Increasingly, when governments decide to contract out services, in-house units are also given the opportunity to bid for providing the service. It has brought competition to many jurisdictions where public services had long been the exclusive domain of public monopolies, but increasingly, private providers are crying foul, arguing that the playing field is often tilted against them in public-private competitions. For managed competition to be an effective tool to cut costs and increase efficiencies, an ample supply of private firms must be eager to bid against the public sector for the opportunity to deliver public services. This requires that the potential bidders be confident that the playing field will be level.
Governments often do a poor job of ensuring competitive neutrality.
While it may not be possible to have absolute equality in each area, governments should strive to get as close as possible. Currently, there are no real guidelines that lay out how governments should conduct fair public-private competitions. The following guidelines can assist governments in achieving a level playing field in managed competitions. Costing the Public-Sector Bid Bring in an objective third party to determine the department's true costs. Extend competition as completely as possible into the department.