Government Contracts Research Articles

Способы и условия заключения государственных контрактов

The article reveals the concept of a state contract, discusses the features and specific features of a state contract, as well as the methods and conditions for its conclusion. In addition, the work comments on the latest changes in the field of government contracts, which are aimed at increasing the efficiency of procurement for defense and national security.

Proprietary Information Cost of Contracting with the Government

ABSTRACT We argue that contracting with the federal government involves significant proprietary information cost due to regulations requiring contractors to provide proprietary information, which may become available to outsiders via Freedom of Information Act (FOIA) requests. We provide evidence by showing that firms become more willing to bid for government contracts after a recent Supreme Court ruling on FOIA (Food Marketing Institute v. Argus Leader Media) that improved information protection for contractors and that this effect strengthens when the contracts entail higher proprietary information cost for contractors. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: K4; M4.

Evolvement of Excusable Delay Clauses in Government Contracts since the COVID-19 Pandemic

Evolvement of Excusable Delay Clauses in Government Contracts since the COVID-19 Pandemic

A Framework to Assess Possible Sources of Stakeholder Exploitation: A Developing Country Case

Solving complex post-disaster reconstruction challenges requires the altruistic involvement of heterogeneous stakeholder groups. However, small, more organized groups, such as government parastatals, private developers, and contractors often exploit large, unorganized groups, such as affected communities, leaving them more vulnerable to future disasters. Based on data collected from a case study in Pakistan, this study proposed a framework to assess, anticipate, and mitigate the exploitation of vulnerable stakeholders in post-disaster reconstruction projects. The framework draws on influential management theories and utilizes reciprocal relationships between stakeholder attributes (power, legitimacy, and urgency), participation, and exploitation. The study also argued for non-binary treatment of stakeholder attributes. The framework will allow practitioners to address issues around the exploitation of stakeholder interests in future post-disaster reconstruction projects.

On the organization of prosecutorial and supervisory support for the implementation of the national project “Ecological Well-Being”

The author examines the relations between the Prosecutor's Office of the Russian Federation and supervisory support in the field of implementation of a national project in the field of ecology. The subject of the research is the practice of the prosecutor's offices of the constituent entities of the Russian Federation and the Prosecutor General's Office of the Russian Federation, the case law of the Supreme Court of the Russian Federation, the legislation of the Russian Federation and organizational and administrative documents of the Prosecutor General of the Russian Federation, the works of scientists related to the topic of research. The methodological basis of the research includes the dialectical method; system method; methods of analysis, synthesis, analogy, deduction, induction, observation, modeling, historical, comparative legal, statistical and other methods. The author examines the organization of supervisory support for national projects, in particular, the problems that arise during work with sources of information about violations of laws, the organization of systemic information interaction with the objects being inspected, the distribution of responsibilities among prosecutors, the formation of departmental reporting, interaction with specialists (experts) during inspections, as well as during inspections at various stages of implementation of national projects. The work classifies typical violations and analyzes specific examples at various stages of national project implementation, such as: organizing and conducting procurement; implementation of government contracts; payment of government contracts and other expenditure of budget funds; organization and implementation of subsequent maintenance of purchased equipment and constructed facilities. The author also substantiates the need to create a single expert institution in the Russian Federation.

Право заказчика на немотивированный отказ от договора подряда и механизм возмещения убытков подрядчика

Disputes related to construction contract traditionally constitute a significant part of the cases considered by commercial courts. According to the Judicial Department of the Supreme court of the Russian Federation, the number of disputes from a construction contract (in particular, disputes arising from improper performance of obligations) in commercial courts significantly exceeds other categories of cases from other types of contracts in terms of the size of claims. It seems that there are several reasons for this circumstance. Firstly, to date more than 20 years have passed since the adoption of the only review of the practice of resolving disputes under a construction contract (Information Letter of the Supreme Commercial Court of the Russian Federation dated January 24, 2000 No. 51) Secondly, today there is not enough systemic clarification on a number of fundamental issues of the performance of the contract (for example, the possibility of changing the fixed contract price by agreement of the parties, increasing the term of the government contracts, etc.) In this regard, contractual regulation of construction projects is not only relevant, but also a difficult area of legal practice.

