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Industry Report:

State & Local Outsourcing Industry Report, 2006-2011  (Jan 2007)

After a period of difficulty from 2003 to early 2005 it appears that the state and local outsourcing market may finally be poised to heat up.

Description

Over the past twelve months notable outsourcing initiatives in Virginia, Texas, Indiana, and San Diego appear to have set the stage to reinvigorate growth in this market. The subject of outsourcing remains a red button political issue. However, politically savvy leaders shaping and orchestrating the latest round of outsourcing deals have found ways to strike a balance between cost savings for the government and government jobs, to effectively neutralize opponents who have successfully derailed initiatives in the past. Vendors should be aware that winning the political game is not cheap and will directly impact their contracts within these contract engagements. When pursuing these outsourcing deals, vendors should anticipate that the procurement process will be long, time consuming, and costly, and that despite a sound business case and compelling solution to meet government needs, the political environment will remain somewhat “sensitive.”

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