Government Procurement Contracts Research Articles

Cross-border Impact of ESG Disclosure Mandate: Evidence from Foreign Government Procurement Contracts

Cross-border Impact of ESG Disclosure Mandate: Evidence from Foreign Government Procurement Contracts

Good Faith Governance: Risk Management in Government Procurement Contracts

The parties' good faith must accompany implementing goods/services procurement agreements. Good faith is a filter based on moral values ​​and decency. In the contract for the procurement of goods/services, the government is said to have the ability to pay (solve) to the provider in accordance with the value of the contract that has been mutually agreed upon, with a guarantee that every contact has always been budgeted for in the RAPBN/D but in reality bankrupt) In this case, there is a claim from the private party, the goods/services provider. Therefore, we need regulation on how the government can regulate or make clear rules that demand from the private sector no longer arise because, of course, this is very disturbing to government affairs, even though in every contract, it is hoped that it will run well and smoothly. Therefore, risk management is needed against lawsuits from private parties. The research method is normative research with a concept approach (especially the concept of risk management, government default, goods/services procurement contracts and good faith); the case approach and the relevant statutory approach were used in this study. This study aims to examine and elaborate more on the government's default risk management arrangements in government goods/services procurement contracts from the principle of good faith. Procurement of goods/services from the perspective of good faith. Risk management arrangements are needed to avoid the risk of claims from the private sector, in this case, providers of goods/services against the government with affirmation actions in laws and regulations related to the procurement of government goods/ services, that when the government defaults/defaults it does not interfere with the implementation of government duties.

LEGAL REASONING OF THE JUDGE'S DECISION REGARDING GOVERNMENT PROCUREMENT CONTRACT GUARANTEE CLAIM

The decision is a written legal text made by an authorized judge, and its legal product is categorized as a crown. However, despite being considered a crown, a judge's decision is not exempt from examination by legal scholars. The optics used in the examination process are based on various perspectives, including hermeneutics as the fundamental basis for interpreting the text (decision). Substantively, hermeneutics has three main streams of thought, namely as a theoretical (methodological), philosophical, and critical hermeneutics, each with different understandings. Hermeneutics as a method focuses more on the effort to capture and reveal the meaning of the text, while philosophical hermeneutics goes beyond that and emphasizes "capturing meaningful meaning," implying that the meaning of the text can be continuously produced through a dialectical process. On the other hand, critical hermeneutics focuses on the aspect of disclosing the meaning of the author's ideological interests. This research aims to examine the legal reasoning in Decision No. 272 / PDT.G / 2017 / PN.BDG regarding the Government Procurement Contract Guarantee Claim from the perspective of Hans Georg Gadamer's Hermeneutic Circle. The research type is normative doctrinal, using secondary data sources consisting of primary, secondary, and tertiary legal materials with a conceptual approach, statutory approach, and case study. The research findings suggest that the process of claiming a bank guarantee through the judicial institution can be carried out by the Procurement Committee (PPK) as long as they obtain authorization from the Budget User, who is the owner of the work (bouwheer). This is due to the hybrid nature of government procurement contracts, which distinguishes them from private contracts, and the clarity of the scope of authority of the Budget User serves as the establishment of formal justice, acting as a bridge (epistemology) toward substantive justice.

AI-tocracy

Abstract Recent scholarship has suggested that artificial intelligence (AI) technology and autocratic regimes may be mutually reinforcing. We test for a mutually reinforcing relationship in the context of facial-recognition AI in China. To do so, we gather comprehensive data on AI firms and government procurement contracts, as well as on social unrest across China since the early 2010s. We first show that autocrats benefit from AI: local unrest leads to greater government procurement of facial-recognition AI as a new technology of political control, and increased AI procurement indeed suppresses subsequent unrest. We show that AI innovation benefits from autocrats’ suppression of unrest: the contracted AI firms innovate more both for the government and commercial markets and are more likely to export their products; noncontracted AI firms do not experience detectable negative spillovers. Taken together, these results suggest the possibility of sustained AI innovation under the Chinese regime: AI innovation entrenches the regime, and the regime’s investment in AI for political control stimulates further frontier innovation.

