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Australian Journal of Forensic Sciences

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Forensic science service provider

models: data-driven support for better
delivery options
a
Paul J. Speaker
a
West Virginia University, Finance, College of Business and
Economics, West Virginia University, Morgantown, 26506-6025,
USA.
Published online: 29 Apr 2013.

To cite this article: Paul J. Speaker (2013) Forensic science service provider models: data-driven
support for better delivery options, Australian Journal of Forensic Sciences, 45:4, 398-406, DOI:
10.1080/00450618.2013.773076

To link to this article: http://dx.doi.org/10.1080/00450618.2013.773076

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 Australian Journal of Forensic Sciences, 2013
Vol. 45, No. 4, 398–406, http://dx.doi.org/10.1080/00450618.2013.773076

Forensic science service provider models: data-driven support for

better delivery options
Paul J. Speaker*

West Virginia University, Finance, College of Business and Economics, West Virginia University,
Morgantown, 26506-6025, USA
(Received 23 January 2013; final version received 29 January 2013)
Downloaded by [The Aga Khan University] at 23:08 26 February 2015

There are a variety of models for the delivery of forensic science analysis in service
to the justice system. In answer to the question as to whether there is a ‘best’ option
for the delivery of forensic science services, New Zealand’s Institute of Environmen-
tal Science and Research (ESR) has been offered as a model which demonstrates a
comparative advantage over the delivery of forensic services in more traditional
models. The support for that assertion rests in the ability of the ESR to react at the
speed of business and avoid bureaucratic drag found too often in the public sector.
This efficiency argument addresses one dimension of the search for ‘best’ delivery.
The second dimension involves the discovery of the optimal scale of operation to
take efficiency and turn it into cost effectiveness.
Keywords: efficiency; cost effectiveness; financial management; economies of scale

Introduction
There are a variety of models available for the delivery of forensic science analysis
in service to the justice system. These range from police as self-suppliers to police
as customers of public, private, or joint public-private laboratories. Bedford1 poses
the question as to whether there is a ‘best’ option for the delivery of forensic
science services. In answer to that question, New Zealand’s Institute of
Environmental Science and Research (ESR) is offered as a model which demon-
strates a comparative advantage over the delivery of forensic services in more
traditional models. That advantage is attributed partly as the result of New Zealand’s
establishment of the ESR as a Crown Research Institute (CRI) with operational
directives that invoke some behaviours of private sector business while maintaining a
public sector mission.
Additional support is offered by Maguire et al.2 with empirical support to suggest
that the specific model is a critical component in the determination of the most efficient
model for the delivery of services. However the specific model employed may be less
critical than the volume of activity of the forensic laboratory when it comes to cost-
effective delivery. The empirical evidence suggests that an examination of the various
investigative areas of the forensic sciences provides illustrations of the economic issue
of economies of scale and points to a ‘right size’ level of casework that is associated
with the greatest cost effectiveness. The empirical evidence further suggests that cost

*Email: paul.speaker@mail.wvu.edu

Ó 2013 Australian Academy of Forensic Sciences

 Australian Journal of Forensic Sciences 399

effectiveness in forensic laboratories is highly correlated with population size and

associated crime rates, two factors that may be every bit as important as the choice of
delivery model. However, rather than offering a contradiction to Bedford’s analysis, the
evidence offers additional support for the decisions of ESR under the mandate of the
CRI.
Many of the observations in Bedford1 regarding the decisions of the ESR have
quantitative support from the empirical analysis of project FORESIGHT.3 To date, this
empirical analysis has been applied using data from 39 US laboratories and 26 non-US
laboratories representing North America, South America, Europe, and Australia/New
Zealand. This includes decisions to consolidate services2 and the adoption of private
sector behaviours4 in the organization of the ESR. A for-profit mandate does lead to
efficient allocations of scarce resources in a market economy. Public sector services
arise from mandates that extend beyond the principles of the for-profit sector. The man-
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date of the CRI provides an important example of a balanced scorecard approach3 to

