Outsourcing Process Analysis Outsourcing of Administrative Function Public to Private Report Style Essay

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Outsourcing Process Analysis

Outsourcing Weapons Registration in West Australia

Licensing Services Division

West Australia Police

Encl.

This paper will examine the practicality and mechanics of outsourcing the weapons registration of the West Australia. In the paper, we will examine models of managing the outsourcing of public services in West Australia that have been implemented. The proposed outsourcing scheme to implement the 2009 firearms registration process in West Australia is a hybrid plan and is based upon private sources and public agencies in West Australia that have shared their experiences in this endeavor. Problems experienced by the Victorian Police and their outsourcing of clerical issues will be considered as a counterpoint in the examination of outsourcing in West Australia. The issues experienced in Victoria have been largely similar to the problems experienced in West Australia and the solutions are similar as well. Also, West Australia can continue to learn from Victoria because many of these problems are still in existence and have not been fully solved.

Background

In an era of shrinking public budgets and recession, outsourcing is becoming the reality for local and state governments. This process started in Victoria in 1994 when the newly elected Liberal Victorian Government committed itself to the reform of public administration primarily by subjecting it to market pressures. At that time, an Outsourcing and Contract Management Unit was created in the Department of Treasury and Finance. It issued contracting guidelines to assist public agencies who closely followed the NSW 1993 guidelines and included industry and regional stakeholders in the outsourcing process (Abelson 2004, 3).

Similarly, in West Australia, the 2009 process has been spurred not only by market pressures, but also by inconsistency of service. After a review by Auditor General Colin Murphy, it was found that although WA Police procedures for assessing the applications for firearm licences were sound, there were still problems in the monitoring of licence holders. A particular problem was whether licence holders continued to meet the conditions for firearm ownership after their licences were issued. The concern was that persons that should not have licenses would continue to hold them. The problem was two-fold, firstly that unauthorized persons were getting the licences to begin with and that these mistakes were not being eliminated later on. It was in this context that the move was initiated to re-engineer the licensing service starting in mid November 2009. From that point on, the applications began to outsourced to the Australia Post with firearms checks being carried out by firearms dealers . From that point on, all licensing decisions were centralised to make sure that they were recorded properly and that the paperwork was consistent (Cox 2009).

Introduction

In this white paper, the author is adopting a similar, but more strident application of the 1993 Victoria guidelines to the West Australia situation. By implementing the suggestions of the FTA, Australia Post and other stakeholders, the paper suggests a full application of market principles to realize the economies and efficiency of the private sector in the processing of firearms registrations.

Definition of Outsourcing

In 1994, the Victorian Government introduced compulsory competitive tendering (outsourcing) as a requirement of the Local Government Act. This legislation required all of the local councils to submit least 50 per cent of their operating budget to market testing within five years of the passage of the act (Abelson 2004, 6). This paper will define outsourcing as the competitive tendering of at least 50% of the goods and services of a local government to outside contractors or other government agencies based upon merit and cost effectiveness. While West Australia situation may not be solved by a "50% solution, " it is a place to start.

Section 1 The Context

There has been a move to outsource the Victoria firearms registry because of problems The FTA says that the integrity and accuracy of the Victoria's firearms registry has been severely compromised due to incompetence and is really in need of urgent reform. The FTA claims that a series of serious incidents illustrate the infrastructural problems with the Victoria registry that is now administered by the Victoria Police. The FTA brought this to the attention of the offices of Premier John Brumby and the Police Minister in early 2009. These include unauthorized disclosures of information and the lengthy processing of paperwork. Essentially, the FTA is concerned that the police need to concentrate on police work and not clerical work, hence the push for outsourcing (Firearm Traders Association 2009).

While 2009 has been a watershed year in the move to outsource the firearm registration process in West Australia, it has certainly not been the beginning of the problems. Unfortunately, it is apparent that we have learned little and are now simply repeating the experiences of the 1990s. A short examination of this period is necessary. At Port Arthur, Tasmania in April 1996, 35 people were killed by criminals wielding semi-automatic firearms. In response to the rampage, the Commonwealth, States and Territories agreed to one national Australian gun control strategy in May 1996.

To support this effort the Western Australian Parliament enacted amendments to the Firearms Act 1973 and initiated a 'Buy Back' scheme that paid compensation to persons surrendering firearms from October 1996 to September 1997. A review of firearm management and control procedures in the wake the 'Buy Back' revealed that the Western Australia Police Service (WAPS) was unable to demonstrate that all licensed holders of restricted and prohibited firearms had been examined for eligibility in concert with the 1996 requirements. Just as in 2009, it was found that the WAPS firearms registration process suffered from clerical errors and overspending (West Australia Police 2000).

2. Process Outline

An important outside stakeholder in process of outsourcing in WA is the FTA. It will be their job to connect with the Police Licensing Services (PLS) to conduct firearms licensing. The PLS is responsible for the issuance of licences, the renewal of licences, the accreditation of handgun target shooting ranges, the licensing of firearm dealers, the provision of support to operational policing the monitoring of licence holders, the issuance of firearm permits, firearm registration and the accreditation of handgun target shooting clubs (West Australia Police 2011). Logically, proper outsourcing allows a governmental agency or other organization to focus on its core mission and to outsource issue that are not as important. Those tasks that are part of the "paperwork" process such as licence renewal and issue, the issuance of firearm permits,. These sources can be immediately outsourced and the other tasks can be examined to see if paperwork components can also be out-sourced. This should hit overhead costs hard, just as the McIvor article advocates (McIvor, 2011, 30).

3. The Challenges and Complexity for Management

Most of us have heard the promise that one size fits all. In the real world, this is rarely the case and we spend a lot of time discerning shades of grey due to the lack of black and white. A multi-faceted analysis of the firearms licensing problem as spoken about above reveals that most of the problems were to do with clerking and paperwork. In other words, what we essentially have is an "in and out" problem so to speak where information goes in, actions are done along the way and licences are issued at the end of the process. The biggest challenges and complexity in management will firstly involve admitting that the WA government could not do everything in the firearm licensing process. Secondly, it will be to eliminate opportunism along the way that might scuttle the process if potential vendors are able to beat the system and "cook" things in their direction so that they win bids unfairly (ibid, 32).

Risk management is a key issue in any outsourcing scheme, hence the move to keep it confined to clerical functions. In addition, proper contract formation will prevent much of the liability problems (Hood, J. And Young 2003, 1).

In addition, there will be difficulties in coordinating new relationships vis-a-vis vendors and government agencies, particularly in measuring vendor performance (ibid). Ultimately, the market driven nature of outsourcing must be the determinant of performance. Certainly, one of the main motivations for outsourcing services is not just performance, but also cost containment. If the market is not allowed to rule and the lowest bidder to have won out, then the process will have failed.

In short, the firearms control efforts in Australia in general and in WA in particular are working. For instance in the year 2000, there were 259,540 licensed firearms in WA in 1999. In the following five years to 2004, the number of high-powered firearms decreased from 20,803 to 7,159 in 2004 and the number of handguns were more than halved from 25, 031 in the 1999 to 10, 263 in 2004 (Auditor General for Western Australia 2004, 44).

4. Resource Implications

Logistics is a key factor in almost any situation, especially finances. As mentioned above, it represents about 50% of the outsourcing issue. We addressed performance already…[continue]

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