Managing Outsourced Administrative Discretion

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An entire body of administrative law exists to guide the administrative discretion of public administrators. Although an increasing share of public services is being outsourced to the private sector, much of administrative law is not applicable to governments’ contracted agents. Alternatively, contracting agencies use the contract instrument to guide and constrain contractors’ exercise of delegated administrative discretion. This essay reports on a study of selected Florida local governments’ contracts for residential trash collection services. Although minimal discretion was placed in contractors’ hands, it still presented opportunities for abuse. The local governments used a variety of ways to manage the administrative discretion, including the imposition of public service ethics and transparency requirements. Upon analysis of contractual grants of and constraints upon administrative discretion, some suggestions are offered for enhancing contractual management of delegated administrative discretion.