Management Contract

Like the service contract option discussed above, in a management contract, a private partner operates a publicly owned facility under contract with the sponsoring government. A Page 7 management contract is broader than a service contract; the private operator is responsible for all aspects of operations and maintenance as opposed to only certain functions. Private operation of a facility can result in improved service and efficiency, but this option is still on the public end of the spectrum as the private sector does not have a financial stake in the facility or service, but rather is merely providing it. There are dozens of water and sewage treatment plants in the U.S. that are operated on this basis, as well as hundreds of services and facilities in all parts of the public sector, from education to sanitation to public works. Some U.S. cities outsource their entire public works functions to private service companies. This type of service provision is limited more by the availability of a competitive set of service providers than by the imagination and leadership of government leaders.