Advantages of outsourcing:

1. Cost cutting
A business may find it cost-effective to outsource work to a third party which specializes in
it by contracting a private vendor which has the ability to lower the cost of providing services
and also protects the city from labor and equipment cost increases through the whole duration
of the contract.
2. Better quality of service
Most of the time tasks are outsourced to vendors who specialize in their field. The outsourced
vendors also have specific equipment and technical expertise, most of the times better than the
ones at the outsourcing organization. Effectively the tasks can be completed faster and with
better quality output.
3. Increase accountability for service delivery
By contracting, the city can thus hold the provider accountable for the poor service delivery
through the usage of contract renewal, performance bonds and lateness penalties. Also, rebidding
a contract gives the city the opportunity to make a comparison between the performances of
different contractors because it enables a competition between them. Another plus would be
given by the fact that performance bonds and lateness penalties protect cities from the effects of
poor performance.
Disadvantages of outsourcing:

1. Risk of contractor failure

For example, the city must not risk outsourcing the functions referring to public safety,
policy making and law enforcement since they are essential to the wellbeing and quality of
life of the citizens. We have to keep in mind fact that maintaining control over the previously
stated functions represents an important part of maintaining democratic control and
accountability over city services. Hence, a way to minimize the risk of contractor failure is
by first identifying and evaluating sources that are the best candidates for outsourcing and
excluding those for which these risks are unacceptable.
Moreover, outsourcing should never be considered for areas where there is not sufficient
private sector expertise and experience and also not for new programs and initiatives with
undefined goals and expectations.

2. Loss of certain advantages derived from in-house work

For example, outsourcing certain services can lead to loss of control over personnel, work
practices and also quality control.

3. Disputes with contractors

Since their only motivation is fueled by profit maximization, contractors tend to
be less responsible with the public assets and taxpayer dollars they receive. Furthermore,
there is the genuine risk of contractor bankruptcy or failure that can put the provision of
critical city services in jeopardy without adequate stop-gap measures in place.