Buyers' role in innovation procurement: Evidence from US military R&D contracts

Abstract

This study provides the first quantification of buyers' role in the outcome of R&D procurement contracts. We combine together four data sources on US federal R&D contracts, follow-on patented inventions, federal public workforce characteristics, and perception of their work environment. By exploiting the observability of deaths of federal employees, we find that managers' death events negatively affect innovation outcomes: a 1% increase in the share of relevant public officer deaths causes a decline of 32.3% of patents per contract, 20.5% patent citations per contract, and 34.3% patent claims per contract.These effects are driven by the deaths occurring in the 6 months before the contract is awarded, thereby indicating the relevance of the design and award stage relative to ex post contract monitoring. Lower levels of self-reported within-office cooperation also negatively impact R&D outcomes.

Supplier selection and contract enforcement: Evidence from performance bonding

“…In the long run, the process might educate and guide excluded firms about the bonding process and prepare them to be more successful in future tenders. 6 Examples include awarding design (Decarolis, 2018), wasteful end-year spending (Liebman & Mahoney, 2017), buyers' role (Best et al, 2017;Decarolis et al, 2021Decarolis et al, , 2020, external audits (Gerardino et al, 2017), industry consolidation (Carril & Duggan, 2020), and the effects of centralized purchase agreements (Bandiera et al, 2009).…”

“…25 The FPDS data is already used and described in the literature. See, for instance, Liebman and Mahoney (2017) and Kang andMiller (2016), andDecarolis et al (2021). 26 Data is gathered by contracting offices of 23 federal agencies.…”

Targeted Bidders in Government Tenders

“…Note that the previously cited papers use slightly different definitions of "in-scope modification." Nevertheless, the results are robust to such changes, as Decarolis et al (2021) finds no different results when using the definition from Kang and Miller (2022).…”

“…Our work is thus also related to the literature that studies the determinants of public procurement efficiency. Examples include awarding design (Decarolis, 2018), wasteful end-of-year spending (Liebman and Mahoney, 2017), the role of buyers (Best et al, 2017;Decarolis et al, 2020Decarolis et al, , 2021, external audits (Gerardino et al, 2017), industry consolidation (Carril and Duggan, 2020), and the impact of centralized purchasing (Bandiera et al, 2009). To our knowledge, our paper is also the first in the economic literature to employ the random forest technique to estimate the propensity score and combine it with an inverseweighted probability regression adjustment.…”

“…Classified contracts are exempt from this requirement. The Department of Defense may report an award within 90 days to protect its operations Carril et al (2022),Decarolis et al (2020),Decarolis et al (2021),Giuffrida and Rovigatti (2022),Kang and Miller (2022),. andLiebman and Mahoney (2017), among others, source their data from the FPDS.…”