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Performance-based contracting (PBC) plays an increasingly important role in the defense industry. This paper aims to investigate factors that influence service provider’s willingness to accept PBC-induced risks. It also shows how these risks could be managed in a military service supply chain.

The case study focused on the relationship between a service provider and a customer that acted on behalf of other users in the defense sector. The contract involved the sustainment of a military engine in a complex supply chain.

The service provider’s performance attributability appeared to have a strong impact on its willingness to take PBC-induced risks. For the parts where the service provider did not have full control over the service performance, exclusions and Service Level Agreements (SLAs) were used to manage and mitigate the risks associated with uncontrolled performance. The service provider’s willingness to accept PBC-induced risks was also affected by its ability to make accurate forecasts, the applied growth path and the length of the contract.

This case has specific characteristics, unique by time (maturity of the technical system and supply chain) and place (market). It is recommended that results are tested in other research settings.

Organizations should be aware of the factors that influence a service provider’s willingness to bear PBC-induced risks. Customers should limit PBC to those parts of a contract where risks are of an acceptable level. Also, it is recommended to follow a phased growth path when it is not possible to make accurate forecasts in a PBC context.

This study is the first to address critical issues concerning the identification and management of risks under PBC in the defense industry.

This paper covers the development of a multidimensional contract administration performance model (CAPM) for construction projects. The proposed CAPM is intended to be used by the industry stakeholders to measure the construction contract administration (CCA) performance and identify the strengths and weaknesses of the CCA system for running or completed projects.

The research design follows a sequential mixed methodology of qualitative and quantitative data collection and analysis. In the first phase, contract administration indicators were collected from relevant literature. In the second phase, an online questionnaire was prepared, and data were collected and analyzed using the crisp value of fuzzy membership function, and structural equation modeling (SEM). The fuzzy set was chosen for this study due to the presence of uncertainty and fuzziness associated with the importance of several key indicators affecting the CCA performance. Finally, SEM was used to test and analyze interrelationships among constructs of CCA performance.

The data collected from 336 construction professionals worldwide through an online survey was utilized to develop the fuzzy structural equation model. The goodness-of-fit and reliability tests validated the model. The study concluded a significant correlation between CCA performance, CCA operational indicators, and the process groups.

The contribution of this paper to the existing knowledge is the development of a fuzzy structural equation model that serves as a measurement tool for the contract administration performance. This is the first quantitative structural equation model to capture contract administration performance. The model consists of 93 Construction Contract Administration(CCA) performance indicators categorized into 11 project management process groups namely: project governance and start-up; team management; communication and relationship management; quality and acceptance management; performance monitoring and reporting management; document and record management; financial management; changes and control management; claims and dispute resolution management; contract risk management and contract closeout management.

To build a more comprehensive understanding of factors affecting the success of service contracting, the purpose of this paper is to investigate the influences of service complexity, contract structure and contracting process on the buyer-perceived supplier performance in business-to-business (B2B) services.

A research model is developed based on transaction cost economics and the research on service contracting. The model is tested by the survey data collected. Professional focus groups on LinkedIn are used to generate the list of potential respondents. The sample consists of 177 purchasing professionals from 25 countries.

The results indicate that three major contract dimensions and follow-up management practices positively influence buyer-perceived supplier performance. Furthermore, service complexity amplifies the effects of incentives designed in the contract and the buyer’s follow-up contract management on perceived supplier performance.

The sample consists of respondents from 25 countries and provides good geographic coverage. However, the results should be generalized with caution because not all countries were represented equally.

The study suggests a framework and guidelines for purchasing managers to improve the design and management of service contracts to secure good performance from their supplier.

This paper contributes to understanding the performance-enhancing aspects of designing and monitoring service contracts in B2B contexts. It also adds to the knowledge of the role of service complexity in successful B2B service purchasing.

This study aims to examine the effect of supplier monitoring on procurement performance in the Tanzanian public sector, as well as how contract management difficulty moderates the effect of supplier monitoring on procurement performance.

In this paper cross-sectional data were collected from 179 Tanzanian public procuring organizations using a structured survey questionnaire. Confirmatory factor analysis (CFA) and the PROCESS macro were used to analyse the collected data.

