Government as General Contractor/ Chief Auditor?

[BigLawMonies]

Wanted to get the forum's opinion on an idea designed to capture market efficiencies lost in government bureaucracy while maintaining the services expected of government agencies.

Why do we not extend the contracting model gov't uses for things like building gov't offices/military purchases to other government services? The basic idea is that the government turns legislative mandates over to private actors based on competitive bids to achieve outcomes envisioned by the legislature and interpreted by the executive.

Advantages of this model:

1. Contracting for outcomes enables innovation absent in our over-regulated and calcified gov't agencies.

2. Creates an incentive for efficiency by the pressure of downward bidding; competition amongst contractors --> pressure for cost savings to the taxpayer

(opposite of leeching gov't agencies dedicated to keeping their budgets and their jobs no matter how useless, redundant, inefficient, etc).

3. Government employees would basically just audit...but you could even contract out frontline auditing and just audit the auditors through rivalrous reducdancy. A strong auditing system would be even more accountable against fraud than the p.o.s. agencies we have like the SSA.

see http://www.reason.com/news/show/122464.html

4. Mandatory cost-benefit analysis, transparency, and competitive bidding decreases corruption...


Can you guys help me out with more advantages of this model and maybe raise objections?

Some examples of changes under this model:

1. Privatization of the school system, vouchers for school choice, reimbursement of voucher conditioned on achievement of mandated outcomes (can be made detailed and holistic, not just test scores).

2. close county hospitals and contract out indigent care.

3. change medicare and state health insurance from fee for procedure to fee for outcome valuated on median cost for patient's presentation.

4. instead of Social Security we have mandatory contributions to various alternative retirement saving schemes that are minimally risk adverse

etc.

What do you think?