the delivery of public services that is measured against more than just the financial met-
rics.5 That mandate and the organizational form of the ESR enable ‘independence, man-
agement flexibility and responsiveness to changes and challenges’, (Ref. 1, p. 147) that
mimics the best practices of the private sector while permitting the expanded goals of
the public sector.
In the following section, several observations about the ESR model are noted with
particular attention paid to the connection between the model and economic principles.
Next, a few concepts from economic theory are introduced to assist in the analysis of
laboratory performance. This includes some foundations of capitalist markets and the
resulting nature of output to explain how private markets lead to cost-effective delivery
of goods or services. That cost effectiveness leads to the concept of economies of scale.
In the subsequent section, empirical evidence from Project FORESIGHT is presented to
demonstrate where forensic science laboratories operate with respect to the achievement
of scale economies. Next, the ESR is considered with respect to the performance
against the theoretical model and the intuitive Bedford1 observations are reconsidered in
light of this economic standard, and connections to forensic laboratories as highlighted
elsewhere.6 Concluding comments follow.

Lessons from the New Zealand model

In an attempt to determine the ‘best’ model for the delivery of forensic sciences, Bed-
ford1 offers some compelling arguments for the brilliance of the New Zealand ESR as
promoting a close approximation of ‘best’. Consider a review of some of the elements
of the ESR and the implications for a more efficient, cost-reducing model of analytical
delivery. These include an organizational structure that removes the hierarchical layers
typical of the public sector and replaces the decision-making with speed and flexibility.
Additionally, there is an explicit financial performance goal as part of the CRI mandate,
where the managerial decisions of the ESR are expected to provide a return to equity
holders that is typical of a market system. The financial performance motive is associ-
ated with a resource allocation in which decisions are based in a cost-benefit frame-
work. That framework calls for the adoption of only those actions where the additional
benefit exceeds the additional costs. That decision-making criterion is possible to
achieve when coupled with the organizational structure that permits these actions to be
accomplished in a timely manner.
 400 P.J. Speaker

With this structure at its foundation, the ESR has managed to make those decisions
that permit efficiency gains for the level of activity for New Zealand’s forensic science
investigations. Some of those efficiency gains have come as politically-motivated deci-
sions were replaced by economically-motivated decisions. This includes a reduction in
the amount of duplication of effort through the maintenance of multiple full-service lab-
oratories. The CRI mandate replaced the political motivation and permitted these
improvements in overall performance. Further gains occurred via the transfer of funds
between police and ESR as a reflection of value for service that is typified in the mar-
ginal cost versus marginal benefit decision of every market interaction. Additionally,
those continued cost-benefit decisions have resulted in a change in the nature of investi-
gative work demanded as the police customer recognizes the opportunity cost trade-off
between high cost and low cost services. When choices are limited by a budget
constraint, the decision to request a test in one particular investigative area is also a
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decision not to test in some other investigative area or to reject or delay testing for
some other case.
Consider a demonstration of the efficiency gains as highlighted for a hypothetical
laboratory as illustrated in Figure 1. Suppose that each of the observations presented in
the figure represent a different laboratory and the associated average cost to provide a
particular investigative service. Assume further that the arrow represents the reduction
in the average cost for one particular laboratory. As with laboratories across the globe,
there is no known ‘best’ possible metric for average cost; there is only the knowledge

Figure 1. Reduction in average cost from ‘best’ model adoption.

 Australian Journal of Forensic Sciences 401

of whether performance is better over time or better in comparison to other laboratories.

Certainly, there is a bit of comfort to the laboratory director who is able to claim a per-
formance level that results in below average costs, such as is highlighted by the arrow.
The ESR has been able to see an increase in efficiency that effectively reduces the aver-
age cost for the provision of each investigative service and that lowering of average
cost provides supportive evidence for the argument of a ‘better’ model. The description
of the performance of the ESR suggests that we would likely see that this model has
led to average costs that fall below the forensic industry average and thus lends support
to a claim of ‘best’ model.
Figure 1 is a bit simplistic in its view of the notion of the ‘best’ model in that the
sole consideration is a comparative performance with respect to the average cost of
analysis. The reasons behind a laboratory’s improvement over time or a cross-sectional
comparison with other laboratories can be detailed via a decomposition of the average
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cost.6 Such decompositions include a revelation of the level of staffing, the investment
in laboratory equipment, the productivity of the laboratory’s scientists, the prices of all
inputs, and the laboratory caseload. But a more thorough examination, towards the goal
of determination of the ‘best’ model for the provision of forensic services, begs that the
one-dimensional view presented in Figure 1 be expanded to a meaningful second
dimension that considers the scale of operations and how that is related to the most
cost-effective delivery.