Supplier monitoring has a positive and significant relationship with procurement performance in terms of cost reduction, lead times and buyer satisfaction. Furthermore, contract management difficulty has a negative moderating effect on the relationships between supplier monitoring and procurement performance dimensions.

Because public procurement is governed by laws and procedures, generalization of results should be done with caution. This is because the study is currently limited to Tanzanian public procurement. Apart from contract management difficulty, future research can look at other factors that may be needed to moderate the link between supplier monitoring and procurement performance.

Procurement practitioners must monitor major suppliers’ timeliness, product quality and order accuracy in order to improve procurement performance. Furthermore, proper contract management is required, which necessitates effectively reinforcing procurement contract managers’ responsibilities and providing contract management training for practitioners in order to control anomalies when suppliers and contracts are involved.

By adding a moderating variable, the study adds to the literature on supplier monitoring in public procurement and the on-going debate on supplier monitoring and performance.

This article aims to establish a dynamic Energy Performance Contract (EPC) risk allocation model for commercial buildings based on the theory of Incomplete Contract. The purpose is to fill the policy vacuum and allow stakeholders to manage risks in energy conservation management by EPCs to better adapt to climate change in the building sector.

The article chooses a qualitative research approach to depict the whole risk allocation picture of EPC projects and establish a dynamic EPC risk allocation model for commercial buildings in China. It starts with a comprehensive literature review on risks of EPCs. By modifying the theory of Incomplete Contract and adopting the so-called bow-tie model, a theoretical EPC risk allocation model is developed and verified by interview results. By discussing its application in the commercial building sector in China, an operational EPC three-stage risk allocation model is developed.

This study points out the contract incompleteness of the risk allocation for EPC projects and offered an operational method to guide practice. The reasonable risk allocation between building owners and Energy Service Companies can realize their bilateral targets on commercial building energy-saving benefits, which makes EPC more attractive for energy conservation.

Existing research focused mainly on static risk allocation. Less research was directed to the phased and dynamic risk allocation. This study developed a theoretical three-stage EPC risk allocation model, which provided the theoretical support for dynamic EPC risk allocation of EPC projects. By addressing the contract incompleteness of the risk allocation, an operational method is developed. This is a new approach to allocate risks for EPC projects in a dynamic and staged way.

The purpose of this paper is to determine best practices of aid agencies for outsourcing logistics to commercial logistics service providers (LSPs) in disaster relief. Moreover, it evaluates the application of the Delphi method for research in humanitarian logistics.

The paper is based on a two-round Delphi study with 31 experts from aid agencies and a complementary full-day focus group with 12 experts from aid agencies and LSPs.

The study revealed 12 best practices for outsourcing logistics in disaster relief and a compilation of more than 100 activities for putting these practices into action. Experts consider a proper balance between efficiency and compliance, a detailed contract and a detailed service request most important. Additionally, the Delphi method was found to be a promising technique for research on humanitarian logistics.

By critically examining the Delphi method, this study establishes the basis for a wider application of the technique in the field of humanitarian logistics. Furthermore, it can help to prioritize future research as the ranking of practices reflects the priorities of practitioners.

The paper provides guidance to practitioners at aid agencies in charge of outsourcing logistics.

This research is one of the first in the field of humanitarian logistics to apply the Delphi method. Moreover, it addresses the lack of literature dealing with approaches for building successful cross-sectoral partnerships.

The purpose of this paper is to investigate purchasing practices in service triads by exploring the link between ex ante contracting and ex post contract management and how these practices influence the satisfaction of buyers and suppliers (in concessionary arrangements) with their relationship in terms of meeting the needs of the buyer’s customers.

An in-depth exploratory multiple case study was carried out in a shop-in-shop context. Multi-method and multi-source data collection included interviews, documents and the contracts between buyer and supplier, providing evidence of the formal and relational structures in both the contracting and contract management stages.

The case findings provide evidence that behavioural standards established in a social contract are important prerequisites for the establishment and subsequent management of a formal contract. Second, this study shows that, when outsourcing core services in a service triad, a combination of performance-oriented and behavioural-oriented contract terms, covering a mix of topics related to both the customer-experience and to buyer-supplier-oriented aspects, contribute to aligning the buyer’s, suppliers’ and customers’ interests. The main findings are presented in a causal model and formulated as propositions.

