The OECD PDG Handbook on Contracting Out Government Functions and Services in Post-Conflict and Fragile Situations has been published and is available as a free download from the OECD website.
To view the Handbook online, please click here. Print copies of the publication may be requested by e-mailing the PDG Advisory Unit.
 This handbook is for field practitioners and government policy makers in countries that are either emerging from conflict or are otherwise considered to be fragile. Its aim is to help policy makers and practitioners make more informed choices about the types of contracting that are best suited to their country. It is a tool to help policy makers assess whether contracting out might be a possible way forward – either temporarily or over a longer period of time – for delivering a core service (such as basic education, healthcare, water and sanitation) or a government function (such as managing public finances and human resources). It is also designed to be accessible to field practitioners who are neither procurement nor legal specialists. When developing the handbook, one of our key concerns was to provide sensible guidance adaptable to various situations so that users can make informed (short to medium-term) choices while still considering longer-term sectoral and capacity strategies. The handbook illustrates these points with the aid of case studies
ranging from Afghanistan to Haiti and Liberia.
This handbook intends to provide a roadmap for weighing the pros and cons of contracting out and for navigating the process once the decision to contract out has been taken. It should be clearly stated at the outset that the handbook does not advocate the benefits of contracting out in fragile states. Practitioners should use it to inform their own decisions about whether to contract out or not, and to optimise the options available to them once the decision to contract out has been taken.
The handbook fits within an already extensive literature. Some of this touches upon contracting out specific functions or services in fragile states, and includes country case studies on the contracting out of essential services, practical manuals (sometimes focused on a specific sector such as health), technical guidance on procurement processes in fragile contexts, and legal guidance and templates on contractual and legal arrangements. The handbook contains a short selection of useful reference material at the end of each chapter.
The handbook has five main chapters. It starts by defining what contracting out is and the political, technical and capacity risks and constraints that exist in fragile states (Chapters 1, 2 and 3). The rest of the handbook (Chapters 4 and 5) helps users navigate through the procurement and contracting process once the decision to contract out a specific function or service has been made.
Chapter 1 begins by defining some overarching principles of contracting out, explores the reasons why fragile or post-conflict states might decide to externalise some of their government functions or services, and discusses what these might be. This chapter also provides an overview of the types of contracts that might be used depending on the context and the service being contracted out. It finally addresses different payment mechanisms and modalities.
Chapter 2 examines the interests and incentives of the various stakeholders and the risks that may arise in contracting. It discusses what to consider when deciding whether to contract out or not; proposes how to assess the (positive and negative) incentives of various actors (government, suppliers, recipients, donors) in the process of contracting out; and outlines the risks associated with the contracting out of specific government functions and services in fragile situations.
Chapter 3 looks at how to assess a state’s capacity for contracting out: at the levels of the enabling environment, the organisation and the individual. It describes what steps to take if a state is found to be too weak to even oversee contracting out, and how to use contracting out as a way of building state capacity to reassume service delivery in the longer term.
Chapter 4 outlines the steps involved once the decision to contract out has been taken. It offers users an overview of the process and provides guidance on what is needed to plan and implement a credible procurement in order to contract services from the private sector (both for-profit and non-profit organisations). It also offers insights into how to develop a procurement plan, the types of contract that are available and how to handle a possible transition to full partner country management services.
Chapter 5 provides guidance on the legal aspects of contractual arrangements for the provision of government functions or services. It guides users through the approaches that governments can use to structure, negotiate and enforce contracts, taking into account the country’s context and legal or institutional capacity. This section also provides legal insights into how to draft and monitor contracts.
Should you have questions about the content of the OECD PDG Handbook on Contracting Out Government Functions and Services in Post-Conflict and Fragile Situations, please contact Ms. Bathylle Missika.
To request a print copy of the Handbook, please write Mr. James Eberlein.
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