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Draft Report

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

Chapter 2 –

Procuring Contracted TMC Services

Chapter Overview

The purpose of this chapter is to provide guidance to an agency considering outsourcing current and planned TMC operations and maintenance services to private contractors.  Based on an agency’s self-assessment of its goals and desired outcomes in correlation with TMC services, guidance in this chapter provides considerations on procurement options relevant to outsourcing these activities.  This self-assessment must be used to identify candidates for outsourcing for both current service areas that may not be performing optimally and future service areas that will be put into place as TMC functions grow and mature.  After identifying which services are applicable for outsourcing, agencies must identify TMC business model structures that facilitate their ability to deliver the desired TMC functions.  

This chapter will describe a variety of procurement methods and contractual models, including applicability of performance measures, incentives, and disincentives.  Because of the potential impacts of a public-to-private transition, there will also be a discussion of staffing, insurance, and indemnification issues. In making public agency actions and decisions, administrators must be cognizant of political and institutional influences that can influence outsourcing of TMC services, so these concepts are discussed as well.  The last section of this chapter provides strategies and evaluation criteria for contractor selection when outsourcing TMC services.

Procurement is the first step after making the decision to outsource TMC operations and maintenance services.  After the services have been put into in place, they must be both managed and evaluated to determine their effectiveness in achieving agency goals and objectives.  These concepts are discussed in the following chapters. The last two chapters synthesize previously discussed information with lessons learned and recommendations as well as a discussion of case studies that follow procurement models described in this chapter.

Because it is implemented for a variety of reasons, the decision to outsource TMC services must often be made several years in advance of an anticipated contract start in order to conform to agency fiscal planning requirements and procurement timeframes.  Outsourcing is a major decision that should be undertaken only when appropriate research has shown that it is the best means to satisfy the agency’s goals and objectives with regard to TMC operations and maintenance services.  If the procurement process is not set up appropriately, the management and evaluation of the contracted TMC services may be considerably more difficult.  

This research, which will be discussed in the following sections, can be broken down into detailed analyses of:

Operations research to define goals, desired return on investment, and operational capabilities;

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