Press Statement on Best Sourcing - 70% of market tested functions outsourced

As at 31 Mar 07, the public sector has market-tested about 23% of its non-strategic functions since the start of the Best Sourcing initiative in 2004. 70% of these market-tested functions were subsequently outsourced to the private sector. The value of these contracts amounts to $2.1 billion. The remaining 30% of the non-strategic functions continued to be performed by public officers as the market test affirmed that it was the better value for money approach.

2. The Best Sourcing Initiative is about the public sector's continual efforts to remain focused on functions which can and should only be done by the public sector. It also instills fiscal discipline on functions performed by public sector.

3. Best Sourcing does not assume that outsourcing is the best outcome for non-strategic function being market tested. Rather, agencies decide for themselves whether to continue performing the function or to outsource it, depending on the bidders' responses to the market testing.

4. Thus far, common non-strategic functions that have been market tested include cleaning services, facilities management, IT as well as other support or operational functions. Some of those that have been outsourced or in-sourced recently after the market testing are highlighted in the Annex.

5. While Mr Teo Ming Kian, PS(Finance) is satisfied with the progress made thus far in Best Sourcing, he reminded public agencies to exercise due diligence in Best Sourcing:

"The public sector needs to continue to be prudent stewards of public monies. Best Sourcing is a good way of achieving the most cost-effective acquisition of public services, by extending the consideration of service providers for services that are traditionally done in-house to external providers. It is not simply an outsourcing exercise. To achieve value for money, all factors including non-monetary ones such as the quality of services delivered and the capability of the tenderer to fulfil the contract, are just as important in Best Sourcing."

MINISTRY OF FINANCE