Independent directors, corporate ownership and cost of debt: Do politically connected independent directors matter? Evidence from China

This research seeks to determine whether politically connected independent directors (PCIDs) have a substantial effect in lowering the cost of debt (CoD). Therefore, the research aims to explain the relationship between political ties and the cost of debt, politically connected independent directors and the cost of debt, and state ownership and the relationship of politically connected independent directors and the cost of debt. In addition, we analyze the influence of corporate ownership on the connection. To illustrate this, we empirically study panel data which was separated into two periods (2011–2012 and 2013–2014) in state-owned and non-state-owned firms (SOEs and non-SOEs). We discovered that PCIDs had a considerable and unfavorable effect on the CoD, particularly in non-SOEs. As a result of the shared resource knowledge of PCIDs in government procurement contracts, finance, and law, the CoD in non-SOEs is reduced. The findings of this research add to the existing literature by employing data from China and demonstrating the impact of PCIDs in decreasing the cost of debt, particularly for non-SOEs.

Administrative Litigation of Government Procurement Contract Dispute

Administrative Litigation of Government Procurement Contract Dispute

Does the government procurement market favor corporate social responsibility in a weak institution? Evidence from China

This study investigates, in the context of a weak institution, the single and interactive effects of firms’ nonmarket strategies in China’s government procurement market. Based on transaction cost and signal theory, using data pertaining to Chinese government procurement contracts from 2016 to 2018, this study also provides evidence that superior corporate social responsibility (CSR) performance enables firms to obtain more government procurement contracts. However, the effect is only significant in non-state-owned enterprises. Considering the interaction effect of corporate political activity (CPA) and CSR in business to government (B2G) markets, this study finds that CPA, characterized by the political attributes of executives, enhances the signal effect of CSR in B2G markets. Further heterogeneity analysis indicates that CSR’s signal effect diminishes over time and is enhanced with high industry competition. Our findings provide new insights on nonmarket mechanisms (such as CSR), through which firms competing in China’s B2G market can compensate for the weak institution.

Are transactional political connections more valuable to firms than relational political connections?

Political connections are an increasingly important part of firms’ strategies to develop relationships with the government and politicians. This study examines the impact of transactional and relational political connections on firm value. The results show that transactionally connected firms are more likely to exhibit greater firm value than their relationally connected and non-connected counterparts. This study further finds evidence of a long-term value-enhancing effect of the transactional approach to political connections. A variety of robustness tests with alternative model specifications continue to show that transactional political connections lead to higher firm value. The findings indicate that firms with transactional political connections are provided with better networks with the political regime in power compared with those with relational political connections. These transactionally connected firms may enjoy preferential treatment from the government, in the form of lower taxes, and the access to government loans, subsidies, bailouts, and/or procurement contracts.

Firms’ efficiency, exits and government procurement contracts

This study shows that productivity trends in Russia are similar to those in other countries where technology leaders enjoy productivity growth, with a gap increasing between them and other companies. The survival analysis suggests that the most efficient firms quit the market at a faster rate than other companies do. Survival functions of the least efficient firms do not always differ significantly from those of other enterprises. Additional financial support from government contracts helps firms in all efficiency groups survive but this effect is stronger for laggards. The shift of gains from the public procurement system towards low productive firms leads to the distorted allocation of resources in the economy and, in the long run, may undermine economic growth by allowing inefficient companies to stay in the market significantly longer than would be the case in a more competitive environment.

Fiscal policy and credit supply: The procurement channel

We show that banks’ lending exposure to firms with government procurement contracts can amplify the diabolic loop between sovereigns and banks. Using the fiscal austerity measures implemented during the 2010-2011 European sovereign debt crisis as a shock to government procurement, we find that banks with higher exposure to these firms reduced lending significantly more than banks with lower exposure, controlling for firm-specific credit demand. The reduction in credit supply is economically as important as the effect of banks’ sovereign debt holdings, and affected both firms with and without government contracts. Firms with lending relationships with affected banks experienced lower sales growth, assets growth, employment growth, and investment. This decrease in real economic activity is likely to reduce tax revenue, further amplifying the diabolic loop.

THE QUIET REVOLUTION OF ISRAEL’S PUBLIC PROCUREMENT LAW

This article gives a legal-historical outlook on the development of the Israeli procurement law, the main achievements and challenges, and the “quiet revolution” it is going through. This article analyses the respective roles of the three branches: the legislature, the executive, and the judiciary from an institutional vantage point, in designing the public procurement legal framework. This, while considering the greater socio-political and economic context. Israel’s public procurement regime is undergoing significant changes. The most recent changes involve a greater degree of professionalism by different governmental units; e-procurement; e-tendering; and a pilot of e-guarantees. Furthermore, the government is promoting public-private partnerships (PPPs) by engaging in more sophisticated long-term procurement models. Moreover, the decision of the Supreme Court of Israel in Bibi Roads Earthmoving & Development Ltd v Israel Railways Ltd is an important milestone representing a formalistic approach in contract law interpretation of government procurement contracts. This decision had a profound impact on the procurement cycle as a whole. A proposal for a revision of the Mandatory Tenders Regulations, aimed at increasing competition and diversity of suppliers by giving the government/executive more discretion in the procurement process, is now on the table. Within this context, the judicial overhaul promoted by the 37th government and its ramifications on public procurement law is briefly discussed.

