Outsourcing the Constitution and Administrative Law Norms

Published date01 June 2005
Date01 June 2005
Subject MatterArticles
American University
Rutgers University—Newark
In the United States, the constitutional constraints and administrative law requirements imposed on government
agencies generally have no applicability to private entities performing outsourced public administrative activities.
In this article, the authors broadly explorethe issues associated with outsourcing constitutional and administrative
law norms along with government work by imposing them on private contractors. The authors seek to help frame
these issues morecogently for the public administration community in an effort to promote morecomprehensive and
thoughtful discussion of outsourcingand a greater role for public administrative expertise in determining when and
how to apply constitutional and administrative law norms to government contractors.
Keywords: outsourcing; constitution; administrative law; state action doctrine; freedom of information
The literature on privatization in public administration pays only limited attention to the
stark reality that when government activities are privatizedor outsourced, democratic norms
embodied in constitutional and administrative law are apt to be lost. Notable exceptions
include Moe (1987, 2001), Moe and Gilmour (1995), Gilmour and Jensen (1998), and Rob-
erts (2000).1However, much more space has been devoted to this result of so-called third-
party government in law reviews (Bass & Hammitt, 2002; Feiser, 1999; Freeman, 2003;
Gillette & Stephan, 1998; Guttman, 2000a; Mays, 1995). Failure to more fully address the
effect of privatizationon constitutional and administrative law rights and protections in pub-
lic administration promotes discussion and analysis that focus overwhelmingly on cost-
effectiveness,techniques for privatizing and outsourcing, contract management, and perfor-
mance monitoring. The field’sinstrumental and pragmatic approaches often give short shrift
to constitutional contractarianism (Piotrowski & Rosenbloom, 2002; Rosenbloom, 2003,
pp. 172-176; Rosenbloom & O’Leary, 1997, pp. 17-22). Public administrativescholars and
practitioners, anxious to improve administrative practice, often jump from accurate diagno-
sis of complex problems to the prescription of untested, flawed, or ill-conceived reforms—
many of which fail largelybecause they emphasize managerial values over political and con-
stitutional ones (Caiden, 1991, pp. 1-33, 296-298). This is often manifested in proposals for
Initial Submission: August 6, 2004
Accepted: September 15, 2004
DOI: 10.1177/0275074004272619
© 2005 Sage Publications
third-party accountability that largely ignore law, relying instead almost entirely on nested
hierarchical managerial relationships reaching through the top levels of agencies and poten-
tially culminating in oversight by elected officials (Posner, 2002). In focusing on manage-
ment, contemporary public administration tends to neglect the broader issues of democratic
governance, which were historically at the core of the field’s concerns (Lynn, 2001).
In this article, we illustrate some of the costs of privatizationand outsourcing in terms of
constitutional and administrative law norms as well as why competitive sourcing equations
are incomplete without their full consideration. We explore the prospects for outsourcing
constitutional and administrative law norms along with government activities by subjecting
contractors to some of the requirements these norms impose on public agencies. For
instance, should privatecontractors ’ employees have rights to whistle-blowing, privacy, and
liberty that more or less match those guaranteed to government employees by constitutional
law? Should freedom of information, open records, and open meetings lawsbe applied to pri-
vate contractors? Should the public have the same constitutional and administrative law
protections when they deal with private contractors doing outsourced government work as
when they interact directly with government agencies? Our wider purpose is to bring such
questions to the forefront of public policy discussion and decision making regarding compet-
itive sourcing and outsourcing. Wehope to frame the issues cogently for the public adminis-
tration community in the interests of promoting a more comprehensive and thoughtful
assessment of privatizing, one that brings public administrative expertise to the forefront of
determining when and how to apply constitutional and administrative lawnorms to govern-
ment contractors.
Apart from the Thirteenth Amendment’s prohibition of slavery and involuntaryservitude
other than as criminal punishment, the U.S. Constitution does not apply to purely private
relationships. As the Supreme Court reiterated in 1988, “Embedded in our Fourteenth
Amendment jurisprudence is a dichotomy between state [governmental] action, which is
subject to scrutiny under the Amendment’s Due Process Clause, and private conduct, against
which the Amendment affords no shield, no matter how unfair that conduct may be”
(National Collegiate Athletic Association v. Tarkanian, 1988, p. 191). A relatively narrow
breach of this dichotomy, analyzed infra, occurs when a private entity becomes a state (i.e.,
governmental) actor for constitutional purposes and is therefore subject to constitutional
constraints. Under federal constitutional law, five general types of public-private involve-
ment are most likely to transform a privateparty into a state actor: (a) privateengagement in a
public function, as defined by the courts; (b) government control of an ostensibly private
party; (c) coordinated joint public-private participation in an activity; (d) entwinement of
governmental and private actors to the extent that theyfunction as a single organization; and
(e) empowering private entities to use government’s coercive power such as the power to
seize assets. State-level constitutional law draws similar distinctions between governmental
and private action, although variation in specific applications is to be expected.
For the most part, administrative lawalso incorporates a dichotomy between governmen-
tal and nongovernmental activity.Except with respect to formally consti tuted advisory com-
mittees and negotiated rulemaking committees, federal administrative law—including its
provisions for freedom of information, open meetings, enforcement proceedings, and public
104 ARPA / June 2005

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