Contract Renewals Research Articles

Promotion & Tenure Reform Workgroup Report

The remit of the Open Scholarship Initiative 2017 Promotion & Tenure Reform workgroup clearly connected researchers’ personal publishing choices to the oft-traditionalist system of promotion and tenure in the United States, wherein researchers feel compelled to publish in toll access journals or monographs if they wish to achieve tenure, win grants, receive awards, or otherwise advance professionally. Other professional advancement systems worldwide, such as university hiring, contract renewals and government and foundation grantmaking processes similarly reinforce the primacy of toll access research formats. Hiring practices were of concern for our workgroup, given the increasing “adjunctification” and precarious state of tenured university posts in the United States. Due to these parallels, the Reform working group expanded our charge to consider hiring, grants, and other professional advancement scenarios common to researchers’ concerns worldwide.In this report, we unpack how professional advancement practices—including and beyond promotion and tenure review standards—can be realigned to encourage researchers’ adoption of open access (OA), open research, and open educational practices.Here, we set the scope of the current problem, discuss the reasons why professional advancement scenarios should be realigned to reward open research practices, identify challenges to reforming professional advancement scenarios wholesale and worldwide, recommend concrete actions for beginning the reformation process, and share resources related to professional advancement and open access.

Drivers of contract renewal in international B2B services: a firm-level analysis

PurposeA key issue for B2B industrial firms is to better understand the drivers of customer value and contract renewal decisions, due to the long-term supplier-customer relationships. When the B2B firm is operating across national boundaries, there is added complexity to the renewal decision, because the drivers are also influenced by cultural considerations. The purpose of this paper is to examine the main drivers of customer value creation and contract renewal intentions, for a large B2B firm operating in both the USA and Japan and compare the two data sets.Design/methodology/approachThe company, which provided the data for the study, is a US Fortune 100 firm in the facilities management industry, operating worldwide. Data were collected using a survey questionnaire from a sample of the firm’s customers in two of its largest markets, the USA and Japan. The authors used PLS to analyze the data, and compare and contrast the drivers.FindingsThe findings highlight both similarities and differences across the two countries for the most influential drivers of customer value and contract renewal. Although no differences were found when examining the effect of relational drivers on contract renewal, differences were observed for utilitarian drivers: product quality and price.Practical implicationsThe authors expected the relational drivers of contract renewal to be stronger in the high-context culture of Japan, but found that there were no differences with the US market. While relational drivers are important in the decision-making process in both countries, it seems that managers should focus more on price considerations in Japan. In contrast, product quality is relatively more important in the USA, when negotiating contract renewals with customers.Originality/valueNoticeably absent from the B2B services literature is its application to international markets. In particular, research is lacking on the specific drivers of customer value and contract renewal intentions in the USA and Japan, despite the importance of long-term on-going contractual relationships in these markets. This study has provided additional insights into the complex world of contract renewal between international buyers and sellers of large industrial systems.

Evaluation of a Program for Improving Advanced Imaging Interpretation.

ObjectivesSelf-referred imaging has grown rapidly, raising concerns about increased costs and compromised quality of care. A quality improvement program using imaging interpretation criteria was designed by a national payer to ensure that noninvasive diagnostic images are interpreted by appropriately trained physicians. The objective of this program evaluation was to compare self-referral rates before and after institution of the imaging interpretation criteria program.MethodsThe imaging interpretation criteria program allocated privileges to bill for advanced imaging interpretation according to physician specialty. Nonradiologist physicians could obtain exemptions by appeal. Some physicians were not restricted in their billing because of successful appeals of the restrictions or the timing of their contract renewals. Self-referral rates were compared between the period 12 months before and 25 months after the program was initiated using t tests. The preprogram and postprogram self-referral rate for computed tomography and magnetic resonance imaging in aggregate was calculated both for the physicians that came into contact with the program and nationally, and then was stratified based on physician appeal status and reimbursement restrictions.ResultsThe program was associated with significantly less frequent self-referrals by physicians whose appeals were denied (17.4%–8.2%; P = 0.0011) and by physicians notified of the program but not subject to it (24.8%–18.5%; P = 0.026). Self-referrals in the program states declined from 19.9% to 13.7% (P < 0.01).ConclusionsA significant reduction in image interpretations billed by physicians working outside of the scope of their training occurred after the implementation of the imaging interpretation criteria program.

Do Employers Learn from Public, Subjective, Performance Reviews?

