More Public Sector Functions Best Sourced

Best Sourcing effort in the Public Sector continues to gather pace. As at October 2006, about 18% or 226 of its non-strategic functions were market-tested. Of these market-tested functions, 70% led to outsourcing of contracts worth $664.7 million at an annual operational cost savings of $34.6 million.

Best Sourcing is about choosing the most economic provider to do a function. The best provider is determined through market-testing, such as tender or quotations. If another provider can do the function more efficiently and effectively, it will be engaged to do so. If not, the public sector agency will continue to do the function in-house. Thus far, common functions that have been market tested by public agencies include cleaning services, facilities management, IT as well as other support or operational functions.

Best Sourcing is not about cost savings per se. Fundamentally, it is about allowing public agencies to focus more on their strategic functions. This greater focus and agility will help public agencies better meet the challenges Singapore faces.

Some of the projects outsourced are:

a) Agri-Food & Veterinary Authority of Singapore - Fishery Port Operations
b) Health Sciences Authority - Laboratory support
c) Ministry of Manpower - Call centre operation
d) People's Association (PA) - Maintenance and Cleaning Services
e) Singapore Police Force - Logistics

Details of these projects are at Annex A.

MINISTRY OF FINANCE