Continuing Costs: The Impact of Continuing Resolutions on Federal Contracting

Are there unintended consequences from Congress’ use of continuing resolutions (CRs), which are designed as short-term funding to bridge the period before regular appropriations are completed? During a CR, agencies are restricted in their ability to issue contracts, and after the CR ends, agencies may rush to complete their contracting before the fiscal year ends. To expedite contracting, we hypothesize that CRs encourage agencies to use sole-source contracts, rather than on a competitive basis, as well as to use cost-reimbursement contract designs, rather than fixed-price contracts. The Obama Administration found that these contracting practices result in “wasted taxpayer resources, poor contractor performance, and inadequate accountability for results . . .” We anticipate that the longer a CR is in effect, the greater the incentive to use sole-source contracts and cost-reimbursement contract designs. There are implications both for future attempts at contracting reforms, as well as for efforts to establish automatic CRs.

Drivers and differentiators: a grounded theory study of procurement in public and private organizations

Purpose The purpose of this study is to examine procurement professionals’ perceptions of public-private partnerships in contract arrangements and to explore decision-making that takes place in the contracting process. Design/methodology/approach A grounded theory approach is applied to Simon’s (1947) model of decision-making to better understand the perceptions of procurement professionals, especially because it pertains to public vs private sector contexts. The researchers collected data by conducting interviews and observing a compliance webinar of federal contracting employees. Findings The results show that in the decision-making process, Simon’s illustration of a means-end hierarchy is applicable for procurement decision-making because it is driven by activities that are evaluated using aims established by the organization. Practical implications The implications are that, in the procurement decision-making process, a means-end hierarchy is driven by the activities that are evaluated using aims established by the organization. Essentially, the activities are associated to a mean, a mean is associated to a sub-goal and the sub-goal supports the main aim of the organization. Social implications This study supports the notion that training, information and procedures are a way for organizations to control behaviors and promote consistent results from their subordinates. Originality/value This study contributes by examining the drivers of procurement decision-making. Despite previous literature that focuses on practitioner discretion or emphasizes on socio-economic factors, this study highlights the linkages between practitioner decision-making and organizational aims and objectives. As such, the paper serves to illustrate the vital connection between procurement activities and outputs.

“American Matrons and Daughters”

Judith Giesberg explores the intersection of national loyalty debates and the labor activism of Philadelphia seamstresses in war industries. Women workers understood the vital service they performed sewing military uniforms and equipment but were largely exploited and vulnerable in a system of federal contracting reliant on middle-men and “outwork.” Giesberg argues that the exploitation of women workers, and the denigration of their labor activism, rested on an idealized depiction of female patriotism in supporting roles, as soldiers’ wives and family. Working class women turned the rhetorical tables by laying claim to their own service and patriotism, legitimizing their protests in a republican language of rights and tyranny. In examining seamstresses’ protests at the Schuylkill Arsenal, Giesberg uncovers a forgotten chapter in American labor history, connecting antebellum activism with Gilded Age strife. The author depicts a brief window of opportunity where women challenged the formative stage of the sweatshop system drawing in part on professions of their own loyalty.

Reducing risk and leveraging markets: The impact of financial structure on federal contractor performance

This paper analyzes how financial controls, as established through the payment structure, are used and whether they influence federal contractor performance. These payment structures include variants on three primary types of contract: firm fixed-price, cost-reimbursement, and time-and-materials. Each of these payment structures creates different performance incentives for contractors, provides government contract managers with varying levels of information on contractor activities, and alters the dispersion of risk between the partners. The Federal Acquisition Regulation (FAR) prefers fixed-price contracts whenever possible, as they theoretically place the risk on the contractor, who is required to finish the work for the allocated price. Based on an analysis of nearly 25,000 federal definitive contracts that concluded between 2005 and 2014, findings indicate federal contracting officials tend to use payment structures in expected ways: to limit exposure to risk, leverage market forces, and reduce transaction costs when possible. Findings also show that there are important performance differences between contracts that use different financial structures, even when accounting for information asymmetries, asset specificity, and the complexity of the contracted work. Cost-reimbursement contracts are highly correlated with early contract termination.