Much of the new “gig economy” relies on reputation systems to reduce problems of asymmetric information. In most cases, these reputation systems function well by soliciting unbiased feedback from buyers and sellers. However, certain features of online labor markets create incentives for employers to misreport worker performance. This paper tests whether employers learn about worker productivity from public, subjective, performance reviews using data from a large online labor market. Starting with a simple model of employer learning in the presence of potentially biased reviews, I derive testable hypotheses about the relationship between public information and wages, worker attrition, and contract renewals. I find that these public reviews provide substantial information to the market and that other firms use them to learn about the productivity of workers. I also find evidence that these reviews affect how long workers stay in the labor market. Finally, using data on applications, I provide evidence of a mechanism for honest reviews. I show that workers punish firms that leave negative reviews by refusing to work for them again. Together, this body of evidence suggests that reputation systems in online labor markets provide significant information to both workers and firms and help reduce problems of asymmetric information.

The effect of contract renewal and competitive tendering on public transport costs, subsidies and ridership

In this paper, we aim to estimate the effect of contract renewal as well as competitive tendering on public transport costs, subsidies, and ridership. More specifically, we examine to what extent (multiple) contract renewals and introduction of competitive tendering for long-term public transport contracts affect ridership, operational costs and subsidies in concession areas governed by public transportation authorities from 2001 until 2013 in the Netherlands. Our identification strategy improves on the literature as we are able to control for all time-invariant unobserved factors, such as network and area characteristics by using panel data. We show that when renewing long-term contracts, operational costs are reduced by at least 10%, whereas subsidies fall even stronger. For contracts that are renewed at least twice, the reduction in costs is even more substantial and in the order of 16%. We find that the effect of competitive tendering is completely absent, suggesting that the threat of competitive tendering is sufficient in a market where the majority of concessions is competitive tendered. Contract renewal not only reduces costs and subsidies, but simultaneously increases public transport ridership by 7.7%. Furthermore the vehicle-hours elasticity of operational costs is 0.40, pointing to strong economies of density. The geographical scale elasticity of operational costs is around one, which indicates constant returns to scale with respect to the geographical size of the concession area. This suggest that the current size of the Dutch concession area is optimal with respect to costs.

Optimizing maintenance service contracts through mechanism design theory

This paper presents a novel approach for designing and optimizing maintenance service contracts through the application of mechanism design theory. When offering a contract to its customer, the maintenance service provider seeks to specify contract terms – such as price, service features and incentives – that maximize the provider's profit, satisfy customer needs, allocate risks effectively and mitigate moral hazards. Optimal contract design has to account for asymmetric information and uncertainties associated with customer characteristics and behaviors. We illustrate our mechanism design approach by applying it to the contract design challenge of a gas turbine manufacturer, which also provides maintenance services for its aircraft engines. In our solution approach, we compute an optimal set of contracts. The entire set is presented to the customer and is designed such that the customer will accept one of the contract alternatives without negotiations. In addition to eliminating the costs and delays associated with negotiations, this approach also reveals the customer's private information to the service provider, which the provider can use to its benefit in maintenance management and future contract renewals. Furthermore, we design and incorporate win–win incentive mechanisms into the contracts, which reward the customer for actions that reduce maintenance costs. We present a deterministic and a stochastic mechanism design model, the latter accounting for uncertainties associated with customer actions, engine performance, and maintenance costs during the contract execution phase.

Switching off: how homes can make savings on their energy bills

Be it upcoming contract renewals or current pricing, there is money to be saved from being smarter with energy. Adam Bernstein looks at some of the options for care homes, from using an energy consultancy, to not being ‘out of contract’

Accessorizing. The Effect of Union Contract Renewals on Consumption

In this paper we use information on monthly wage increases set by collective agreements in Italy and exploit their variation across sectors and over time in order to examine how household consumption responds to different types of positive income shocks (regular tranches versus lump-sum payments). Focusing on single-earner households, we find that the Permanent-Income Hypothesis holds empirically, since total and food consumption do not exhibit excess sensitivity to anticipated income shocks. Consumption does not respond at the date of the announcement of income increases either, as these are known to compensate workers for the overall loss in their wages' purchasing power. We also find, in line with the Permanent-Income Hypothesis, that consumption responds, but only a little, to transitory and less anticipated shocks, as the expenditures on clothing & shoes increase upon the receipt of the lump-sum payments. This finding can be interpreted as a signaling-by-consuming behaviour given that these goods represent conspicuous consumption. There is also some weak evidence of the existence of liquidity constraints regarding expenditures on strictly durables.