Research on the Impact of Government Investment on Enterprise R&D Innovation——Based on the Mediation Effect Model

Although government procurement is used as a demand-side innovation policy tool in many countries, how government procurement affects corporate technological innovation is still controversial, and its mechanism has not been empirically tested. The research in this paper finds that, from the perspective of enterprises, government procurement should be measured from the scale of government procurement contracts obtained by enterprises and the degree of support from government purchasers. The scale of procurement contracts obtained by enterprises and the degree of support obtained by enterprises from purchasers have an impact on the input and output of enterprise technological innovation. It has a significant positive role in promoting, and technological innovation investment plays an intermediary role in it.

Close Enough! Exploring the Consequences and Motivations Behind Estimates in Capital Budgeting

Analytic tools used for decision support require high quality data inputs in order to arrive at precise estimates. Using an extensive database from US government procurement contracts, we document that an over-representation of accepted contract bids end in a series of zeros. These ending-zero contracts show systematic differences in contract outcomes. They require more extensive revision and are less likely to have embedded options exercised, indicating weaker contract performance and requiring additional resources for renegotiation. We find support for the presence of ending zeros being associated with uncertainty in the contract solicitation. Ending zero contracts are more frequent for certain services, particularly research and development, and less frequent when the contract refers to standardized goods or services. We explore whether the presence of ending-zero bids and their associated weak outcomes is driven by small contracts, potentially unsophisticated bidding firms, or particular government agencies. Our results suggest that the specificity of the contract solicitation itself and the information it provides may be a driving factor and that government allocation of resources could improve with additional detail provided in contract solicitations.

The Concept of Private-Administration Contracts in Settling Problems in Government Goods/Services Procurement Contracts

Contracts for the procurement of government goods/services are the realm of private law that implements pure private contracts. A legal relationship in a private contract, especially in a contract settlement, is a relationship between the settlement of the rights and obligations of the parties. This study describes the settlement of government goods/service procurement contracts that require a legal basis both in principle and theory. By using the conceptual analysis method, the findings indicate an inconsistency in solving a legal problem in a government procurement contract, where private legal issues are resolved through administrative law. Theoretically, this study contributes to the resolution of this problem, there are intersections between two legal aspects, namely private law and administrative law. In practical terms, this study encourages the development of government goods/service procurement contract problem-solving practices to adopt the contract problem-solving method starting to use administrative law.

Sovereign-Bank Diabolic Loop: The Government Procurement Channel

We show that banks' lending exposure to firms with government procurement contracts can amplify the diabolic loop between sovereigns and banks. Using the fiscal austerity measures implemented during the 2010-2011 European sovereign debt crisis as a shock to government procurement, we find that banks with higher exposure to these firms reduced lending significantly more than banks with lower exposure, controlling for firm-specific credit demand. The reduction in credit supply is economically as important as the effect of banks' sovereign debt holdings, and affected both firms with and without government contracts. Firms with lending relationships with affected banks experienced lower sales growth, assets growth, employment growth, and investment. This decrease in real economic activity is likely to reduce tax revenue, further amplifying the diabolic loop.

Kekuatan Mengikat Surat Penunjukan Penyedia Barang dan Jasa Pemerintah dalam Kontrak Pengadaan Barang/Jasa Pemerintah di Masa Pandemi Covid-19

The process of determining the auction winner for a goods / services procurement project ends with the issuance of SPPBJ by PPK. The purpose of this study is to analyze the legally binding force of the Goods / Services Provider Appointment Letter (SPPBJ) in government procurement contracts of goods / services, especially during the Covid-19 pandemic. The results showed that before the contract for the procurement of goods / services was signed by the PPK and the provision of goods / services, the SPPBJ that had been issued by the function of executing the auctioned work provided that there were no objections from other participants and the rebuttal period had ended. SPPBJ acts as a binding contract, where SPPBJ is very much needed because the contract may be canceled or transferred due to refocusing of activities and relocation of budgets due to the impact of the Covid-19 pandemic as it is today. There needs to be a more stringent regulation in the SPPBJ issuance process to deal with irregularities that may still occur, which is carried out by PPK.

