Outsourcing the System Needs of a Fleet Term Paper

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Outsourcing the System Needs of a Fleet of School Buses to a Contracted Company

This paper explores the advantages and disadvantages to owning and operating a fleet of school buses and outsourcing the system needs to a contracted company. The writer examines the positive aspects of each option and discusses the negative aspects of each one. There were three sources used to complete this paper.

America's economy has been in a slump for several years now and with that the school budgets across the country are being reevaluated to reduce spending as much as possible. One aspect of the public school systems that is being examined is the issue of transportation. School buses have long since been a point of controversy during school bus discussions each year. School bus transportation becomes a bone of contention in many fiscal debates. The districts that provide transportation for its students must locate and purchase buses and maintain their mechanical soundness and safeness. Recently there has been a second possible solution for providing transportation for school students. The idea of outsourcing the transportation needs of entire districts has been experimented with some measure of success across the country. The outsourcing of buses for the purpose of transporting students to and from school and home offers certain benefits as well as certain problems. Each district that provides transportation has to look at the pros and cons of each possibility based on its own budget constraints, needs and abilities and then choose the option best suited for it.

PURCHASING and OWNING the BUSES

There are several advantages to purchasing and owning the district's school buses. One of the biggest advantages is the ability to keep control over the cost factor. Once a bus is purchased the district must maintain it however, it can be regularly done and hopefully the cost will be kept relatively low. The bus does not have to be fully replaced for many years, and as long as the regular maintenance is kept up the bus should provide many years of use for hundreds of thousands of students during its lifetime. Another excellent reason to purchase and own the school buses is that the cost will not rise with the inflation rates. Once the bus is owned as long as it is maintained it will not recost the district more money. If one out sources there are cost factors that have to do with many things outside of the realm of owning the actual bus that might cause the prices to rise.

If a district makes the choice to purchase and own the school buses to transport its students it provides itself with more control as well. The district knows at any given time exactly how many buses it owns. There can be an exact count to known how many students can be transported. In addition there is the consideration of field trips. The field trips are at different times from different schools to different locations and back. If the district owns its own buses it is possible to have a better handle on where they are and what they will be needed for. The availability of the buses can be better controlled when the district owns them.

While there are several positive reasons for a district to chose owning its own buses there are also negative aspects of ownership that the district must consider. One of the most important negative factors of bus ownership is cost. When buses break down the district will be responsible for the repair of that bus. It might be expensive and more importantly there is the liability involved with owning and running buses that are mechanically unsound. In addition to the cost of the parts the district has to maintain a maintenance department, or be willing to pay for outside repair bills. The maintenance department makes the most sense because the buses can be worked on in the evenings however there are costs associated with the development and implementation of a maintenance department that would not be incurred if the bus system were outsourced.

The down side of bus ownership does include liability. If a school bus gets into an accident and anybody is hurt the district opens itself to the liability of that injury. Whether the bus was mechanically sound will be closely examined and the results might be the cause of a large financial settlement or lawsuit on behalf of those in the accident. Along the same lines the insurance is an additional cost to the district that chooses to purchase and own its own transportation buses.

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CONTRACTING the BUSES to an OUTSOURCE COMPANY

Just as there are advantages and disadvantages to owning buses, there are each of these things in contracting the buses out as well. If a district makes the decision to outsource their transportation needs and contract with a bus company there are several things that will change with that decision.

One of the biggest factors that will change if a district decides to outsource and contract the bus system is the lack of financial liability. If the bus system is contracted through an outsource company that company will provide its own insurance and its own guarantee that the buses are mechanically sound and safe. The liability shifts from the district to the contract company in the event of an accident or some other mishap. There are other financial reasons to choose the option of outsourcing the bus needs to a contract company. If the district chooses to contract the bus system out it no longer has to maintain a maintenance department. This means that the district is not responsible for the salaries of the mechanics nor does it have to provide the benefits that it would have to if it maintained a maintenance department. Vacation times, sick leave and other cost factors are removed when the buses are contracted through an outsource contact.

Another financial consideration when it comes to owning or contracting the system is the storage. If the district owns and purchases the buses the district is then in the position to have to provide a place for the buses to be stored when not in use. If the buses are contracted out to an outsource company the storage of the buses is not the district's responsibility. This can save not only money on a piece of property but also saves property that might be better served in a different capacity. When the buses are outsourced and they break down the district can simply request a different bus. It is not responsible for the maintenance of them nor are breakdowns the districts problem. The maintenance falls completely to the company that is contracted to the district. The driver's benefits and sick pay are also the responsibility of the outsource company if they are providing the drivers for the district.

What are the benefits of outsourcing? What are the risks? How can you selectively outsource portions of your network without losing corporate control? What are the best methods to use in evaluating outsourcing proposals or systems integration deals (Emigh, 1993)?" These are questions that many districts across the nation currently face when it comes to the topic of student transportation to and from school.

Outsourcing is becoming more popular in recent years for many reasons. As districts turn to the idea of outsourcing the transportation of their students it is important that they understand the benefits as well as the negative aspects of using an outsource company.

One of the problems with outsourcing is that the districts are not always getting what they thought they would. Service may fall short of what the company promised and the time for problem solving may not be as fast as needed. If the district owns the buses there is an in house chain of command that will govern a quick change (Jones, 2002). If the company is an outsource company and there is a problem there is the chance that it will take a delayed amount of time to correct the situation. This could ultimately cause trouble with the transportation of the students and create a public anger against the district itself.

While some industries find they have a larger cash outlay if they outsource the busing question does not have that problem. In many fields such as the technological fields the outsourcing costs money because the company has to train the employees in how to use the outsource equipment. In the outsourcing of school buses the drivers are either supplied by the outsource company or the district hires drivers who have been trained and certified through the state that the district is located in. While there are many positive reasons to outsource the transportation of students in any given district there are also negative aspects of doing so. Outsourcing on the whole creates stresses that are not incurred with in house working. "The gap between what companies want, and what in fact they get out of outsourcing, is quite pronounced. The most….....

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