There is much confusion in the debate about contestability, commissioning and outsourcing in the public sector reform debate. This ANZSOG piece from Gary Sturgess is a good explanation of some of the differences and why contestability is so important.
“This paper argues that there is a middle way between monopoly and market-testing. It is possible to use performance benchmarking and the prospect of prompt intervention in case of underperformance to drive increased efficiency and effectiveness, while also recognising the importance of a public service ethos, and the value embedded in many of the systems, processes and relationships through which these services are currently delivered. That middle way is contestability.”