The Contract Year Phenomenon in the Corner Office: An Analysis of Firm Behavior During CEO Contract Renewals

This paper investigates how executive employment contracts influence corporate financial policies during the final year of the contract term, using a new, hand-collected data set of CEO employment agreements. On the one hand, the impending expiration of fixed-term employment contracts creates incentives for CEOs to engage in strategic window-dressing activities. We find that, compared to normal periods, CEOs manage earnings more aggressively when they are in the process of contract renegotiations. Correspondingly, during CEO contract renewal times, firms are more likely to report earnings that meet or narrowly beat analyst consensus forecasts. Moreover, CEOs also reduce the amount of negative firm news released during their contract negotiation years. On the other hand, we find that merger and acquisition deals announced during the contract renegotiation year yield higher announcement returns than deals announced during other periods, suggesting that the upcoming contract expiration and renewal can also have disciplinary effects on potential value-destroying behaviors of CEOs. In addition, we show that firms whose CEOs are not subject to contract renewal pressure do not experience such corporate policy changes and that CEOs who engage in manipulation during contract renewal obtain better employment terms in their new contracts, in terms of contract length, severance payment, and salary and bonus. Overall, our results indicate that job uncertainty created by expiring employment contracts induces changes in managerial behaviors that have significant impacts on firm financial activities and outcomes.

Analysing national practices after European state aid control: are multi-stakeholder negotiations beneficial for public service broadcasting?

This article analyses the increasing emphasis on multi-stakeholder approaches in the development of public broadcasting policies. The European Commission, in particular, reinforces this trend, having pointed to the necessity of ‘third parties’ being involved in procedures that allow public broadcasters to expand activities to new media markets. The article’s research question is twofold. First, what type of multi-stakeholder approach has been advocated for by the Commission? Second, are multi-stakeholder approaches, implemented by Member States after an encounter with the Commission, adding to more democratic (understood as more inclusive) decision-making on public service broadcasting or, rather, simply providing an additional forum for private sector interests? Evidence derives from two case studies in the Netherlands and Flanders, where some form of ex ante evaluation has been developed and a multi-stakeholder consultation has been set up in preparation for management contract renewals. Findings show that the newly developed multi-stakeholder policy practices are far from inclusive and fail to meet several aspects of deliberative democracy. Essentially, they have been created in response to market pressures (and, hence, over-focus on market questions) and rarely take as their starting point the improvement of public service broadcasting as a democratic policy project.

Building Reputation for Contract Renewal: Implications for Performance Dynamics and Contract Duration

Due to technological progress, recent performance is often more informative about future performance prospects than is older performance. We incorporate information decay in a career concern model in which performance depends on type and effort and contract renewal is based on the performance record. In contrast with the career concern literature (e.g. Lewis, 1986; RJE), contractors work harder when the project approaches renewal date and when their reputation is better. Productive investment are crowded out by window-dressing effort in late contract periods, but it is boosted in early periods. More frequent contract renewals strengthen reputational effects and result in improved performance if the relative cost of investment is low, but otherwise long-term contracts induce more effort. Our results are corroborated by some empirical studies showing that performance improves as the contract approaches renewal date.

Structuring enduring strategic alliances: the case of Shell Australia and Transfield Services

PurposeThis paper provides insights into the evolution of the strategic alliance between Shell and Transfield Services in Sydney, Australia in the area of engineering and facilities management.Design/methodology/approachTo gain an in‐depth understanding of the distinct developmental phases in the alliance relationship, we conducted 12 interviews and a survey yielding 39 responses from the management and operations staff of both these organizations.FindingsInitially the alliance between Shell and Transfield Services was established with fundamental building blocks of trust and flexibility. However, as the relationship progressed with subsequent contract renewals, complex value adding demands were placed on the alliance. This paper provides insights into understanding three generations of evolution in the relationship‐starting from the building of a successful relationship based on labor savings and then on to one which seeks incremental innovations to become one of the most efficient maintenance operators in the world and finally seeking additional capabilities to continue improving alliance outcomes.Originality/valueThe paper is aimed at managers who are involved in structuring and managing outsourcing arrangements. Referring to outsourcing as an alliance arrangement, the paper points out that as alliance relationships mature, managers need to progress from a fee‐for‐service model to trusted collaboration, and finally to an alliance with joint strategic objectives. Drawing from the case of Shell and Transfield, we present the best practices managers may adopt when progressing to a joint strategic engagement.

The Evolution of European Community Law on Public Procurement between 2006 and 2008

The report describes the most recent evolution of European Community Law concerning the award of public contracts. It is mainly focused on case-law and provides an overview of the latest judgements of the ECJ. Topics dealt with in particular are the definition of contracting authorities, of public contracts and concessions; some aspects of the award procedures, award criteria, contract renewals and review procedures. Moreover, the recent Directives (mainly Directive 2007/66) are briefly presented. A final section deals with public procurement in the field of defence.

