The impact of industry consolidation on government procurement: Evidence from Department of Defense contracting

Carril, Rodrigo; Duggan, Mark

doi:10.1016/j.jpubeco.2020.104141

Cited by 38 publications

(23 citation statements)

References 30 publications

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“…If scale does turn out to be critical to success, the organizations most capable of producing competitive foundation models will be the most well-resourced: venture-funded start-ups, already-dominant tech giants, and state governments. This raises potential concerns about market concentration, and might indicate the kind of incumbent monopoly or oligopoly that currently exists in extreme capital-intensive industries such as defense and semi-conductor manufacturing [Carril and Duggan 2020].…”

Section: Homogenization and Scalementioning

confidence: 99%

On the Opportunities and Risks of Foundation Models

Bommasani¹,

Hudson²,

Adeli³

et al. 2021

Preprint

653

652

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AI is undergoing a paradigm shift with the rise of models (e.g., BERT, DALL-E, GPT-3) that are trained on broad data at scale and are adaptable to a wide range of downstream tasks. We call these models foundation models to underscore their critically central yet incomplete character. This report provides a thorough account of the opportunities and risks of foundation models, ranging from their capabilities (e.g., language, vision, robotics, reasoning, human interaction) and technical principles (e.g., model architectures, training procedures, data, systems, security, evaluation, theory) to their applications (e.g., law, healthcare, education) and societal impact (e.g., inequity, misuse, economic and environmental impact, legal and ethical considerations). Though foundation models are based on standard deep learning and transfer learning, their scale results in new emergent capabilities, and their effectiveness across so many tasks incentivizes homogenization. Homogenization provides powerful leverage but demands caution, as the defects of the foundation model are inherited by all the adapted models downstream. Despite the impending widespread deployment of foundation models, we currently lack a clear understanding of how they work, when they fail, and what they are even capable of due to their emergent properties. To tackle these questions, we believe much of the critical research on foundation models will require deep interdisciplinary collaboration commensurate with their fundamentally sociotechnical nature.

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Section: Homogenization and Scalementioning

confidence: 99%

On the Opportunities and Risks of Foundation Models

Bommasani¹,

Hudson²,

Adeli³

et al. 2021

Preprint

653

652

View full text Add to dashboard Cite

show abstract

“…66Examples include awarding design (Decarolis, 2018), wasteful end‐year spending (Liebman & Mahoney, 2017), buyers' role (Best et al, 2017; Decarolis et al, 2021, 2020), external audits (Gerardino et al, 2017), industry consolidation (Carril & Duggan, 2020), and the effects of centralized purchase agreements (Bandiera et al, 2009). …”

mentioning

confidence: 99%

Supplier selection and contract enforcement: Evidence from performance bonding

Giuffrida

Rovigatti

2022

Economics Manag Strategy

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We analyze an important but little‐studied institution for balancing supply risk in the management of procurement operations: performance bonding. By adding the surety as a third party that guarantees contract fulfillment between supplier and buyer, performance bonding aims to streamline the purchasing process by influencing both contractor selection in the bidding phase and contract enforcement during project execution. Using the data on US government procurement from 2005 to 2015 and exploiting an exogenous variation in the threshold for its application to construction contracts, we find that performance bonding improves contract outcomes by 10.5% and 3.7% in terms of delays and extra costs, respectively. Net of bond premia, which by law are included in the award amounts, this effect translates into savings of about 4% in the budget for federal construction projects and 16% for mid‐size projects. We provide suggestive evidence on the effectiveness of selection and monitoring by sureties as driving channels.

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“…Second, the procurement of R&D at DoD is a very different acquisition process than that for goods or services, which is studied, for instance, in Carril and Duggan ( 2020 ). Strategic decisions are taken throughout all acquisitions stages, from planning to award, from administration to ex‐post oversight.…”

Section: The Dod Procurement Organizationmentioning

confidence: 99%

“… 5 See Carril and Duggan ( 2020 ) for a recent study of the DoD's procurement practices involving non‐R&D outcomes. …”

Section: Endnotesmentioning

confidence: 99%

“…An alternative outcome measure could be the award of a follow-on contract, as this can provide useful information on the success of an R&D contract(Che et al, 2021). Unfortunately, however, FPDS data do not allow us to link it to the original contract to follow-on contracts.5 SeeCarril and Duggan (2020) for a recent study of the DoD's procurement practices involving non-R&D outcomes.6 For a review of this type of identification strategy see the recent application by Jäger (2017).7 In a review of eleven major defense acquisition programs, GAO (2019b) found that the program workforce size and composition were influenced by the degree to which the program assumed responsibility for technical development and integration, as well as the program's DECAROLIS ET AL.…”

mentioning

confidence: 99%

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

Decarolis

Rassenfosse

Giuffrida

et al. 2021

Economics Manag Strategy

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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.

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The impact of industry consolidation on government procurement: Evidence from Department of Defense contracting

Cited by 38 publications

References 30 publications

On the Opportunities and Risks of Foundation Models

On the Opportunities and Risks of Foundation Models

Supplier selection and contract enforcement: Evidence from performance bonding

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

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