Why modify or terminate contracts for critical supplies? Evaluating federal purchasing of PPE following COVID-19

Abstract

Contract managers change contracts to respond to unforeseen events and to improve the likelihood of securing critical supplies. This study employs data from the General Service Administration’s SAM.gov Data Bank on over 8,000 contracts to examine the prevalence, reasons for, and timing of contract modifications and terminations in federal purchasing of personal protective equipment (PPE) in the first year of the COVID-19 public health crisis. Results show that modifications that transform transactional contracts to more collaborative designs were utilized for some of the highest-risk contracts and were associated with increased obligations, indicating that collaborative designs led to more purchasing of PPE. Competitive selection increased the likelihood of termination, the rate at which terminations occurred, and deobligations, indicating that the approach increased the costs of administration without improving the likelihood of securing supplies. A substantial portion of modifications and terminations occurred within the first forty days of delivery, revealing how contract management capacity was needed in the early stages of critical supply acquisition.