Monitoring arrangements for outsourced public services: the importance of service characteristics for the distribution of oversight responsibilities

Anguelov, Lachezar G.

doi:10.1080/10967494.2019.1692114

Cited by 13 publications

(13 citation statements)

References 41 publications

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“…Recent research on complex contracting suggests that contracting officials need to strike a balance between granting discretion to the contractor and creating enough structure to hold them accountable for their performance (Anguelov 2020; Brown, Potoski and Van Slyke 2013). Repeated interactions may be one way to improve trust under these conditions (Brunjes, 2020), but this can only be done if competition requirements are either changed or overlooked.…”

Section: Discussionmentioning

confidence: 99%

Your Competitive Side Is Calling: An Analysis of Florida Contract Performance

Brunjes

2021

Public Administration Review

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Competition over the allocation of scarce resources motivates many public policy choices, and increasingly influences the management of public organizations. With the rise of the business‐like approach espoused by adherents of “new public management,” competitive mechanisms are increasingly used in the public sector to improve organization and program performance. Despite the wide acceptance of competition as a viable method to improve public management, little large n empirical work has been done to determine whether competition improves performance, especially in the networked, cross‐sectoral setting of modern governance. Analyzing nearly 20,000 Florida contracts over a three‐year period, this research explores whether competitive sourcing procedures lead to improved contractor performance. Results show that competitive sourcing may be associated with higher contract spending and undesirable contract outcomes. Other factors, including experience, existing relationships, and lower transaction costs, are more likely to lead to better performance. Practitioner Points Competition is theorized to drive down costs, encourage innovation, and help hold contractors accountable for their work. Competitively sourced contracts are more likely to experience cost overruns and to terminate early than noncompetitive contracts, suggesting that competition may not always be the best approach. Instead, agency‐contractor relationships and goal alignment are better predictors of good performance.

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Section: Discussionmentioning

confidence: 99%

Your Competitive Side Is Calling: An Analysis of Florida Contract Performance

Brunjes

2021

Public Administration Review

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“…These factors are sometimes referred to as the sources of transaction costs in that their presence increases the likelihood the contract will deliver less value or fail all together (Petersen et al, 2019). When such transaction cost factors are stronger, buyers and sellers need to spend more on exchange activities to prepare, negotiate, execute, and manage the exchange, lest they end up with lost value or a failed exchange (Anguelov, 2020; Bowen & Jones, 1986; Clemons et al, 1993; Geyskens et al, 2006). Transaction cost expenditures are the actual financial outlays to cover the costs of these exchange activities (De Schepper et al, 2015; Petersen et al, 2019).…”

Section: Organizational Form and Exchanges: Governments Firms And Tra...mentioning

confidence: 99%

“…Negotiation costs are the resources expended to agree to exchange terms, such as price and quality, and to transfer the resources between the parties (Barthélemy & Quélin, 2006). Monitoring costs are the resources expended to verify whether the product meets the agreement's terms (Anguelov, 2020; Romzek & Johnston, 2002). Enforcement costs are the resources expended to rectify any deficiencies in the contract relationship (Melese et al, 2007; Wynstra et al, 2018).…”

Section: Organizational Form and Exchanges: Governments Firms And Tra...mentioning

confidence: 99%

Same product, different price: Experimental evidence on the transaction cost expenditures of selling to governments and firms

Petersen

Potoski

Brown

2022

Public Administration Review

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Whether governments pay more than firms when contracting has been an important and stubbornly vexing question in public management. One challenge has been finding ways to credibly compare the costs of engaging in market transactions with governments versus firms. In this paper, we systematically compare the costs of contracting when governments and firms buy the same product under the same circumstances. Using data from a randomized experiment of Danish firms, we examine selling firms' transaction cost expenditures when selling the same product to governments and other firms. We find that firms estimate spending about 34 percent more on transaction cost expenditures when selling to governments than when selling the same product to firms. Experience in selling to governments is associated with lower transaction cost expenditures, suggesting that learning can reduce firms' costs of selling to governments and firms.

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“…According to Elinder and Jordahl (2013), outsourcing of public services is commonly explained exclusively in terms of economic efficiency. However, governments have multiple objectives when providing services, which includes considering several other issues, such as the level of information security (Hsu et al , 2018); enhancing flexibility and the quality of the workforce (Tjader et al , 2010); the gain in benefits to the population and the impact of outsourcing on public policies (Soni et al , 2016); the impact on quality performance and the experience of suppliers (Aboelmagd, 2018); and the supervision of the contracts (Anguelov, 2019).…”

Section: Introductionmentioning

confidence: 99%

“…Although outsourcing is a universal concept, its understanding and application may differ from one country to another (Mohammad, 2020). However, there is a predominance of studies that address real cases of outsourcing in the public sector in developed countries, such as countries in Europe and the USA (Alonso et al , 2017; Anguelov, 2019; Brien and Hine, 2015; Dalton and Warren, 2016; Ignone et al , 2013; Monteduro and Allegrini, 2020). The noticeable characteristics of emerging countries include rapid changes in the economic, political and social spheres (Wu, 2013) and require specific studies, such as Nakambale and Bangalee (2022) in Namibia, Africa.…”

Section: Introductionmentioning

confidence: 99%

Guidelines for public sector managers on assessing the impact of outsourcing on business continuity strategies: a Brazilian case

Aragão

Fontana

2022

JGOSS

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Purpose This paper aims to propose guidelines for public sector managers in assessing the impact of outsourcing on business continuity (BC) strategies. This paper evaluated how public managers from the state of Pernambuco, Brazil, perceive outsourcing, considering BC and how it relates to the outsourcing of services and activities. Design/methodology/approach Theoretical lenses of outsourcing and BC were used to derive the study hypotheses. A questionnaire was drawn up to collect information to test the hypotheses. To test the proposed hypotheses, binary logistic regression was used through an empirical analysis of a sample of 51 Brazilian public managers. Findings This study found that when the public sector suffers from negative impacts of financial restrictions, outsourced services are the first ones to receive the negative impacts. This has had an adverse impact on BC in the public sphere. On the other hand, the authors verified that the public sphere’s capacity for resilience and the existence of specific methodologies to support public managers in outsourcing decision-making can contribute to BC. Research limitations/implications This study assists public organizations to take advantage of internal outsourced services in the best possible way, making better use of public resources, gaining social legitimacy and legitimacy also in the provision of public services. However, each public sector can present different risks of non-continuity, and this aspect could not be considered in this research as well. Originality/value This study is a pioneer in highlighting the relationships between outsourcing strategies and BC in public services in Brazil. Through the guidelines discussed in this study, public managers could develop a more effective response to the implications of post-outsourcing budget constraints. In addition, the findings of this paper add to an understanding of the importance of business strategies for public services continuity and seek to help reduce uncertainties and better inform the government decision-making process.

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Monitoring arrangements for outsourced public services: the importance of service characteristics for the distribution of oversight responsibilities

Cited by 13 publications

References 41 publications

Your Competitive Side Is Calling: An Analysis of Florida Contract Performance

Your Competitive Side Is Calling: An Analysis of Florida Contract Performance

Same product, different price: Experimental evidence on the transaction cost expenditures of selling to governments and firms

Guidelines for public sector managers on assessing the impact of outsourcing on business continuity strategies: a Brazilian case

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