Volume 13, Number 1, Spring 2013

Size and Structure in the Purchasing Function: Evidence from German Municipalities ................................................... 1
C. H. Glock and M. G. Broens

U.S. and E.U. SME Subcontracting Policy and Practice Trends: Towards a Transatlantic Accountability Consensus .... 39
M. V. Kidalov

Liberalised Public Procurement of ICT Services for Schools: An Empirical Case from Finland ....................................... 72
P. Leviäkangas, R. Hautala, V. Britschgi and R. Öörni

Characterizing the Accuracy of DoD Operating and Support Cost Estimates ................................................................. 103
E. T. Ryan, D. R. Jacques, J. D. Ritschel, and C. M. Schubert

ABSTRACT. For decades, the Department of Defense (DoD) has employed numerous reporting and monitoring tools for characterizing the acquisition cost estimates of its programs. These tools have led to dozens of studies thoroughly documenting the magnitude and extent of DoD acquisition cost growth. However, little attention has been paid to the behavior of the other main cost component of a system's life cycle cost: Operating and Support (O&S) costs. Consequently, the DoD has little knowledge regarding the accuracy of O&S cost estimates or how that accuracy changes over time. In a previous paper, the authors described an analytical methodology for remedying this deficiency via a study to characterize the historical accuracy of O&S cost estimates. The results are presented here, and indicate there tend to be large errors in DoD O&S cost estimates, and that the accuracy of the estimates improves little over time.

ABSTRACT. U.S. and E.U. public and defense procurement rules require large prime contractors to promote subcontracts to small businesses, a.k.a. small and medium enterprises (SMEs). Under the U.S. Small Business Act, large firms encourage subcontracting through publicity, subcontracting plans, and “good faith” efforts to achieve subcontracting goals. However, processoriented measures failed to guarantee definitive results. In contrast, E.U. and member governments can hold large firms accountable to stricter subcontracting standards (often sweetened by incentives). With the Small Business Jobs Act of 2010, the U.S. is trying accountability measures now. Therefore, large contractors must plan for definitive subcontracting commitments in both markets.

ABSTRACT. The aim of this research was to evaluate the new procurement practices of information and communication technology (ICT) services in Finnish-speaking schools in the City of Kauniainen. In the new model, schools define their needs and school administration mandates the procurement through tendering. The research included a review of the problems associated with procurement practices and the assessment of the procurement model. The results show that service levels have been improved and unit costs as well as the environmental load have been reduced. The new model requires the schools to have the skills and expertise to define their needs and the competencies to prepare and execute the procurement process. The case analysis of the Finnish “Dream School” in Kauniainen shows that administrative and governance aspects are equally important in successful deployment of technology.

ABSTRACT. This paper analyzes how German municipalities organize their purchasing activities. It aims to identify patterns in the structure of the purchasing function and to study how the size of the municipality influences the design of its purchasing organization. Therefore, an analytical framework based on contingency and organization theory is developed and results of an empirical study are presented. The results indicate that German municipalities use a medium level of centralization and specialization in organizing their purchasing activities, but that the purchasing process is highly formalized and represented on high hierarchical levels in many cases. As to the relationship between the size of a municipality and the structure of its purchasing function, the study indicates that size, measured by the number of inhabitants, the number of employees and purchasing volume influences the structural variables in various ways.

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