The root causes of contract administration problems
| DOI | https://doi.org/10.1108/JOPP-11-02-2011-B001 |
| Published date | 01 March 2011 |
| Date | 01 March 2011 |
| Pages | 171-189 |
| Author | Richard J. Sebastian,Bill Davison |
| Subject Matter | Public policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public Finance/economics,Texation/public revenue |
JOURNAL OF PUBLIC PROCUREMENT, VOLUME 11, ISSUE 2, 171-189 SUMMER 2011
THE ROOT CAUSES OF CONTRACT ADMINISTRATION PROBLEMS
Richard J. Sebastian and Bill Davison*
ABSTRACT: To help procurement professionals identify the root causes
of contract administration problems, we present an organizational
behavior problem solving conceptual framework which consists of a
comprehensive exposition of potential personal (e.g., personality) and
environmental (e.g., technology) causes of behavior. We then
illustrate how the causal factors from the framework can be mapped
to the procurement process and its problems. We expect that
procurement professionals will be able to use the framework to
identify root causes in post-mortem analyses of contracts or
elsewhere in the procurement process to mitigate risks. We also
expect that management will use the framework to address the
organizational behavior root causes of problems, thereby improving
the systems and processes it controls or influences and, in turn,
minimizing or eliminating contract administration risks. Future
research can evaluate the usefulness of the framework.
INTRODUCTION
“The need for more affordable and effective government
combined with trends towards revitalizing human resources capacity
and redesigning service delivery are dramatically affecting the
structure and culture of public organizations.” (Robillard, 2001) As
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* Richard J. Sebastian, Ph.D., is a Professor, Department of Management,
St. Cloud State University. His research interests are in contract
administration, workplace aggression and incivility, and fan loyalty. Bill
Davison, MA, is Director, Purchasing Division, Stearns County, Minnesota,
US. His research interests are in contact administration.
Copyright © 2011 by PrAcademics Press
172 SEBASTIAN & DAVISON
budgets are reduced and the demands for services increase, public
agency managers are looking for ways to improve the budget
allocation and procurement process. An effective decision-making
process should incorporate an understanding of the overall costs of
each of the programs and the associated risks. The public sector has
begun to adopt integrated risk mitigation as a methodology to
improve the decision-making process. Canada has adopted, as
policy, the incorporation of integrated risk management into project
management (Robillard, 2001). “Integrated risk management is a
continuous, proactive and systematic process to understand, manage
and communicate risk from an organization-wide perspective. It is
about making strategic decisions that contribute to the achievement
of an organization's overall corporate objectives. Integrated risk
management requires looking across all aspects of an organization to
better manage risk. Organizations that manage risk organization-wide
have a greater likelihood of achieving their objectives and desired
results. Effective risk management minimizes losses and negative
outcomes and identifies opportunities to improve services to
stakeholders and the public at large” (Robillard, 2001, p. 6).
The four elements of integrated risk management are the
following
1. Developing the corporate risk profile,
2. Identifying the likelihood of occurrence and consequences of
problems,
3. Developing a risk mitigation plan,
4. Ensuring continuous risk management learning.
Based on a conceptual model developed by Davison and Wright
(2004), our past research has investigated and identified the most
common contract administration problems (e.g., delays) for different
types of contracts (e.g., construction) as well as the most likely
consequences of these problems when they do occur and discussed
how our research could be used to develop risk mitigation plans. In
other words, we collected data relevant to elements 2 and 3 of
integrated risk management (Davison & Sebastian, 2009 a, b). Thus,
this previous research provided information on what can happen but
did not address why it happens. Our next goal, therefore, is to
examine ways to incorporate continuous risk management learning
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