The importance of internal information system (IS) support to maximize reimbursement efforts of a blood and marrow transplant (BMT) program

Many BMT programs are challenged with financial justification of their existence. One way to maximize reimbursement within your own facility is to induct a member of your IS department as a core member of your BMT team. Begin by identifying a person in your IS department who can work with the software applications utilized by your program. Many hospitals have an electronic medical record system, which is a repository of clinical data. Integrating this information with the existing admission/discharge/transfer systems allows for extended data analysis that can be used for monitoring reimbursement activities. This integration and reporting will require support from an IS staff member, so inclusion of this person in the BMT program will allow for improved understanding of BMT program requirements. At our center, a transplant specific information system was developed which allowed for data to be entered by staff according to their responsibility. Referral, financial, clinical, laboratory, and clerical information is entered and is available in real-time to all users. In addition, users can create their own ad hoc queries based on 18 categories of selection criteria and 78 display parameters. These reports can quickly show populations of transplanted patients with common characteristics and their comparative outcomes. This data can then be exported to allow for independent analysis by pulling in cost data from financial software. This advantage is carried over to the contracting/managed care staff (CMC). By looking at historical data, the CMC staff can better determine the changing costs related to diagnosis and type of transplant. Data such as readmissions, donor lymphocyte infusions, long-term follow-up, and engraftment information can be queried and can be compared to costs associated. With this information, the CMC can now better analyze the need for adjustment in payment on contractual agreements with third party payors. As technology evolves and new drugs and treatments become standard of care, the CMC can monitor and make changes as contract renewals are considered. In addition, long-term agreements (3 to 5 years) can be adjusted with real data for justification. Finally, this data can be used to look at year-end reports, patient-specific reports, and payor-specific reports. This information is key to determining the financial viability of your program.

Contract renewal and incentives in public procurement

This paper explores how the government's choice of renewal policy in public procurement programs can be used as a mechanism to provide firms with incentives to supply quality. A public service is produced by several firms. The firms participate in a tournament where they are ranked according to the quality of their services, and rewarded in terms of contract renewals. We analyse the firms' incentives to produce high-quality services, and find that they are maximised if 50% of the contracts are renewed. The optimal renewal policy trades off incentive provision (which requires that a relatively large fraction of the firms are replaced each period) against the entry costs of new firms.

Developing priorities for greener state government purchasing: a California case study

State purchasing data can provide valuable information, in combination with a systematic ranking methodology, for prioritizing environmentally preferable purchasing efforts. A team of researchers developed and applied a priority-setting tool for the State of California's Procurement Division, which considers purchase volume, environmental impacts, potential for improvement, and institutional factors such as existing state policies and upcoming contract renewals. Using state purchasing data, this method produced a ranked list of 58 product classes, divided into four general priority groups. The State of California selected three priority product classes for further analysis by the research team, leading to a list of recommended product brands. The process for developing a list of recommended general-purpose cleaners is described as an example.

Negotiating an Online Contract

The subject of this article is not strictly limited to law librarianship but I do feel that it is a topic that a large number of us are exposed to and for which I myself initially had little guidance. In the hard financial climate that we have been experiencing recently, negotiating good contract renewals has become a vital skill for any legal information professional.

Full Insurance, Bayesian Updated Premiums, and Adverse Selection

In the classic Rothschild-Stiglitz model of adverse selection in a competitive environment, we analyse a “no-claims bonus” type contract (bonus-malus). We show that, under full insurance coverage, if the insurance company applies Bayes's rule to learn about client probability types over time and uses this information in premium calculations for contract renewals, then there exist conditions under which all client types strictly prefer the Bayesian updating contract to the classic Rothschild-Stiglitz separating equilibrium.

The stabilizing effects of price flexibility in contract-based models

This paper shows that the destabilizing effects of price flexibility due to the increased sensitivity of contract wages to labor market tightness depend on the assumption of a restriction on the information available to wagesetters who are negotiating contract renewals. If these agents are put on the same footing as investors and the monetary authorities by being given access to current information, then increased price flexibility can reduce the magnitude of economic fluctuations in the face of demand shocks. Contrary to other recent papers, this result is derived completely within a staggered contracts framework.

A test for regulatory lag and the role played by periodic contract renewals in mitigating such lag in local cable franchise relationships

This study reports two primary findings. First, the typical cable franchise relationship appears to be characterized by substantial regulatory lag. While long-term franchise contracts may involve a significant amount of day-to-day interpretation and modification, the interpretation and modification are not sufficient to ensure that the contractual terms of trade are consistently at market. In terms of pricing, channel capacity, community programming channels, and franchise fees, the terms of trade confronted by cities prior to franchise renewal are significantly less favorable than the terms of trade found in post-renewal contracts.