Economic theory
Economics is a social science with laws at its foundation. One of the most familiar of
these laws is the Law of Demand, and how it relates to the forensic sciences has been
discussed elsewhere.7 For the present discussion, consider another foundational law in
economics, which is demonstrated through the Law of Diminishing Marginal Returns
(LDMR) regarding the production of goods and services as more inputs are used. One
outcome of LDMR is that we expect to see increasing returns to scale at the lower lev-
els of provision of goods and services, but reach a point where greater production
results in decreasing returns to scale. When a good or service reaches that nexus where
the returns to scale are optimized, we refer to that level of output as perfect economies
of scale. The upper half of Figure 2 illustrates the outcome of the LDMR via the repre-
sentation of total cost (TC) as a backward-bending S-shaped curve when mapped
against the level of output, processed cases.
This phenomenon is perhaps most easily understood by looking at levels of output
mapped against the average cost to produce those levels of output.2 At the lowest levels
of output the average cost falls as more is produced but eventually it reaches a mini-
mum average cost and thereafter average costs rise as more production takes place. The
graphical depiction of average cost is a U-shaped curve with respect to the level of out-
put as shown in the lower half of Figure 2. That minimum point on the U-shaped curve
is the level of production associated with perfect economies of scale, the most cost-
effective level of production.
In the private sector, the economic forces of the marketplace encourage businesses
to ‘right-size’ as markets develop.4 Each firm in a particular industry will operate at a
production level that is consistent with perfect economies of scale. Failure to operate at
this level will result in higher costs of production and an inability to compete. Survival
of the fittest will force high-cost producers to exit the market and the emerging firms to
operate on a similar scale.
 402 P.J. Speaker

Total Cost ($)

TC
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0 200 400 600 800 1000 1200 1400

Cases Processed
Average Cost, Marginal Cost ($)

MC

ATC

0 200 400 600 800 1000 1200 1400

Cases Processed

Figure 2. Cost effectiveness and economies of scale.

Public sector entities, including forensic science laboratories, are subject to the same
economic foundations as found in the private sector, but the forces in the marketplace
that automatically lead to cost-effective behaviour might not be in evidence. A few
studies have sought to capture the performance of public sector entities with respect to
the theoretical model described above. Knapp8 examines public crematoria in the Uni-
ted Kingdom and observes the U-shaped average cost curve anticipated by economic
theory. Lacking the marketplace incentives to naturally ‘right-size’ at a level consistent
with perfect economies of scale, the level of activity of the crematoria operates at levels
along the curve. More recently, Christoffersen et al.9 examine the servicing of cleaning
contracts for Danish schools and observe similar behaviours. These two examples, cre-
matoria and school cleaning, are mentioned because it is the rare situation that permits
meaningful measurement in the public sector to illustrate the phenomena depicted in
Figure 2.
Figure 3 offers a look at how that hypothetical demonstration in Figure 1 might be
reinterpreted if this two-dimensional view were considered. The original data repre-
sented the average cost for various laboratories. The natural inclination would be to
make claims of efficiency with respect to a comparison to the average. When the size
of each laboratory’s caseload is considered with respect the associated average cost, it
 Australian Journal of Forensic Sciences 403

Average Cost
$2,500 $2,500

$2,000 $2,000

$1,500 $1,500

$1,000 $1,000

$500 $500

$0 $0
0 200 400 600 800 1000 1200 1400
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Cases Processed

Figure 3. Efficiency and effectiveness.