A system dynamics approach to building counterfeit avoidance programs

Recent disruptions and shortages across the global supply chain have heightened awareness of resiliency and security risks for consumers, industry, and consumers. Of particular concern is the rise in counterfeit information and communication technology (ICT) products. Commonly used technology solutions to avoid counterfeit are cost prohibitive to small-medium enterprises (SME), leading to an increased security, cost, and reputational risks to these firms. This research develops a novel mathematical model to illustrate how minor purchasing decisions can compromise the integrity of a supply chain and network infrastructure. We conduct interviews with industry leaders to understand why counterfeit ICT continues to be purchased by industry. We then construct a system dynamics (SD) model to illustrate the model is applied to a case study based on a US government contract and evaluated. The findings show even a short-term use of an untrusted supplier can result in significant quantities of counterfeit ICT being purchased. Finally, we propose a new framework to support SMEs developing a counterfeit ICT abatement program.

The New Public Integrity Management and the Protection of the Impartiality of Bureaucratic Decision-Making

The article argues that government organizations and the discipline of public administration should embrace a New Public Integrity Management (NPIM) to bridge the gap between advocates of external and internal public integrity controls on the behavior of public employees and contract government employees. The article argues that external and internal controls are important in maintaining public trust in government. This includes the management of the acceptance of gifts and private hospitality by government and contract government employees. The article traces the evolution of federal executive branch public integrity management and argues that the discipline of public administration has demonstrated a long-standing hostility towards external ethics controls due to early 20th-century divorce between law and administration. Of particular importance, the NPIM requires the adoption of a much broader definition of public corruption, which includes the conduct of private sector partners of government agencies responsible for the delivery of public goods and services paid for with public funds. Finally, the article argues that government ethics programs need to integrate moral reasoning education into their public integrity training programs and discuss criminal and administrative rules of conduct directed at protecting public confidence in the impartiality of bureaucratic decision-making.

КАТАЛОГИЗАЦИЯ ОБЪЕКТОВ ЗАКУПКИ КАК ОСНОВНОЕ УСЛОВИЕ УСПЕШНОГО ПЕРЕХОДА К ЦИФРОВЫМ ГОСУДАРСТВЕННЫМ КОНТРАКТАМ

The article examines the role of the catalogue of goods, works, and services for state and municipal needs in describing public procurement facilities in the process of transition to digital government contracts. The catalogue of goods, works, and services is considered both as an element of digital contracts and as a tool for ensuring the quality of purchased products, which, in turn, is a consequence of the existence of the problem of information asymmetry. Taking into account the review of Russian and foreign scientific literature on the value of product cataloguing in public procurement, the problems and challenges of digitalization in concluding government contracts, including those related to their regulation, the author hypothesizes about the insufficiency of product quality requirements contained in the catalogue, which is a significant obstacle to the execution of government contracts and the transition to digital government contracts. Based on the analysis of the survey results and an extended interview, these hypotheses are confirmed. As conclusions based on the results of the study, taking into account the obstacles to cataloguing goods, the author formulated the main reasons for the incomplete implementation of the potential of the catalogue of goods, works, and services in public procurement: an insufficient number of characteristics of goods in many positions of the catalogue, its insufficient visualization, as well as the unresolved problem of the complete transfer of government contracts to digital format.

Political Connections and Government Contracting: An International Analysis of Procurement Decisions and Firm Value

Political Connections and Government Contracting: An International Analysis of Procurement Decisions and Firm Value

Government Contracting and Living Wages > Minimum Wages

Government Contracting and Living Wages > Minimum Wages

The role of dynamic capabilities and innovation on the competitiveness of the manufacturing firms in Indonesia

This study seeks to explore how dynamic capabilities and innovation impact competitiveness within the Indonesian manufacturing sector. It specifically investigates how Domestic Component Level (DCL) certification, influenced by government involvement, mediates this relationship. The focus is on how government support shapes the certification process, ultimately affecting competitiveness. Through quantitative methods and surveys conducted among 344 manufacturing firms holding DCL certification in Indonesia, the research finds that while enhanced dynamic capabilities may not directly correlate with increased competitiveness, they play a crucial role in a company's journey toward competitiveness, requiring a gradual process. Additionally, companies with higher DCL values are better positioned to compete for government contracts and services.

МЕТОДИЧЕСКИЕ ПОДХОДЫ АНАЛИЗА БАНКОВСКИХ РИСКОВ ПО ОБЕСПЕЧЕНИЮ ГОСУДАРСТВЕННЫХ КОНТРАКТОВ

The article presents the main approaches used in the analysis of risks inherent in independent guarantees, which can be issued, among other things, by banks to secure government contracts. The circumstances that must be taken into account when examining risks are determined, with an emphasis on the order of their development. Recommendations are given for the application of the “fault tree” method. Significant vectors were also emphasized when analyzing guarantees of proper performance of contracts. A correlation was established in which risk factors lead to the inevitable occurrence of financial losses. The study concluded on the features of the contract system and the risks characteristic of it.

