Volume 2, Number 2, 2002

CONTENTS

A Strategy for Firms Facing Offset Obligations: A Case of Maryland ................................................................................... 157
T. K. Taylor

Choosing the Open or the Restricted Procedure: A Big Deal or a Big Deal?........................................................................ 187
G. Heijboer & J. Telgen

The Economic Context of Government Procurement: New Challenges and New Opportunities........................................... 216
G. Callender & D. Mathews

The Market's Response to Contract Award Announcements: Government Versus Corporate Contracts ............................. 237
S. J. Larson & A. Picou

County Use of the RRP Process to Select Joint Venture Developers of Water-View Property: Aa Case Study ................... 252
D. H. Herbold

Procurement Reform in the Ghana Health Sector ................................................................................................................. 261
R. Verhage, J. v.d. Gronden, K. Awanyo & S. Boateng


USEFUL REPRINTS

State Department: Sale of Unneeded Overseas Property Has Increased, but Further Improvements Are Necessary.......... 270
U.S. General Accounting Office

 

BOOK REVIEW

Public Procurement ................................................................................................................................................................ 291
X. H. Thai

ABSTRACT. In 1996, GAO reported that the State Department did not have an effective process for identifying and selling unneeded overseas real estate, and that decisions concerning the sale of some properties had been delayed for years because of parochial conflicts among the parties involved. The State Department has taken steps to implement a more systematic process for identifying unneeded properties by (1) requesting posts to annually identify excess, underutilized, and obsolete property and (2) requesting its own staff and Inspector General officials to place greater emphasis on identifying such property when they visit posts. The State Department has significantly increased its sales of unneeded properties in the last 5 years. From 1997 through 2001, it sold 104 overseas properties for over $404 million, almost triple the proceeds compared with the previous 5-year period. However, the department still has a large number of unneeded properties that have not yet been sold. The State Department has not effectively implemented recommendations made by the Real Property Advisory Board to sell unneeded property. State has disposed of only 7 properties of the 26 recommended for sale by the board.

ABSTRACT. Using some experiences in the USA, the United Kingdom and Australia, this paper illustrates the nature of some contractual challenges that can be expected to transform the sophistication of the procurement role in government to ensure the demands of public accountability continue to be met.

ABSTRACT. In most countries procurement is undervalued compared to the attention paid to other key areas of Public Sector Reforms. Ghana represents a case in point. Under the health reforms in Ghana, the Ministry of Health and its partners (donors, financing institutions and the private sector) recognized the importance of procurement in its Medium-Term Health Sector Strategy for Ghana 1997 to 2001. With the aid of an external consultant, using a highly participatory approach in the development, training, and the implementation of new structures and procedures, good results have been achieved. Although work is ongoing and important challenges still need to be addressed, the authors argue that the new procurement structures now in place can serve as an example of a standardized support system for health reforms.

ABSTRACT The legislation in the European Union (EU) regarding contracts to be awarded to third parties allows for a free choice by public agencies between the open and restricted procedure. Empirical evidence shows a high variance in the preference for one of the procedures exists between countries. This preference may be based on cultural phenomena only. Here we develop a quantitative model to calculate which procedure is the most economic. With insights from this model guidelines are given for an efficient policy regarding the choice for the open or restricted award procedure.

ABSTRACT. Requests for Proposals (RFPs) are typically issued to solicit competitive proposals for a variety of professional services and commodities. The Baltimore County Purchasing Bureau issued 30 RFPs in fiscal year 2001 as well as 550 requests for formal and informal bids. The use of RFPs and the RFP process for choosing a land developer was creative. The fact that the property to be developed impacted the quality of life of the neighboring residents made their buy-in to the project critical. Therefore, it was prudent to include community representatives in the proposal selection process. This article identifies the unique issues on an RFP for the sale of real property rather than the purchase of services or commodities.

ABSTRACT. Offsets are contracts that require the seller to provide extra benefits to the purchasing government's economy as a condition for the sale of goods and services. The federal government of the United States does not have an offset policy for procurement. Nor does it intervene in private markets where U.S. firms often face steep offset obligations. Although there have been calls for unilateral government intervention, the U.S. is currently engaged in multilateral discussions with other industrialized nations aimed at reducing or limiting offset bids. The reality in most of the relevant markets is that buyers command significant bargaining power and multilateral talks are likely to fail. This paper offers another approach for firms (in any country) facing offset requirements and presents a case study from the state of Maryland (USA) that demonstrates how cooperation between local firms and the state government can reduce the offset burden at a surprisingly small marginal cost. The case study provides micro-level data and follows several transactions from the initial negotiation stage through offset fulfillment. The analysis details the costs and benefits of this strategy, and the requirements for such a program to be successfully implemented.

ABSTRACT. This paper examines the effects of contract award announcements on the stock returns of successful grantees. Contract awards are identified using Lexis/Nexis and classified according to whether the grantor is another corporation or government body. The government grantors are further classified according to the type of government entity granting the contract. Four subsamples emerge: federal (non-military), military, municipal, and foreign. The results suggest that contract awards granted by foreign governments are more lucrative than contract awards granted by corporations or American governmental bodies. This finding endures even after controlling for potentially confounding factors.

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