$2,500
Average Cost

$2,000
'Best' model

$1,500

$1,000

$500
economies of scale

$0
0 200 400 600 800 1000 1200 1400
Cases Processed

Figure 4. Economies of scale.

is possible that every laboratory had already been operating with great efficiency. This
is highlighted in Figure 4 for four of the hypothetical laboratories. The two arrows from
the high average cost laboratories place them along the U-shaped average cost curve.
They are each highly efficient for their given caseloads. They merely suffer from a
lower volume of activity that prevents them from achieving perfect economies of scale
for the population served or the crime rate experienced. A jurisdiction blessed with a
low crime rate will certainly be willing to ‘suffer’ from this higher average cost. The
other two highlighted laboratories map to size issues that might be addressed. Each of
these laboratories maps to a portion beyond perfect economies of scale and suffers from
diseconomies of scale. The laboratories experiencing diseconomies of scale also repre-
sent efficient performance, but might be more cost effective it they were to consider a
second laboratory to optimize average cost through right-sizing.
The analysis of the ESR in Bedford1 is suggestive of much of this theoretical frame-
work. Bedford notes the restructuring of the delivery of forensic services following the
 404 P.J. Speaker

formation of the ESR. That restructuring included a reduction in the number of full ser-
vice laboratories as a means to increase efficiency for a given level of activity through
a reduction in fixed costs. The search for the best model is a search for efficiency rather
than cost effectiveness. The distinction between efficiency and cost effectiveness is
illustrated in Figure 4. Efficiency calls for improvements in process through systemic
changes that permit lower cost provision for a given level of casework. Cost effective-
ness calls for achievement of perfect economies of scale.
A potential outcome of the efficiency is a trade-off between forensic science ser-
vices where the perceived value from the customer does not match the opportunity cost.
As a result, some services (e.g. trace evidence) face a reduced demand in favour of
other less costly services such as DNA (Ref. 1, p. 152). As the demand for DNA
services increases, the average cost of DNA casework falls towards perfect economies
of scale, while the declining demand for other services experiences higher average costs
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at lower volumes of analysis. Services flow to their highest valued use as expected in a
market economy. While this may be lamentable for the continuation of some areas of
investigation, the losses in these areas are countered with even greater gains in output
in alternative areas of investigation.

Evidence – Project FORESIGHT

It is the rare circumstance in which the theoretical presentation of the prior section may
be observed in reality. Producers of goods and services in for-profit markets have gravi-
tated towards the level of production associated with perfect economies of scale. As
such, we only get to view the survivors and do not see any of the remaining competi-
tors on the downward or upward slopes of the U-shaped average cost curve. In the pub-
lic sector, we may have a broader spectrum for the provision of public services, but
generally lack a consistent measure of output upon which to compare the performance
of various providers. Fortunately, recent developments in the measurement of perfor-
mance in the forensic sciences have occurred that allows observation of the theoretical
construct. Because of the work of the European QUADRUPOL study10 and the subse-
quent developments of project FORESIGHT,11 consistent metrics have emerged to eval-
uate economies of scale for forensic laboratories. This permits the two-dimensional
response to the question of ‘best’ provision of forensic science services.
Maguire et al.2 offer initial evidence that the provision of forensic science services
also exhibits a wide range of levels along the theoretical U-shaped average cost curve.
An example of that performance has been observed for DNA Casework analysis.12 Using
a sample of 60 volunteer laboratories, a U-shaped cost curve emerges with the casework
and associated average cost combinations mapping closely to the theoretical curve. There
are some outliers with average costs significantly higher than the other laboratories that
demonstrate average costs along the curve. While a laboratory operating at the lowest
point on the average cost curve is considered to be cost effective, having achieved perfect
economies of scale, laboratories operating at average cost levels consistent with the theo-
retical curve are considered to be operating efficiently with respect to the volume of activ-
ity. Those laboratories operating above the curve are not efficient.
Figure 5 illustrates the nature of the separate potential gains through efficiency and
cost effectiveness with the two-dimensional view of the laboratory decision. A labora-
tory may find that it is operating at a higher cost than other laboratories. It is not imme-
diately clear whether that higher cost is a product of the model of delivery or some
other factor. As Figure 5 illustrates, there are potential gains from the adoption of a bet-
 Australian Journal of Forensic Sciences 405

$2,500

Average Cost
$2,000

$1,500

Potential gains
$1,000 from delivery
model
Cost Effectiveness
gains from scale
$500
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$0
0 200 400 600 800 1000 1200 1400
Cases Processed

Figure 5. Two-dimensional view of potential gains.

