Decision Making For Outsourcing And Privatization Of Vehicle And Equipment Fleet Maintenance

TRB’s National Cooperative Highway Research Program (NCHRP) Report 692: Decision Making for Outsourcing and Privatization of Vehicle and Equipment Fleet Maintenance presents a framework for conducting systematic analysis and making decisions on outsourcing and privatization of vehicle and equipment fleet maintenance.

How does life cycle cost analysis help quantify the decision-making process for determining when a piece of equipment needs replacing? How can you use benchmarking principles to ensure your fleet operates at its optimum? While many organizations have an accounting department for handling finances, effective fleet management also requires knowledge of the financial considerations that affect their fleet operations. This 2023 Automotive Fleet Guidebook presents these general finance competencies every fleet manager should know including analysis of various acquisition options, ability to conduct a life cycle analysis, basic accounting principles, benchmarking, outsourcing decisions, and preparing and implementing a fleet budget.

A central role of a state Department of Transportation (DOT) fleet manager is to maintain a clear understanding of the fleet's costs. This helps in tracking activities over time, comparing costs with other fleets, communicating with stakeholders, and effectively managing fleet assets. The TRB National Cooperative Highway Research Program's NCHRP Research Report 944: Guide to Calculating Ownership and Operating Costs of Department of Transportation Vehicles and Equipment: An Accounting Perspective provides a practical, logical, and transparent framework for conducting fleet cost accounting in state DOTs. The Guide focuses on the unique aspects of DOT fleets, although the principles in the Guide could be extended to any public fleet. Without a complete understanding of fleet costs, the fundamental functions of fleet managers--such as equipment replacement decisions, outsourcing decisions, and budget requests--are diminished. Ultimately, fleet managers need full confidence in their fleet cost numbers to have credibility with fleet stakeholders. The report is accompanied by a PowerPoint presentation summary.

In an assessment of the pros and cons of public sector privatization, Sclar (urban planning, Columbia U.), who is affiliated with the Economic Policy Institute in Washington, DC, warns that outsourcing services may not result in leaner US government. He examines alternatives and offers tips for public sector reform. Annotation copyrighted by Book News Inc., Portland, OR