Competition and Choice in New York City . Social Services

Privatization is intended to improve public services by introducing competition and choice. Does privatization of social services result in competition? To answer this we studied New York City's experience with contracts for three services: shelters for homeless adults, home care, and employment training. A total of 132 contract awards to nonprofit agencies were examined. The evidence suggests the procurement procedures were competitive and followed good practices. There was significant competition in terms of the number of announcements issued, the number of requests for proposals distributed, and the number of proposals ultimately submitted‐an average of 2.48 proposals per award. Contracting for homeless shelters has produced a voucher‐like system with desirable features. Vouchers are also used for some employment training and could be used for home care. Such systems can introduce even more competition and choice for clients of social services. Problems of contracting with nonprofit agencies are reviewed.