Performance-based contracting: Are we following the mandate?

Buchanan, N. S.; Klingner, Donald E.

doi:10.1108/jopp-07-03-2007-b001

Cited by 23 publications

(38 citation statements)

References 2 publications

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“…The literature identified by this review suggests that alliance contracting, prime contracting and outcome‐based contracting are undertheorized areas. Much of the literature is normative in basis, does not consider issues from a theoretical perspective, and does not give empirical evidence (Gallet et al ; O'Flynn et al ; Chen et al ; Buchanan and Klinger ). A recent growing literature is concerned with identifying the applicability of these models to the NHS in the light of the current policy literature (e.g.…”

Section: Methodsmentioning

confidence: 99%

“…The literature is surprisingly light on evidence relating to the benefits of these new contractual approaches, and a number of studies conclude that it is difficult to draw any conclusions in this regard due to difficulties with attribution and measurement (Caldwell and Howard ; Buchanan and Klinger ; Henneveld ; Bresnen and Marshall ; Love et al ). This may reflect the complexity of these contractual models and of the environment in which they are deployed, which leads to difficulties in directly attributing changes in performance to these models.…”

Section: Analysis Of the Literaturementioning

confidence: 99%

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New Models of Contracting in the Public Sector: A Review of Alliance Contracting, Prime Contracting and Outcome‐based Contracting Literature

et al. 2017

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The coordination of public services is an enduring challenge and an important policy priority. One way to achieve collaboration across organizational boundaries, which is being considered in public services such as the English National Health Service (NHS), is through the adoption of alliance contracting, prime provider contracting and outcome-based contracting. This article reviews the cross-sectoral literature concerning the characteristics of these new contractual models, how they function, their impact, and their relation to public sector governance objectives. These new contractual forms are characterized as models which, in line with the New Public Management (NPM)/post-NPM agenda, seek to incentivize providers through the transfer of risk from the commissioners to the providers of services. Key findings are that the models are likely to incur high transaction costs relating to the negotiation and specification of outcomes and rely heavily on the relational aspects of contracting. There is also found to be a lack of convincing cross-sectoral evidence of the impact of the models, particularly in relation to improving coordination across organizations. The article questions the reconciliation of the use of these new contractual models in settings such as the English NHS with the requirements of public sector governance for transparency and accountability. The models serve to highlight the problems inherent in the NPM/post-NPM agenda of the transfer of risk away from commissioners of services in terms of transparency and accountability.

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Section: Methodsmentioning

confidence: 99%

Section: Analysis Of the Literaturementioning

confidence: 99%

New Models of Contracting in the Public Sector: A Review of Alliance Contracting, Prime Contracting and Outcome‐based Contracting Literature

et al. 2017

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“…Room for alternative technical options is created favoring innovation. Other concepts related to functional specifications are value-driven procurement (Dumond 1996), performance-based contracting (Buchanan and Klingner 2007), and outcome-based contracts (Ng, Maull, and Yip 2009). A common theme in all of these concepts is the focus on specifying value and benefits gained from the procured product or service instead of defining its technical design.…”

Section: Public Procurement Of Innovation and Services Public Procurementioning

confidence: 99%

Can service innovations be procured? An analysis of impacts and challenges in the procurement of innovation in social services

Pelkonen

Valovirta

2015

Innovation: The European Journal of Social Science Research

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This paper addresses the challenges that arise when service innovations are being promoted through public procurement. The academic and policy debate on public procurement of innovation has recently been very vivid, but it has mostly focused on procurement of technologies and tangible goods while considerably less attention has been paid to public procurement of innovation in services. By drawing on conceptual tools from the literature on service innovation and public procurement of innovation, the paper examines an empirical case of procurement of social services for substance abusers carried out by the city of Helsinki, Finland. In particular, the article analyzes whether the characteristics of services and service innovation are compatible with processes and requirements of public procurement. The article shows that service innovations can be procured, but the features of services and service innovation such as intangibility, interactivity, and difficulty to measure the impacts of new services affect the procurement process and set particular requirements for it.

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“…Also, the payment system may include 'dead zones', indicating acceptable levels of performance for which suppliers are neither penalised nor extra-rewarded [28]. The incentive structure is of critical importance to suppliers who are whether or not willing to bear risks and sign a performance-based contract [29]. In addition, contractors could be tempted to accept irresponsible risks in case of premium payments [4].…”

Section: Pbc and Infrastructure Maintenancementioning

confidence: 99%

Contracting for Road Maintenance in the Netherlands—The Downside of Performance-Based Contracting

2019

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A trend towards performance-based contracting (PBC) can be observed in public infrastructure maintenance. PBC is an approach of tying the contractor’s payment to specified performance. We investigated PBC for the maintenance of highways and roads in the Netherlands, identifying issues ultimately resulting in poor contractor performance. The PBC-induced risks for clients relate to the problematic translation and measurement of specifications, the ineffectiveness of incentives, the avoidance of contractors taking full responsibility, and contract management issues. Clients should recognize the actual balance of power in the relationship with their (main) contractors, and take appropriate measures.

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Performance-based contracting: Are we following the mandate?

Cited by 23 publications

References 2 publications

New Models of Contracting in the Public Sector: A Review of Alliance Contracting, Prime Contracting and Outcome‐based Contracting Literature

New Models of Contracting in the Public Sector: A Review of Alliance Contracting, Prime Contracting and Outcome‐based Contracting Literature

Can service innovations be procured? An analysis of impacts and challenges in the procurement of innovation in social services

Contracting for Road Maintenance in the Netherlands—The Downside of Performance-Based Contracting

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