Performance-based contracting in public procurement of developing countries

Abstract

PBC is becoming an interesting topic and draws the attention of many researchers. This is evident in the fact that the number of research outputs has been increasing for the last decade. However, comprehensive and systematic review of previous research indicates that the research outputs pertinent to the topic are limited to specific 14 sectors and areas. More importantly, the research results do not clearly show whether the findings will work in the context of developing countries. This sector and area-specific empirical research outlook hinders the development of a general theoretical framework for PBC.Thus, it confirms that this research area is still under-theorized and needs more research and investigation, especially as regards its applicability in the context of developing countries.

Corruption, accountability, and discretion of procurement officials: An analysis of selection Preferences for Performance-based Evaluation Criteria (PBEC) in PPP procurement

“…As an important way to improve procurement performance [3][4][5][6], performance-based procurement has been widely used in jurisdictions such as the United States [7], the United Kingdom [5,8], the World Bank [9], and the African Development Bank [10]. In performance-based procurement, the contractor is paid only for achieving the agreed results, not for the inputs and activities [11]. Correspondingly, PPP procurement is a typical performance-based procurement.…”

An Empirical Study of Determinants of Pay-for-Performance in PPP Procurement

“…According to principal-agent theory, the key to overcoming agency costs is to design incentive contracts to change the incentives of agents, and the payment mechanism is a key element of incentive contracts because it defines the system of incentives and risks that are transferred to contractors [5][6][7]. Under pay-for-performance, the government pays only for the outputs and outcomes rather than the inputs and activities [8][9][10][11]. Thus, pay-for-performance can effectively motivate suppliers to improve service quality [12][13][14] and enable them to focus more on cost-effectiveness and the public interest [15].…”