Cost Analysis in Contract Decisions: Integrating Sustainability & Equity

The U.S. Office of Management and Budget recently updated regulations for federal grants to state and local governments, requiring jurisdictions to conduct a cost-benefit analysis for any procurement over a specified threshold. Local governments and advocates can utilize thorough cost analysis of contracts as a tool for advancing pro-worker, and -equity standards. This brief suggests localities seek to understand the underlying reasons for contracting services in the first place and to explore whether alternative solutions exist that do not involve outsourcing. The brief also emphasizes that governmental entities must conduct thorough quantitative and qualitative analyses of potential costs, risks, and benefits and provides examples of how jurisdictions have applied or failed to apply these practices.