Table 1. Estimated economies of scale

Investigative area Optimal caseload range

Blood alcohol analysis 13,500 to 17,500
DNA casework 4,225 to 7,225
DNA database 28,500 to 46,950
Document examination 185 to 310
Drugs – controlled substances 16,225 to 23,025
Fire analysis 260 to 380
Firearms & ballistics 3,350 to 4,250
Gun shot residue 330 to 490
Serology/biology analysis 4,100 to 6,300
Toxicology ante mortem 5,680 to 7,990
Toxicology post mortem 4,750 to 7,525

ter delivery model such as found with the ESR. But these potential gains from the
delivery model merely respond to the one-dimensional question regarding the best
delivery model for a given level of cases. The cost effectiveness inquiry also requires
that a second question be investigated as to the optimal level of case processing associ-
ated with that ‘best’ model. Those additional gains from a reduction in the cost per case
are also highlighted in Figure 5.
Project FORESIGHT has offered some insight into the level of casework that is
associated with the least cost delivery of various investigative areas in the forensic
sciences. Using a volunteer sample from 65 accredited laboratories in the 2010–2011
period, a range was determined in which perfect economies of scale were estimated.
Table 1 illustrates the estimated ranges for several areas of investigation.

Delivery model versus size

Armed with this two-dimensional view, it is possible to revisit the New Zealand model
and recognize the keen economic intuition behind the decisions of the ESR. The story
presented through Figures 1–5 indicates that there is a ‘best’ size and a ‘best’ model to
 406 P.J. Speaker

discover in the provision of forensic science services. Size based on jurisdiction will
not automatically address the question of optimal size, but separate facilities based on
political motivations will certainly induce economic inefficiencies that prevent optimal
behaviour. The ESR recognized this when ‘it became apparent that separate full service
regional laboratories, operating in Auckland, Wellington and Christchurch for historical
reasons, could not be sustained. ... At this time the forensic analytical laboratories were
consolidated so that there was only one laboratory providing a national service in each
main forensic discipline’ (Ref. 1, p. 149). However, even with a single laboratory pro-
viding a particular investigative area analysis, it still might not handle a volume associ-
ated with perfect economies of scale, but it should be able to reach the most efficient
cost level for that volume of activity.
As with the laboratories participating in Project FORESIGHT, the ESR can discover
ways to improve its performance even further. ‘ESR needs to have a very good idea of the
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true cost of all activities undertaken and the impact on fixed costs and variable costs of
fluctuations in volume’ (Ref. 1, p. 152). Once their comparative position amongst labora-
tories is determined, the question of what might be done to optimize size can be
addressed.2
Finally, the attention to average cost does not ignore the broader mandate of the
ESR (or other laboratories). Although the CRI mandate includes a profitability directive,
it also includes a role for research, quality, and other interests to be addressed. Return
on equity and other financial metrics are merely part of the evaluation. As Houck et al.3
note, a balanced scorecard approach permits an evaluation of the whole of the
organization and provides a feedback loop for continuous improvement.

References

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sic Sci. 2011;43(2–3):147–156.
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ing, out-sourcing, and privatization. Forensic Sci Pol Mgmt: Int J. 2012;3(2):62–69.
3. Houck MM, Riley RA, Speaker PJ, Fleming AS. The balanced scorecard: Sustainable perfor-
mance assessment for forensic laboratories. Sci Justice. 2012; doi:10.1016/j.sci-
jus.2012.05.006.
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Mgmt: Int J. 2012;3(1):42–52.
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sciences: expectations in light of limited budgets. Forensic Sci Pol Mgmt: Int J. 2011;2
(1):36–43.
8. Knapp M. Economies of scale in local public services: the case of British crematoria. Appl
Econ. 1982;14:447–453.
9. Christoffersen H, Paldam M, Wurtz AH. Public versus private production and economies of
scale. Public Choice 2007;130:311–328.
10. European Network of Forensic Science Institutes. QUADRUPOL. 2003.
11. Houck MM, Riley RA, Speaker PJ, Witt TS. FORESIGHT: a business approach to improving
forensic science services. Forensic Sci Pol Mgmt: Int J. 2009;1(2):85–95.
12. Witt TS, Speaker PJ. The power of information. Forensic Mag. 2012; April 10:1–5.