While some local governments steer directly towards or away from contracting, others choose to contract for only a part of the service delivery and let the rest of the service delivery remain internally; a phenomenon called mixed service delivery or concurrent sourcing. Mixed service delivery has received increased attention within public management in recent years, and previous studies (Brown, Potoski and Van Slyke, 2015; Hefetz, Warner and Vigoda-Gadot, 2014; Puranam, Gulati and Bhattacharya, 2013) identify two synergies from using the mixed delivery mode: An efficiency synergy based on enhanced possibilities for benchmarking the public and private supplier against each other and a knowledge sharing synergy based on the differences in the two supplier’s competences and knowledge. However, much of the existing research on mixed service delivery include only technical services, such as water supply services, refuse collection, school cleaning, IT maintenance, and road maintenance. The dynamics and results for mixed service delivery may be different for social services (Van Slyke, 2003), such as the provision of nursing homes, the service examined here. It seems evident that the private suppliers play a crucial part in achieving the synergies of efficiency and knowledge sharing, but the private supplier’s role in mixed service delivery remains unclear in previous research. Furthermore, potential differences between for-profit and nonprofit suppliers may also exits. Increased knowledge on the supply side would be valuable for the suppliers but especially for the public organizations making and monitoring the contracting decisions. Through a case study, this paper examines the drivers and barriers to achieving the synergies of efficiency and knowledge sharing, as identified by private suppliers to the public sector. The data is multisource and consists of interviews with CEOs and facility managers from private organizations operating nursing homes in Denmark, information on the local governments’ they supply to, examples of tenders, news articles, and additional background information, which make room for triangulation. Both for-profit and nonprofit suppliers are included in the case study, and the suppliers run nursing homes with various supply arrangements. The results show several barriers impeding synergies between the public and private sector: First, the private suppliers argue that they do not always have the same access to resources from local government as the publicly run nursing homes have. Secondly, some of the private suppliers also identify shifting political coalitions and previous experience with contracting as factors that influence the willingness to cooperate with private suppliers. Further, the status of being a nonprofit supplier can be an advantage when contracting decisions are made. It is interesting that even though many of the reasons for choosing a mixed service delivery strategy stems from efficiency considerations, the private suppliers do not highlight efficiency advantages as their competitive strength; instead they claim to have a different set of competences that would benefit the public sector. Finally, it seems that a key driver for achieving knowledge sharing between the sectors is that tender material and contracts explicitly state knowledge sharing and innovations, not just price, as key priorities.
Working with the private sector: externalisation, contracting, public-private partnerships
Barriers_to_efficiency_and_knowledge_sharing_IRSPM.pdf 