The Value of the Relationship Model of Contracting in Social Services Reprocurements and Transitions: Lessons from Massachusetts

Beinecke, Richard H.; DeFillippi, Robert

doi:10.2307/3380932

Cited by 27 publications

(20 citation statements)

References 4 publications

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“…Devising sophisticated monitoring tools may neither be a readily feasible option nor an effective method to control agents in this case. Some scholars argue that such situations are amenable to relational types of contracting where principals and agents seek mutual trust and attempt to reduce transaction costs and agent shirking by adopting frequent and informal communications and coordination, rather than relying on intensive formal documents and legal means as ways to manage contracts (Beinecke & DeFillippi, 1999;Sclar, 2000;Poppo & Zenger, 2002;Lee & Cavusgil, 2006). Scholars adopting stewardship theory forward a similar contention when explaining nonprofit related contracts (Van Slyke, 2007;Marvel & Marvel, 2009).…”

Section: Vendor Governance Structure: Seeking Goal Congruencementioning

confidence: 92%

Redesigning the Hollow State: A Study of Florida Child Welfare Service Reform through the Lens of Principal-Agent Theory

Lamothe

2011

International Journal of Public Administration

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While principal-agency theory has greatly facilitated our understanding of governance and management in the hollow state, close examinations of how system designs affect agency problems has been rare. The purpose of this study is to explicitly investigate the effects of different contract configurations on agent shirking, which is a common problem in third-party service delivery arrangements. Florida's recent statewide privatization and reconfiguration of its child welfare service delivery system are analyzed for this purpose. Data were collected through intensive document reviews and interviews with the public managers and the contract agents who were involved in the reform. Major structural components of the redesigned system (such as overall contract configuration, procurement policies, oversight mechanism, payment methods, and vendor governance structures) are examined and compared with those of the old system. The results of the analysis suggest that the Florida reform installed several structural devices intending to curb agent shirking that plagued the old system. The most significant changes involve a transition of the contracting scheme from a fragmented quasimarket based on dyadic contracting to an integrated service network based on a managed care model, a shift of the focus of the contract oversight from compliance and process to service outcomes, and a transfer of programmatic and financial risks and uncertainties from the government to vendors. Further, the findings of the study reveal some unintended consequences of the reform. For example, the reconfigured system that empowers communities also promotes local parochialism that hinders the government's statewide policymaking ability. The reform that consolidates contracts into the hands of a few large vendors under a standardized contract management system unites the vendors around their common interests to confront their government principal.

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Section: Vendor Governance Structure: Seeking Goal Congruencementioning

confidence: 92%

Redesigning the Hollow State: A Study of Florida Child Welfare Service Reform through the Lens of Principal-Agent Theory

Lamothe

2011

International Journal of Public Administration

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“…Given the number of potential providers, they can choose those with the lowest costs. It is reasonable to adopt contracting-out mechanisms instead of providing services in house in order to adjust to external environments (Beinecke & DeFillippi, 1999;Gargan, 1981;Mehay & Gonzalez, 1985;Savas, 1987). When faced with a decrease in budget or human resources, local governments must find alternatives to supplement their organizational capacity.…”

Section: What Is Meant By Organizational Capacity?mentioning

confidence: 99%

Illuminating the in-house provision of emergency services: A test of organizational capacity hypotheses

Jung

Andrew

2014

International Review of Public Administration

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While much has been written about the importance of organizational capacity, few have examined systematically the influence of organizational capacity on local service delivery arrangements. This paper highlights the importance of organizational capacity in influencing local government decisions to provide services in house in the realm of public safety (e.g., fire, police and emergency medical services). Our empirical study, conducted in Texas, provides evidence that a local government may reduce the risks of contract failure when it produces services in house, especially in the presence of institutionalized evaluation mechanisms. Instead of relying on alternative service providers to acquire, store and move emergency medical supplies and services, local governments are building capacity to better equip themselves to deliver emergency services and plan for disasters.

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“…Regardless of service characteristics, vendor ownership, or jurisdictional capacities, we expect less formal contract writing in areas with weak vendor markets. This is a specific application of the more general argument that market conditions are associated with governance modes in a rather straightforward way-when markets are robust, formal contracting is indicated, when they are weak, relational contracting is expected to be more efficacious (Beinecke and DeFillippi 1999;DeHoog 1990;Sclar 2000). The logic is that competitive markets serve to allow for arms-length, sharp-in/sharp-out contracting since replacing vendors is easy and cheap.…”

Section: The Determinants Of Written Contract Featuresmentioning

confidence: 99%

“…Rather, there is an expectation of ongoing communication and coordination over the lives of such contracts. When problems occur, as they are expected to (Macneil 1978), they are dealt with in ways that focus on salvaging and continuing the relationships and the partners are expected to be adaptable (Beinecke and DeFillippi 1999). One of the major reasons for the focus on cooperation and maintenance of the relationship is that the parties to such contracts often see themselves as essentially dependent upon one another (Sclar 2000).…”

Section: Literature On Governance: Dichotomous or Mixed?mentioning

confidence: 99%

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What Determines the Formal Versus Relational Nature of Local Government Contracting?

Lamothe

2012

Urban Affairs Review

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In this article, we examine the governance structures used to manage local service delivery contracts with an eye toward two specific concerns. First, we contend that public managers likely use dual regimes in which contract writing is more formal in nature than is the management style adopted during contract implementation. We also explore the determinants of such mechanisms. We find some evidence to support our contention in that managers frequently contact and communicate with their vendors despite the presence of clearly and formally written contracts. We further find that the formal versus relational nature of written contract features is influenced by different factors (service characteristics, market conditions, vendor ownership) than is management style (reputation, management capacity, expectations of continuing relationships).

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The Value of the Relationship Model of Contracting in Social Services Reprocurements and Transitions: Lessons from Massachusetts

Cited by 27 publications

References 4 publications

Redesigning the Hollow State: A Study of Florida Child Welfare Service Reform through the Lens of Principal-Agent Theory

Redesigning the Hollow State: A Study of Florida Child Welfare Service Reform through the Lens of Principal-Agent Theory

Illuminating the in-house provision of emergency services: A test of organizational capacity hypotheses

What Determines the Formal Versus Relational Nature of Local Government Contracting?

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