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Abstract: The provision of public service, which is traditional provided by the government institutions, through a private institution is prevalent in most developed and developing countries. Generally, most government institutions outsource the provision of public service and procure goods through a tender process. According to the new public management theory, outsourcing of traditionally government-provided services can result in major cost savings. However, in South Africa, evidence suggest that outsourcing and tendering present several challenges in the public sector institutions. In fact, South Africa loses between R25-R30 billion of the annual government procurement budget due to corruption associated with outsourcing and tendering. In this regard, the most common pathologies relating to outsourcing and tendering are collusive bidding practise, patronage, kickbacks, bribery and flouting of procurement legislation, regulations and policies. As a result, most public sector institutions are plunged into financial crisis and inefficiencies. Moreover, large amount of taxpayers’ money cannot be accounted for due to rent-seeking behaviour. In view of the arguments above, this paper discusses the various complexities linked with outsourcing and tendering in the South African public sector institutions. To this end, different scholarly articles, the official reports of the investigative institutions in South Africa were consulted. This paper concludes that the challenges presented by outsourcing and tendering in government institutions foreshadow a demise of the new public management theory. It is recommended that public sector institutions in South Africa need to consider building state capacity, introduce proper monitoring and evaluation systems in procurement and ameliorate governance and compliance with legal statutes, regulations as well as policies. Nevertheless, this could be achieved successfully through building capacity in the public sector institutions. Keywords: Contracting, corruption, outsourcing, procurement, tendering. |
