prevalence of unsubstantiated claims." A good deal has been published since then regarding this topic; however, there is still uncertainty regarding the advantages and disadvantages of contracting for such services and a lack of reliable principles and expectations.

The present study seeks to add some empirical experience to the on-going discussion of government contracting for social services and clarify expectations regarding social service delivery by local government and nonprofit contractors.

The authors have conducted a two-year study of drug and alcohol abuse services delivered by both a government clinic and contracting agencies in a large California county. They have taken a largely qualitative approach to assessing service output as well as quality of program management. The major purpose of this study was to test certain assumptions and assertions contained in recent writing about government contracting out.

During the past 20 years, contracting out to both business and nonprofits has been the fastest growing forms of social services delivery. An International City Management Association (ICMA) survey reported that 58% of the cities and counties studied contracted out all mental health services and 55.2% contracted out all drug and alcohol abuse services (Ferris and Graddy, 1986:336). For both kinds of services, only about 20% of the local governments surveyed produced the services with public employees and the balance (about 22%) used a combination of contracting out and direct government delivery (Ibid.). According to the survey, 61% of local governments' contracts for drug and alcohol services went to nonprofit organizations and 8.8% to private business (Ibid., 341). In the county studied, 70% of the public funded substance abuse treatment and prevention services were contracted out while 30% were directly delivered by a county clinic.

The search for principles with which to understand such contracting arrangements has lead to an often inconsistent variety of ideas.

LITERATURE REVIEW

Recent conservative political thought looms large over the landscape of government contracting. An early voice arguing for government to pay private contractors for public services was Peter Drucker (1989:61) who claims to have coined the term, "privatization." He stated its underlying philosophy in these terms: "Whatever non-government organizations can do better, or can do just as well, should not be done by government at all" (Ibid., 68). According to Drucker, such work should be done by competing outside contractors to government standards.

E.S. Savas (1982) articulated more in the way of a rationale for this point of view, the basic tenet of which was that a government monopoly cannot produce things efficiently or effectively. Savas argues that this is because a lack of market discipline and competition promotes waste and poor quality. However, the proposition that the private sector can necessarily produce public services at lower cost has been challenged by a number of researchers (e.g., DeHoog, 1984; Lipsky and Smith, 1989-90:637; Thayer, 1987; Donahue, 1989).

In current usage, "privatization" is an imprecise term. In addition to government contracting with private entities, in its purest form "privatization" is "load shedding" (Savas, 1982) wherein the government relinquishes its responsibility and transactions are made directly between vendors and recipients (Wood, 1992:496). …

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