A Fresh Take on Government Contract Performance: Linking Social and Technical Factors

Abstract

One critical question addressed by public management scholars is: what are the factors that facilitate high performing government agencies (Rainey & Steinbauer, 1999b)? Contracting for services represents one mechanism to improve the performance of government agencies (Brown & Potoski, 2003; Donahue, 1989; O'Leary, 1996). While research examining contract performance sheds substantial light on circumstances under which contracting achieves intended goals (Amirkhanyan, Kim, & Lambright, 2007; Brown & Potoski, 2003; Kettl, 1993; Sclar, 2000), much of this research examines how either human factors (e.g. trust between contracting partners) or technical factors (e.g. specification of contract terms) influence contract performance. These studies, however, rarely examine both factors simultaneously. As a result, we know little about the how human factors can affect contract performance under shifting technical contingencies. This lack of understanding represents a significant gap in the contracting literature given organizational scholars have long acknowledged that performance suffers when there is a misfit between the social factors that govern human interaction in organizational life and the technical elements of organizational structure (Thompson, 1967; Trist, 1981; Trist, Higgin, Murray, & Pollock, 1963). Our paper seeks to address this gap in knowledge by examining how increases in contract performance due to changes in contract rules training, a technical factor, are contingent upon discretion over contract management and perceived ethical behavior, both social factors. To do this, we rely on a structural equation model to analyze survey data collected by the U.S. Merit Systems Protection Board from contract managers in 10 federal government agencies. Drawing from sociotechnical frames, we find that that contract managers who have engaged in more rules training tend to believe that they have less discretion and also view the behaviors of others as unethical. The findings also indicate that more training in contracting rules may actually inhibit perceived contract performance, when mediated by discretion and perceptions of ethical behaviors. Therefore, when both social and technical factors are captured, we are able to illustrate the complexity of these concurrent processes and their influence on perceived performance.