Local Governments are increasingly reliant on a wide range of third party entities, (including other governments, private contractors, and nonprofits) to perform various functions on their behalf.  These third party relationships can offer perceived increases in efficiency, monetary savings, and improved flexibility or may reflect a desire of the residents for “privatization” of government.

However, these third party entities may not embrace the same ethical core, or operate under the same code of conduct as the hiring government.  These third party relationships can expose local governments to increased legal risks and, perhaps more importantly, loss of public confidence.  This exposure may not always be properly understood by governmental agencies who may fail to recognize that these third party entities act as government proxies, and are in the eyes of the public “one and the same” as the government.  Because of this unique proxy relationship, local governments have the obligation to carefully evaluate their associations with these third party entities to find out if they share a code of conduct, have the same expectations of ethics, and to indemnify themselves against legal risks and loss of reputation.