STATE TREASuRy AS A SuBjECT OF COLLATERAL LEGALRELATIONS IN THE XIXth — EARLy XXth CENTuRIES

The article deals with the legal norms for real estate pledge under the contracts with the State Treasury in the XIXth — early XXth centuries. The Treasury, as one of the parties to the contracts for work and labour or supplies, made rather high demands on the pledged property. The key interest was economic (business), because the contracts were designed to serve the interests of various governmental administrations, including Military, Engineering, etc. State institutions, both then and now, serve the needs of the state and society at a particular historical moment. In parallel, the develop-ment of contract law is taking place. This leads to an expansion of the range of collateral for real estate. Simultaneously the subject of pledge became broader gradually, primarily due to the need to provide landlords and property owners with new incentives for eco-nomic activity. This leads to an expansion of the range of collateral for real estate. One of the main reasons for expanding the list of real estate objects was the need to provide land-lords and property owners with new incentives for economic activity. At the same time, the location and market value of real estate was put at the forefront, because in case of a party’s failure to fulfill obligations to the Treasury, the subject of pledge was to be sold at the auction, which was supposed to help compensate for the damage caused to the trea-sury. The development of legal norms for real estate pledge under the contracts with the Treasury in the Russian Empire is closely related both to state institutions’ functioning within the bureaucratized management system and to huge geographical diversity with multinational specifics. In a certain sense, the system of contracts for work and labour or supplies in the Russian Empire demonstrates the groundwork for modern government contracts.

The global crisis, government contracts, licensing and corruption

This paper summarizes the arguments and counterarguments within the scientific discussion on the issue of corruption. The main purpose of the research is to examine the impact of global economic/financial crisis on corruption. We focus on manufacturing firms in the EECA region and examine their activities including bidding for government contracts, applying for an operating license, and applying for an import license. Systematization of the literary sources and approaches for solving the problem indicates that bribes got significantly smaller after the crisis ended. The relevance of this scientific problem decision is that governments’ efforts to improve the overall business environment when facing an economic/financial crisis help reduce corruption. Investigation of corruption in the paper is carried out in the following logical sequence: First, the size of bribes for securing government contracts is examined. Then, the prevalence of bribery during import license application process is examined. Finally, the prevalence of bribery during operating license application process is examined. Methodological tools of the research methods were non-parametric tests that compare the years of 2007 and 2010-2014. The research object is manufacturing firms in the EECA region because they were included in the BEEPS IV and BEEPS V manufacturing surveys. The research empirically confirms and theoretically proves that governments’ actions during an economic or financial crisis affect the size and prevalence of bribery. The research results can be useful for government officials that plan on reducing corruption in their region or country.

Adoption of pre-letting and pre-sale financing arrangements for real estate development in a developing economy: an assessment of the influencing factors

PurposePre-letting and pre-sale financing arrangements have been widely adopted to increase housing delivery in the developed economy. Despite the increasing level of adoption in some developed countries, some are reverting to spot property buying because of factors militating the adoption of pre-letting and pre-sale financing. However, little has been done on the factors influencing the adoption of these trust-based financing arrangements in the developing economy where there are challenges of trust and market transparency.Design/methodology/approachUsing a closed-ended questionnaire, 87 property development companies (PDCs), which constituted 63.5% of the 137 PDCs in Lagos metropolis, were sampled. Variables that influence adoption of pre-letting and pre-sale financing arrangements were presented to respondents for rating on a five-point Likert scale, ranging from 1 (not influential) to 5 (very highly influential). With the aid of SPSS software, acquired data were analysed using principal component analysis (PCA), mean rating and standard deviation.FindingsThe PCA finding revealed that factors influencing the adoption of pre-letting and pre-sale financing had 69.641% total variance. Top-rated components were fear of financial risk and firm’s reputation and poor government involvement and contractors' credibility, with 15.114% and 11.895% variances, respectively. The study findings suggested that the buyers' apprehension regarding the transfer of financial risk and the reputation of the firms significantly influence their decision to embrace both arrangements. As a result, the buyers' willingness to engage the financing arrangements is reduced, which consequently imparts adoption negatively. Furthermore, there is worrisome lack of government involvement, a crucial aspect for the success of such arrangements.Practical implicationsPre-letting and pre-sale financing arrangements are found to be highly suitable for environments where there is trust. The findings enlighten the development firms on the need to uphold their reputation, as buyers attach great significance to the credibility and integrity of the companies they engage in business.Originality/valueThis paper is one of the few attempts that have sought to explore the factors influencing pre-letting and pre-sale financing arrangements in an emerging market like Nigeria.

