Outsourcing in the public sector in the Czech Republic: case studies
Outsourcing in the public sector in the Czech Republic: case studies

Author(s): Juraj Nemec, Markéta Šumpíková
Subject(s): Public Administration, Labor relations, Accounting - Business Administration, Human Resources in Economy, Transport / Logistics
Published by: Masarykova univerzita nakladatelství
Keywords: outsourcing; Czech Republic; process; results;
Summary/Abstract: The relevant literature suggests that if, and only if, outsourcing is properly implemented, then it may, but might not, improve cost effectiveness and deliver the necessary quality. In this paper, we present two cases describing the processes and results of outsourcing by public sector bodies in the Czech Republic. Data are based on an in-depth audit delivered by students preparing their master’s degree theses under the supervision of one of authors of this paper. Compared to our previous in-depth audits in Slovakia, we did not find very visible cases of inefficiency connected with in-house versus outsourcing decisions. However, our data confirm that the core problematic service in our public administration conditions is transportation. The ‘habit’ of public bodies having company cars or even in-house drivers is usually a very expensive practice. If such cars and the time capacity of the drivers are underutilised, the costs of taxi services can actually be much cheaper. The data also show that even with only a few competing bidders, public organisations can receive very low-cost offers for cleaning and security services, much below the minimum costs of internal production. Suppliers can achieve this by ‘manipulating’ the labour costs or the costs of the quality of the delivered service.

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