Contracting Out v. InHouse Services

1
Contracting Out v. In-House Services

• Kevin K. Webb
• Rockin R River Rides

2
Who Am I?

• General Manager of three corporations based out
  of Rockin R River Rides in New Braunfels,
  Texas Rockin R, Dos Rios, and Camp Huaco
  Springs
• Former Chairman of City of New Braunfels River
  Activities Committee
• Comal County Water Oriented Recreation District
  Director
• Interested and active recreationalistprimarily
  in private enterprise contexts
• RPTS!

3
What is Contracting Out?Two Contexts

• Contracting Out Actual PR Services
• Shifts responsibility for production of park and
  recreation services away from an agencys
  employees to an outside organization that is paid
  to provide them (Crompton, 1999).

• Contracting Out for Technical Professional
  Services
• Typically landscaping, planning, construction,
  and maintenance services.

4
Who Cares About Contracting Out?

• Whose money is it? Citizens/Ownersall of us and
  our employers
• Managerssavings or efficiency in different areas
  may constitute part of compensation packages in
  private enterprises
• Usersproduct quality

5
Advantages of Contracting Out Services

• Cost Savings
• Technical Expertise
• Enhanced Product Quality
• Liability Sharing with Provider

6
Disadvantages of Contracting Out

• Displacement of workers
• Supervision Costs often Hidden
• Loss of Contact with Customers
• Contract Failure
• Equity and Pricing (public)
• Will you be able to evaluate services and do hard
  cost comparisons?

7
Rockin Rs Services

• Contracted Out
• Restroom Cleaning
• Some Construction
• Overflow Transport
• Security
• Legal and Accounting

• In-House
• Customer Service on all Levels
• Vehicle Maintenance and Repair
• Human Resources
• Public Relations
• Advertising
• Just About Everything Else

8
Rockin R Services

• Hybrids
• Lawn Maintenance
• Raft Repair
• Hauling and Backhoe Work

9
Whats a Hybrid?

• Mixes the advantages of both in-house and
  contracting out of services by forming a
  semi-independent partnerships to answer the needs
  of the agency while providing services to other
  enterprises

• Tru-Cut Lawn Service
• Rubbers Raft Repair
• New Braunfels Backhoe and Hauling
• Partnerships formed by corporate board members
• Profits subsidize the services to the primary or
  parent organization

10
Good Hybrid Characteristics

• Strong, well compensated management
• Cost efficiency to parent organization without
  costly supervision
• Nominal profitswhat business are we in? What is
  the intention of the enterprise?
• Minimal equipment and staff mixing after year two

11
Which One is Best?

• Every option has a trade-off that must consider
  the user first cost efficiency guides
  decisions, but users make them
• Using this as a guiding premise, one can go
  wrong, but mistakes will be made at the expense
  of the organization rather than the user
• Agencies recover, but users dont always return
  if services are below accepted standards

12
Questions?
13
Contact Information

• Kevin K. Webb
• 1405 Gruene Rd.
• New Braunfels, TX
• 78130
• (800) 55-FLOAT
• kevin_at_rockinr.com
• www.rockinr.com