CONTRACT SPLITTING IN GOVERNMENT PROCUREMENT: THE TREND IN NIGERIA’S PROCUREMENT SYSTEM

From independence in 1960 till 2007, public procurement activity in Nigerian Federal Government was not regulated by any known formal legislation made by the National Assembly of the country. The system and practice was thus weak and characterized by avalanche of irregularities and illegalities; massive corruption and fraud beset government procurement and contract award system in Nigeria throughout the period. Against this backdrop, in 2007, Nigeria through the National Assembly enacted a public procurement law- the Public Procurement Act (PPA), 2007, which ushered the country into a new procurement order. The PPA, 2007 aims to regulate the processes leading to award and implementation of all government procurement contracts in the Federal Government, with the view to forestalling the inadequacies of the old procurement practice. The paper argues that, despite the PPA, 2007, contract splitting, one of the major ills that saw the collapse of the old procurement system, has continued to show its ugly face under the current procurement dispensation. The paper uses some recent cases of contract splitting perpetrated by some Ministries, Departments and Agencies (MDAs) of Nigerian Federal Government to concretize its claims. It submits that Nigeria needs to take urgent measures to curb the odious trend so as to enable country to quickly realize the objectives of the recent public procurement reform. Accordingly, the paper recommends among other things, that strong ‘political will’ by the federal executive arm of government and unfettered application of the provisions of the law in handling cases of contract splitting by designated court - the Federal High Court of Nigeria are of high imperative in combating the malfeasance. The paper depends mainly on evidences from newspaper reports and speeches as sources of its data.

Choose Your Battles Wisely: The Consequences of Protesting Government Procurement Contracts

Firms that successfully protest a government agency’s conduct or terms of a procurement contract observe a reduction in future business opportunities with the government. These firms receive fewer and less valuable government contracts, face more contract cancellations, and experience significant reductions in sales growth and employee growth. Despite widespread belief, successful bid protesters do not delay government procurement due to lengthy dispute resolutions. We provide the first analysis of corporate interactions with the United States government bid-protest system. Our results demonstrate the effects of legitimate bid protests to firms.

Government Procurement Contract Design with Unobservable Productivity and Moral Hazard

This study investigates the optimal incentive structure for a government procurement contract in the field of defense. Optimality implies that the government achieves efficient and cost-effective procurement through incentives that encourage the contracting firm to reduce costs in the presence of both moral hazard and adverse selection. To investigate the optimal contract scheme when moral hazard and adverse selection occur simultaneously, we employ a hybrid model of moral hazard and adverse selection. Our analysis shows that a low--powered incentive is optimal when the firm's productivity is unobservable and that the incentive rate is lower in the hybrid case than in the pure moral hazard case. This is because the government must pay informational rent to the firm to ensure that the firm is honest. We also find that the optimal incentive rate increases as the degree of information asymmetry decrease.

Competing for government procurement contracts: The role of corporate social responsibility

Research Summary: This study examines whether corporate social responsibility (CSR) improves firms’ competitiveness in the market for government procurement contracts. To obtain exogenous variation in firms’ social engagement, I exploit a quasi‐natural experiment provided by the enactment of state‐level constituency statutes, which allow directors to consider stakeholders’ interests when making business decisions. Using constituency statutes as instrumental variable (IV) for CSR, I find that companies with higher CSR receive more procurement contracts. The effect is stronger for more complex contracts and in the early years of the government‐company relationship, suggesting that CSR helps mitigate information asymmetries by signaling trustworthiness. Moreover, the effect is stronger in competitive industries, indicating that CSR can serve as a differentiation strategy to compete against other bidders. Managerial Summary: This study examines how companies can strategically improve their competitiveness in the market for government procurement contracts—a market of economic importance (15–20% of GDP). It shows that companies with higher social and environmental performance (CSR) receive more procurement contracts. This effect is stronger for more complex contracts, in the early years of the government–company relationship, and in more competitive industries. These findings indicate that firms’ CSR can serve as a signaling and differentiation strategy that influences the purchasing decision of government agencies. Accordingly, managers operating in the business‐to‐government (B2G) sector could benefit from integrating social and environmental considerations into their strategic decision making.