Oversight: Safeguarding the State's Investments and Protecting Its Residents and Resources

Abstract

This paper seeks to understand state capacity to oversee private contractors through the lens of New Jersey state government. It was initially motivated by Governor Christie’s appointment in 2010 of a state commission tasked with investigating and recommending opportunities for further privatization of state government activities. Contracting out in the state of New Jersey, as in the U.S. in general, primarily takes the form of service delivery -- services are still publicly funded and government maintains decision-making power (Brudney, Fernandez, Ryu & Wright, 2004), but they are carried out by private sector actors.While the recent privatization effort has been highly ideologically and politically charged, the truth is that New Jersey state agencies have been relying on nonprofits and for-profit firms for the provision of taxpayer funded public services for some time, under both democratic and republican administrations. As New Jersey state government actively seeks to identify more services to privatize, it is critically important to understand how effectively the state oversees its private contractors. We analyze secondary source data such as laws, regulations, requests for proposals, executive orders, circulars, memoranda, and agency budgets as well as qualitative interviews conducted with current and former state employees to describe the current state of contract management in New Jersey. We then compare prescribed best practices to actual practices. In doing so we uncovered three significant structural deficiencies in New Jersey’s oversight framework. We conclude with policy implications and recommendations for improvement.