Friday, February 04, 2011

Government contracting ideas...

I think the last thing people think of when they think about India is government efficiency. However, I read an article the other day that seemed surprisingly well thought out for any entity but especially for a government.

India is trying to assign every citizen a personal ID number (similar to our Social Security numbers). In a nation the size of India and just a handful of surnames (Shah, Sharma, Patel, Gupta, Singh, etc) this is a huge challenge. They are also adding a layer of complexity by trying to assign biometric markers (iris scans or fingerprints) to each person.

Rather than simply giving a 10 year contract to the firm with the best lobbyists (the US model), the Indian government has taken this novel approach. The lowest cost bidder gets 50% of the business, the 2nd place bidder gets 30% of the business and the third best bid gets the remaining 20%.

After a set period - 3-6 months - the government will re-evaluate each provider and reassign contract proportions based on their performance. So if the fastest, cheapest contractor happens to be the 3rd place contractor, they'll be rewarded with a larger share of the contract.

This is still open to fraud in a nation notorious for its bribery infrastructure, but I'd love to see us try this in the US with some of our contracts.

Stat of the day: A night in an American hospital typically costs 25 times as much as a night in an Indian, Brazilian or Chinese hospital.


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