Volume 14, Number 2, Summer 2014

Contents

Theory in Public Procurement Research........................................................................................................................................... 139

A. Flynn and P. Davis

Public Procurement in the European Union: The Case for National Threshold Values ................................................................. 181

P. Molander

Leveraging Strategic Sourcing and Knowledge Management to ImprovetheAcquisitionofKnowledge-Based Services................. 215

T. G. Hawkins, M. E. Nissen and R. G. Rendon Auditing

Procurement Contracts for Defense Material in Spain: IntheFootstepsof the U.S.Model ............................................................... 252

J. Aguado-Romero, A. M. López-Hernández and S. Vera-Ríos

ABSTRACT. In Spain contract auditing has been applied since 1988 to determine the final cost of defense procurement contracts. In this respect, the Spanish Department of Defense takes the US methodology as a reference model, and therefore it may be useful to study the degree of convergence between the two models. The main objective of this paper is to analyze the degree to which the US contract auditing model for the procurement of defense materiel has influenced the system applied in Spain. Accordingly, the comparative method is used to highlight the main features of the contract auditing models used by the Spanish and the US Departments of Defense. The results obtained show that the methodology used by Spain is not an original approach, but that there is only a low degree of convergence with the US model.

ABSTRACT. This paper examines the role of theory in public procurement research. Theoretical rigour is integral to management science, yet little is known on the extent and form of theory in public procurement. With the field starting to mature, addressing this issue is timely. From conducting a systematic literature review we find that 29 percent of articles are theoretically grounded, with the incidence of theory having increased in recent years. Economic, sociological, psychological, and management theories are all in evidence, but micro-economic theories predominate. Our findings also show that survey reporting and case studies account for almost half of all studies; procurement research is focused on organizational-level aspects more than regulatory-policy issues or public buyers; and studies to date have largely emanated from the North American and European regions. The contribution of this paper lies in clarifying the theoretical underpinnings of public procurement. Out of this we highlight the need for greater theoretical rigour, point to the under-use and even absence of theories that could have high validity and utility, and suggest a narrowing of research foci.

ABSTRACT. Knowledge-based services (KBS) comprise a major portion of services acquired by public organizations. However, their procurement is not well managed; consequently, inefficiencies abound. Therefore, this study explores whether and how KBS can be sourced more efficiently by examining best practices and precepts from knowledge management theory. A spend analysis of one agency’s spend is used to identify the types of KBS procured. Interviews from 12 cases are then used to identify best practices and cost drivers in sourcing KBS. Twenty one recommendations for improving efficiency in sourcing KBS are offered. The findings suggest that potential is available from demand reduction strategies, and that public policy governing the procurement of knowledge is needed. The research concludes with theoretical implications and suggestions for future research.

ABSTRACT. The single-most important parameter of a public procurement system is the threshold above which the framework applies. The optimization problem consists of finding a reasonable trade-off between the gains from public procurement and the administrative costs associated with procurement rules. In the present study, based on a sample of central and local government procurement operations in Sweden, an optimal threshold value in the range of 5,000–6,000 EUR is computed based on the requirement that the average gain should supersede the average cost. If a larger proportion of procurements is required to gain from the regulation imposed, a threshold value of 20,000–25,000 EUR should apply. The general conclusion is that there are strong arguments for maintaining procurement rules below the European Union threshold.

ABSTRACT. The single-most important parameter of a public procurement system is the threshold above which the framework applies. The optimization problem consists of finding a reasonable trade-off between the gains from public procurement and the administrative costs associated with procurement rules. In the present study, based on a sample of central and local government procurement operations in Sweden, an optimal threshold value in the range of 5,000–6,000 EUR is computed based on the requirement that the average gain should supersede the average cost. If a larger proportion of procurements is required to gain from the regulation imposed, a threshold value of 20,000–25,000 EUR should apply. The general conclusion is that there are strong arguments for maintaining procurement rules below the European Union threshold.

ABSTRACT. This paper examines the role of theory in public procurement research. Theoretical rigour is integral to management science, yet little is known on the extent and form of theory in public procurement. With the field starting to mature, addressing this issue is timely. From conducting a systematic literature review we find that 29 percent of articles are theoretically grounded, with the incidence of theory having increased in recent years. Economic, sociological, psychological, and management theories are all in evidence, but micro-economic theories predominate. Our findings also show that survey reporting and case studies account for almost half of all studies; procurement research is focused on organizational-level aspects more than regulatory-policy issues or public buyers; and studies to date have largely emanated from the North American and European regions. The contribution of this paper lies in clarifying the theoretical underpinnings of public procurement. Out of this we highlight the need for greater theoretical rigour, point to the under-use and even absence of theories that could have high validity and utility, and suggest a narrowing of research foci.

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