Abstract: Outsourcing of non-core activities has become a growing trend in healthcare industry. It provides multiple advantages to the healthcare organizations, like increased operational efficiency, technical expertise & risk sharing. However at the same time is found to be associated with various types of risks. Periodic evaluation of the services provided by the third party service provider & matching them against set standards is primary requisite to mitigate occurrence of such risks. This study evaluated the performance of outsourced medical equipment maintenance service in a tertiary care teaching hospital by retrospective analysis of records. A set of Key Performance Indicators (KPIs) were used for this purpose. Outsourcing ensured high operational efficiency of the department in terms of high completion rates of planned preventive maintenance (PPM) and breakdown maintenance (BM) work orders(WO) as well as maintenance of equipment uptimes above 95%.User satisfaction score of 83.67% and Cost of service ratio(COSR) of 4.20% portrays outsourcing as a cost effective decision for the organization.