Does history really repeat itself? An empirical investigation of recurring misconduct violations in public procurement

Public procurement of goods and services accounts for a significant portion of government budgets. Among contracts awarded annually by the United States federal government, a disproportionate amount of total spend is given to a relatively small number of contractor firms, many of whom have committed government contract misconduct in the past. We leverage insights from the contracting literature and organizational learning theory to understand the relationship between past contract misconduct and the likelihood of a subsequent contract misconduct violation, along with contextual factors that could influence this relationship. Using composite misconduct data captured from a longitudinal dataset of United States Department of Justice (DOJ) public procurement, a probit regression analysis reveals that firms with a history of government contract misconduct violations are increasingly likely to commit a subsequent violation, yet this relationship is not linear. Further empirical analysis reveals characteristics of contracting firms and purchasing relationships which moderate this phenomenon. Our findings contribute to the literature by providing empirical support regarding the relationship between past and future contract misconduct violations within public procurement relationships. We also offer several implications to practitioners and policymakers to support the identification and management of repeat contract misconduct violators.

Economic policy uncertainty and cost rigidity: the moderating effects of government contracts and political connections

PurposeThis study examines the relationship between economic policy uncertainty (EPU) and managers' ex ante strategic choice on firms’ fixed and variable costs structure, i.e. cost rigidity and the moderating effect of government contracts and political connections.Design/methodology/approachUsing a sample of 4,162 US firms during 2003–2019 and EPU measure from Baker et al. (2016), the authors examine the association between EPU and cost rigidity using multivariate regression analysis. The authors also examine the moderating effects of government customers and political connections using the subsampling method.FindingsThis study finds that increases in EPU leads to higher cost rigidity, suggesting that managers tend to look ahead and make an ex ante commitment to invest more in fixed costs to avoid congestion costs in anticipation of future product demand during EPU. The study also finds that the presence of government customers and political connections moderates the need for adopting greater cost rigidity.Research limitations/implicationsThis study measures firms' cost rigidity based on archival data. Future studies could utilize managers' cost structure choices using firms' internal management cost structure forecasts data to measure cost rigidity to examine the relationship between cost rigidity and EPU.Practical implicationsThis study demonstrates that managers tend to make a proactive commitment to invest in fixed inputs when facing demand uncertainty from EPU to avoid congestion costs. This study also highlights the value of having government contracts and political connections by demonstrating that managers are less concerned about the congestion costs, hence weakening the impact of EPU on cost rigidity when they have government as major customers and/or political connections.Originality/valueThis study extends the management accounting literature by documenting that cost rigidity is related to EPU and that the relationship between cost rigidity and EPU also depends on whether the firm has government as major customers and/or political connections or not.

Quid pro quo? Local government debt and corporate tax avoidance

This study examines the effect of local government debt (LGD) on corporate tax avoidance using a sample of Chinese-listed firms from 2007 to 2019. We find a negative relationship between LGD and tax avoidance only in the municipal state-owned enterprises (SOEs) controlled by the municipal government, suggesting that municipal officials focus on municipal SOEs to raise tax revenues to alleviate debt pressures. Further discussions show that the negative effect of LGD on municipal SOEs' tax avoidance is pronounced in politically connected managers, cities with worse fiscal situations and only present at the early phase of officials' tenure but insignificant later. We examine the economic consequences of politically driven tax planning and find that municipal SOEs with lower tax avoidance subsequently receive more government contracts as favor returns. Such favor exchange changes the distribution of current and future cash flows of the municipal SOEs, which are mainly determined by adjusting the composition of current accruals (i.e., more income-increasing earning management) and cash flow items (i.e., less tax avoidance). This study sheds light on the “two-way favor exchange” between governments and firms and provides implications for understanding local government leaders' heterogeneous incentives for tax enforcement and firms’ competing incentives for tax avoidance.

Predicting Federal Contractor Misconduct

ABSTRACT Between 1995 and 2021, the United States’ Federal Government imposed $162.5 billion in penalties upon government contractors who had engaged in improper behavior as part of the procurement process. Despite the enormity of contractor misbehavior, the characteristics associated with contractor misconduct are relatively underexplored in academic literature. In this study, we examine whether and to what extent firm characteristics predict federal government contractor misbehaviors, which range from minor statutory violations to fraud. We document a consistent association between contractor characteristics (size and total amount of government contracts received), contract-specific characteristics (service-type contracts and awarding agencies GSA and DOE), and the act of committing misconduct. Misconduct severity increases in size and total amount of government contracts, is not affected by service contracts, and has an inverse U-shape for government agencies. Taken together, our results suggest that characteristics of the contractor, contract, and government agency are predictably associated with committing procurement misconduct. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: H11; H57; M41.