Individual circumstances can change over time, affecting the comparative advantages of contracting and direct service provision, or creating an opportunity for some other method of service delivery. The data gathered by the committee suggest that contracting, at least as perceived by the general managers surveyed, often entails a trade-off between cost containment and service quality. That some services are taken back in house may be the result of cost differentials diminishing over time. In other cases, the original desire to achieve cost savings or increase the amount of service through contracting may be replaced by a greater emphasis on improving service quality. As transit systems exert more control over service quality by imposing stringent quality requirements in contracts, it is reasonable to assume that contractor costs will increase over time. At the same time, labor unions may agree to changes in collective bargaining agreements that make direct service provision more cost-competitive, blunting differences between in-house and contractor costs.

A final and related insight concerns the nature of transit contracting. As discussed in Chapter 3, there is evidence that certain aspects of transit service contracting are difficult to articulate in a written agreement. As an example, transit systems can come to value particular qualities of individual contractors that cannot readily be specified in a request for proposals or a contract document; a transit manager may, for instance, be reluctant to switch from a contractor that provides demand-responsive services with few complaints from customers. The continuation of such relationships may be advantageous to riders as well as to the agency and contractor involved. The extent to which such service contracting relationships exist today in the transit industry and can be fostered and maintained to the benefit of riders deserves further consideration in follow-on studies.



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