Businesses and private sector unions should be able to compete with public sector unions for jobs in food services, transportation, information technology, construction and building maintenance, he said.
"When you have closed tendering, it's only a couple of steps away from corruption," Hudak said. "And you don't get good quality services at the end of the day."
Standing in front of the Toronto District School Board's offices, Hudak pointed out that the board's obligation to give its union all building maintenance jobs resulted in a pencil sharpener being installed at a cost of $143.
"If you were hiring a handyman for your own home, you wouldn't take the first person that comes along, have them move in with you, and then use the exact same person every time you need your roof repaired no matter what the quality of service," he said.
"You'd shop around. And government needs to do that as well."
His test? If you can find the service in the Yellow Pages, it should be open to competitive bids, Hudak said.
Taxpayers in Indiana saved 30 per cent per meal at state correction facilities after the governor contracted out commercial services, he said.
Extending bidding on public service contracts to other groups will help save money for the cash-strapped government, Hudak said, which is facing a $14.4-billion deficit.
"This doesn't mean it's pro-union or anti-union, it's neutral," he said.
"Whoever can provide the best quality service — whether a public sector union, a private union, a small business — it's a level playing field to let everyone succeed and give it their best shot."
Hudak's musings about government contracts is among several trial balloons the Tory leader is floating, which also include having the province get out of the gambling business and potentially selling the LCBO. But they're not official party policy.
Hudak's "Tea Party-type ideas" won't work, said NDP Leader Andrea Horwath.
"What his ideas do is drive down wages, what his ideas do is squeeze more people out of the middle class," she said.
"What his ideas do basically is follow a roadmap to Alabama, which is not where Ontario wants to go."
The Tories mused about the same thing in the 1990s, but didn't follow through because they found that it was cheaper to have public service employees do the work, said Smokey Thomas, president of the Ontario Public Service Employees' Union.
"They'll tell that's not the case and everything else," he said. "Ask them to show you some hard evidence that it would save money, because it won't."
Thomas acknowledged that the examples of eye-popping bills for routine work at the Toronto school board damage the reputation of unions.
"You can judge the many by the actions of a few, but that doesn't hold water either," he said.
"I'm an evidence-based person. You show me the proof and then I'll say, you know what? You're right, I'm wrong."