Volume 15, Number 4, Winter 2015

Public Infrastructure Procurement: A Review 0f Adversarial and
Non-Adversarial Contracting Methods .......................................................  405
M. Regan, P. E.D. Love and J. Smith

M. V. Kidalov

The Enlightenment Underpinnings of the Public Procurement Profession..................................................................................................   439
W. E. Klay
 
Public Procurement Reforms in Greece: The Impact of Improved
Transparency on Government Expenditures ...........................................    458
I. Giotopoulos, G. Pavlou, S. Danchev, and A. Tsakanikas
 
The Role Of Accountability In Federal Acquisition: A Search for Context ....................................................................................................    514
D. Fox and J. C. Morris

The issue of accountability in the federal government’s acquisition process has been the topic of much discussion and investigation. While few argue that accountability is unimportant, it remains largely unexplored in the context of the acquisition process. This paper seeks to examine the acquisition process in some detail, and analyze the role of accountability in that process. We conclude with some broader observations about accountability in federal acquisition, and directions for future research.

Enlightenment philosophers profoundly influenced the emergence of democracy. Enlightenment ideas underlie much of the theory and practice of public procurement today. Economic theory, dating from the writings of Adam
Smith and his mentor Frances Hutcheson, assumes that suppliers will act in their own self interest. Knowing this, public buyers seek to fashion incentives to align the private interests of suppliers with public needs. But Hutcheson and others argued that civic duty and benevolence should guide public servants in seeking value for their fellow citizens. That argument is the basis of our codes of ethics. The clams of public procurement to being a profession will be greatly bolstered when it is recognized that our knowledge base is rooted in the same Enlightenment thinking that undergirds other professions and academic disciplines.

The current paper explores the effect of private market characteristics on the access of small and medium enterprises (SMEs) to public markets in some sectors. Using survey data of small and medium enterprises in the pharmaceutical sector in Egypt, we confirmed this effect. We found that regulations of drugs pricing and registration in the private market constrained the capacity of those firms to compete in the public markets. However, some other factors play it the other way. The policy implications of these findings indicate that governments need to account for private markets characteristics when designing support packages for smaller enterprises in public procurement markets.

Adversarial contracting methods are used for most public infrastructure procurement and timely delivery on budget remains a problem. In the past 20 years, OECD countries have adopted a number of alternative procurement methods that are based on collaborative principles including public private partnerships, long-term outsourcing arrangements and relationship/alliance contracts. We review the theoretical principles that operate for both adversarial and collaborative contracting methods. We identify the characteristics of non-adversarial contracting methods such as the output specification, qualitative selection criteria, the alignment of incentives, discrete allocation of residual control rights, life cycle costing, and risk-weighted value for money measurement that are delivering better procurement outcomes for government.

During the recent economic crisis, public procurement reforms have received a great attention as a key mechanism that enables significant cost savings and improves transparency in the public sector, particularly in countries which are under a process of extensive fiscal consolidation like Greece. This paper examines the effects of improved transparency on public procurement cost in the light of the ongoing structural reforms taking place in Greece. The basic finding indicates that ensuring transparent practices in public procurement processes reduces government expenditures by about 1.8 - 3.4 percentage points. A dataset on 2309 public supply contracts for goods was used, supplementing the pooled OLS estimates with quantile regressions.

Go to top