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Draft Report

Procuring, Managing, and Evaluating the Performance of Contracted TMC Services

intelligent transportation systems management, toll collection, and signal and sign systems).  

Disadvantages to Outsourcing

The following are some of the perceived and potential disadvantages to outsourcing TMC services.

Lack of Available Qualified Contract Forces

If TMC service contracting is new to a geographic region, service contracts may need to allow for graduated start-up schedules that might not match agency needs.  In addition, an agency may have experienced poor contractor performance for some of the outsourced activities (such as latenight callouts).

Lack of Adequate In-House Staff To Oversee Contractor Staff

Outsourcing does not relieve agency staff from their responsibilities to actively manage the contractor’s work.  In today’s constrained fiscal environments many public agencies have assigned substantial workloads to existing staff.  These workloads may make the management/ oversight functions challenging.  

Potential Loss of In-House Expertise

Some agencies cite that outsourcing can create a void of experienced in-house staff to assist with related operations or during special events.  Assigning staff functions to an external agency can lead to a diminished career path for agency staff, and the salaries offered by the contractor may entice personnel away from the agency.


Some agencies believe that the costs provided by a private firm exceed the costs for the public sector to provide equivalent services.  In addition to the cost of services, the public agency has to account for the costs of administering and monitoring contracts.  

Union and Other Labor Considerations

Some union or labor rules may preclude the ability to outsource certain positions in a TMC.

Limits Innovation

At least one research study suggests that outsourcing limits innovation.   

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