This paper is one of the first studies to explore how core services are outsourced in a service triad. It provides evidence that the social contract between buyer and supplier influences the establishment of the formal contract as well as contract management, and a mix of contract topics, some related to the customers’ experience and others purely buyer-supplier oriented, contribute to the alignment of buyer’s, suppliers’ and customers’ interests.

Inter-organisational governance is an important enabler for information processing, particularly in relationships undergoing digital transformation (DT) where partners depend on each other for information in decision-making. Based on information processing theory (IPT), the authors theoretically and empirically investigate how governance mechanisms address information asymmetry (uncertainty and equivocality) arising in capturing, sharing and interpreting information generated by digital technologies.

IPT is applied to four cases of public–private relationships in the Dutch infrastructure sector that aim to enhance the quantity and quality of information-based decision-making by implementing digital technologies. The investigated relationships are characterised by differing degrees and types of information uncertainty and equivocality. The authors build on rich data sets including archival data, observations, contract documents and interviews.

Addressing information uncertainty requires invoking contractual control and coordination. Contract clauses should be precise and incentive schemes functional in terms of information requirements. Information equivocality is best addressed by using relational governance. Identifying information requirements and reducing information uncertainty are a prerequisite for the transformation activities that organisations perform to reduce information equivocality.

The study offers insights into the roles of both governance mechanisms in managing information asymmetry in public–private relationships. The study uncovers key activities for gathering, sharing and transforming information when using digital technologies.

This study draws on IPT to study public–private relationships undergoing DT. The study links contractual control and coordination as well as relational governance mechanisms to information-processing activities that organisations deploy to reduce information uncertainty and equivocality.

Contemporary supply chain relationships inherently rely on delegation of work between organizations and, thus, are subject to agency problems for which a wide range of governance mechanisms exist. This review of agency theory (AT), across four distinct fields, explains the connection between governance mechanisms and supply chain relationship types.

The study uses a systematic literature review (SLR) of articles using AT in a supply chain context from the operations and supply chain management, general management, marketing, and economics fields.

The authors categorize the governance mechanisms identified to create a typology of agency relationships in supply chains.

The developed typology provides parsimonious theory on different forms of supply chain agency relationships and takes a step towards a “supply chain-oriented agency theory” explaining and predicting relationship types and governance in supply chains. Furthermore, a future research agenda calls for more accurate measuring of agency costs, to examine residual gains alongside residual losses, to take a dual-sided perspective of agency relations and to adopt AT to examine more complex supply networks.

The review provides a menu of governance mechanisms and describes situations under which these mechanisms could be deployed to guide managers when developing their supply chain relationships.

The first review to combine and elaborate views from four major disciplines using AT as a lens to supply chain relationships. Expanding the traditional set of governance mechanisms provides academics and practitioners with a bigger “menu” of options to consider.

The main purpose of this research is exploring the tipping points for a radical shift in supplier (dis)satisfaction. This study identifies triggers and links them to consequences for the buyer–supplier relationship.

The Critical Incident Technique (CIT) was used to interview Dutch supplier representatives in the infrastructure sector, resulting in rich descriptions of 29 critical incidents, extracting first-hand information.

Safety issues, technical disputes and recruitment of supplier’s technical staff have been identified as tipping points for suppliers to become dissatisfied. Implementing performance-based contracting is another critical incident that caused irritation and disappointment. On a more operational level, dissatisfaction was provoked by tender errors and price discussions with the buyer. This study also identified tipping points by which dissatisfied suppliers abruptly turned into satisfied suppliers. The effect of a solution-oriented buyer intervention appears to be most powerful if this behaviour transcends prior expectations.

Consequences of misunderstandings and discussion between supplier and buyer may be manageable or repairable, depending on the causes and triggers that influenced a supplier’s dissatisfaction. An early warning system could prove its worth, so that buyers are not faced with unpleasant surprises.

Despite the growing number of studies, processes of how antecedents lead to supplier (dis)satisfaction are not well understood. Antecedents are predominantly investigated by cross-sectional survey data, giving little insights into micro-processes and actual interaction between buyers and suppliers. Although CIT has been applied in many disciplines, the technique is hardly used within the context of purchasing and supply management research.