Another related reason that government agencies have been drawn to contracting with the private sector, especially with for-profit companies, has been their need for personnel with specialized skills. This has been particularly acute in the area of information technology. With the recent radical changes in welfare policy, including the institution of work requirements, federal and state time limits on aid, and other provisions that require tracking client data in new ways, state and local welfare agencies have been attempting to create new management information systems and to modify old ones. PRWORA also required states to track new child support data and to ensure that their child support collection data systems interface with other federal and state systems. Many states had to make major enhancements to their systems to meet these requirements.
Workers with the necessary skills are often in short supply in public agencies but can be "bought" from the private sector. Contracting out can also make available a range of other areas of expertise that might be hard to find in government (GAO 1997b; Eggers and Ng 1993; Nightingale and Pindus 1997).