Alix Town authored an article for National Contract Management Association’s July 2018 Contract Management magazine

Alix Town authored an article for National Contract Management Association’s July 2018 Contract Management magazine titled “Too Small To Fail: How the United States Protects Against Market Instability.”

Globally, there has been a movement toward outsourcing functions that have been traditionally performed within governments—such as prison management or facilities maintenance. As a result, a symbiotic nature has formed between governments and their contractors. For many government contractors, they need the government to help sustain their business; and conversely, the government needs these contractors in order to function. In January, Carillion, one of the United Kingdom’s largest government outsourcing and construction contractors, collapsed. At the time of its collapse, Carillion held contracts to maintain 50,000 homes for UK military personnel, manage 50 prisons, provide 11,500 inpatient hospital beds, and provide 218 school meal services, among other contracts—including a £400 million contract for the Battersea Power Station redevelopment project and a massive £1.4 billion joint venture contract for HS2 (the UK’s new highspeed rail network). Due to the collapse, the UK government lost a major service provider and faced tremendous setbacks in a number of significant government projects, and small- and medium-sized UK businesses were left with the financial consequences.

The monumental collapse of Carillion leads to the question, is the U.S. government vulnerable to a similar crisis? Continue to the full article here.

Copyright 2018, National Contract Management Association. Used with permission.