Bound For Botany Bay: Contracting for quality public services

Gary Sturgess, August 2005

A contracting fable 


Over a period of eighty years, somewhere around 160,000 British and Irish convicts were transported to the Australian colonies, almost all of them in ships owned and operated by private contractors.

In The Fatal Shore, the classic study of Australia’s convict system, Robert Hughes was highly critical of this system of contracting. According to Hughes, the First Fleet of convicts sent to New South Wales in 1787 was ‘a government affair from start to finish’.

The results were ‘muddled and potentially disastrous’, but they were much better than they would have been under private contract. Excluding an outbreak of typhus before the ships left port, 45 convicts and children died in the course of that initial voyage, a death rate of around 3%.

By contrast, with the Second Fleet – according to Hughes, the first of the contracted voyages – 267 convicts died at sea and another 150 upon arrival, a death rate of more than 40%. One of the survivors recalled that the convicts were confined in the hold for the entire journey and ‘were scarcely allowed sufficient quantity of victuals to keep us alive’.

For the ideological opponents of contracting, the lessons of Hughes’ comparison are obvious: the private sector cannot be trusted with the delivery of core public services. But in fact, Hughes was mistaken. Both fleets were contractor-operated.

As it turns out, the difference between a death rate of 3% and a death rate of 40% lies not in who delivers the service but in the design of the contract – the evaluation criteria, the performance regime, and the manner in which the contract is managed.

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A contracting fable that shows it is the design of the contract that matters for successful delivery – in the evaluation criteria, the performance regime, and the manner in which the contract is managed.

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