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9, THE IMPACT OF OUTSOURCING ON VICROADS 
AND THE PRIVATE SECTOR 
9.1 The impact on VicRoads 
The outsourcing of say 40-50 % of production or the supply 
component of the LIS Department’s work meant a displacement 
of 11-14 staff, amounting to a reduction of 25% of staff 
numbers at the time of the review leaving sufficient staff to 
maintain in-house expertise to manage the work and ensure 
VicRoads program and statutory requirements were met. This 
reduction in numbers was achieved by natural attrition, re- 
deployment or by offering voluntary redundancy packages 
(VDP). 
Naturally that sort of reduction (25%) caused considerable 
uncertainty on the part of staff in the Department and the 
regions and projects. 
Outsourcing would have to lead to a change in work processes 
from conducting surveys to managing the production of 
surveys. In the case of photogrammetry, this wasn’t such a big 
change, as the section had for some time been contracting out 
some or all of its work to a level where the final MicroStation 
design file and InRoads terrain modelling could be completed 
by VicRoads photogrammetry staff. In fact VicRoads has 
always contracted out the aerotriangulation component of jobs, 
as it didn’t have any equipment or expertise in that particular 
area. 
Department staff were required to maintain their commitment 
to a quality system, and at the same time ensure the contractors 
also worked to quality assurance principles. (Wood 1995) 
9.2 The impact on the private sector 
As many of the private firms had not done any work for 
VicRoads, it meant a very steep learning curve for these firms. 
It required a commitment from them to present survey and 
photogrammetric data to the standards that VicRoads had set up 
for its planning,design and construction requirements. This 
meant considerable investment in hardware and software 
(MicroStation and InRoads) in order to satisfy these 
requirements. 
The small size of some firms, one group of firms formed a 
consortium to provide the complete range of services required, 
and therefore to be able to submit a competitive tender for a 
contract. 
10. CONTRACT PERFORMANCE 
10.1 General performance 
Extensive consultation took place with each of the firms 
involved in the contract and with all the regional and project 
staff involved in administering the contract. Naturally most 
firms wanted to see the contract extended for a further period 
of twelve months, especially because of the cost involved in 
setting up to operate under the contract. This consultation took 
place during the term of the contracts and at the end of the first 
year. 
Overall, the response from firms was mixed. Firms which had 
calculated a low percentage of guide for fees tended to have 
more problems in reconciling the amount of work involved in 
each job and quoting for that job. Some of the smaller firms, 
and this included both of the photogrammetry firms, said they 
had some difficulties in keeping up with the rate of change of 
technology, and the impact that had on the format of the data 
required by VicRoads. 
Most of the firms readily accepted VicRoads conducting audits 
of their firms and their procedures. In fact some firms were 
well under way to achieving third party certification for their 
Quality systems and a number had already achieved this 
certification. 
Some minor problems were encountered when the firms were 
sub-contracting out work, such as aerial photography or Global 
Positioning System (GPS) work. These problems related to the 
amount added on as a management portion when quoting for 
jobs. 
Compared with the surveying contracts, management of the 
photogrammetry contracts presented fewer problems. This was 
mainly due to a more realistic tender price and the fact that 
these firms had been undertaking work for VicRoads as 
consultants for a number of years. 
The benchmark figure was calculated for each firm based on 
information provided during the tender process, and was used 
to monitor subsequent quotes for each contract assignment. 
The amount of work being contracted out was in the order of 
80% for photogrammetry and 4976 for survey services. This 
work was fully contract managed by LIS staff. This amounted 
to a total of less than $1,000,000 of contracted work. 
At the end of the first year, most of the survey contractors 
were able to deliver the products and services needed by 
VicRoads. However, there was a very steep learning curve for 
most firms. Initially all firms were slow or had difficulties in 
meeting some of the contractual requirements, such as 
insurance, quality plans, and Occupational Health and Safety. 
10.2 Performance indicators 
By using a representative sample of completed jobs done by all 
firms under the contracts, the following performance indicators 
were derived. This information was retrieved from the Lotus 
Notes database. 
Timeliness 81.1% 18.9% 
on time late 
Re-work 59.5% 35.1% 5.4% 
needed low high none 
Quality of 91.9% 8.1% 0% 
service very good satisfactory deficient 
Quality of 81.1% 16.2% 2.7% 
final product very good satisfactory deficient 
Level of 78.4% 21.6% 0% 
supervision low medium high 
International Archives of Photogrammetry and Remote Sensing. Vol. XXXI, Part B6. Vienna 1996