Search results

The purpose of this paper is to present the results of contract management process maturity assessments in the US Navy using a process capability maturity model. The maturity model is used to benchmark an organization’s contract management process maturity and to use the assessment results to develop a road map for implementing process improvement as well as knowledge-sharing initiatives.

This is survey-based research on benchmarking contract management processes in the US Navy. A web-based assessment tool was deployed to US Navy contracting officers located at aeronautical systems, sea systems, and logistics support contracting agencies. The assessment tool consists of survey items related to the use of contracting best practices. The survey responses are then used to calculate the agency’s contract management process maturity level.

The benchmarking results reflected higher maturity levels in the pre-award contracting processes (Procurement Planning, Solicitation Planning, and Source Selection), while lower maturity levels were reflected in the post-award contracting processes (Contract Administration and Contract Closeout). The research findings related to process capability enablers also reflected higher mean scores for the pre-award processes and lower mean scores for the post-award processes. These maturity levels and process capability enabler scores reflect the extent of the implementation of contracting best practices within the Navy contracting agencies.

This research uses a purposeful sampling approach designed to acquire data on organizational contract management processes. The assessment survey was administered only to qualified Navy contracting officers. The Navy contracting agencies are responsible for procuring billions of dollars in supplies and services in support of the Navy mission. Although the assessed contracting agencies procure different types of systems, supplies, and services, the contract management processes used are common to all Navy, Army, Air Force, and other US federal government agencies. The conclusions based on the analysis of these benchmarking assessments may be applicable to Department of Defense (DoD) and other government agencies.

The findings suggest that benchmarking can be effective in measuring and improving contracting process capability within the Navy. Benchmarking contracting processes can have far-reaching effects throughout the DoD. The Under Secretary of Defense’s has mandated initiatives related to improving both pre- and post-award contracting processes. The use of these benchmarking assessments can be instrumental in tracking the achievements of these process improvement initiatives. Additionally, the US Congress is leading the push for auditability in procurement operations. By benchmarking and improving its contracting processes, the DoD will be winning the battle toward integrity, accountability, and transparency of its financial operations.

Benchmarking contracting processes can also have far-reaching effects in society. Many governments are focussing on integrity, accountability, and transparency in public procurement. International organizations such as Transparency International (TI) have identified process capability and process integrity as key for reducing the potential for procurement-related fraud, waste, and abuse. Additionally, NATO member countries and partner nations are focussing on the value of assessing and improving procurement processes for strengthening transparency and accountability. The value of benchmarking and improving contracting processes is gaining much attention in global public procurement agencies as they strive for accountability, integrity, and transparency in their governance processes.

There are multiple reports on deficiencies in DoD’s contract management processes, identifying poor contract planning, and Contract Administration as just some of the critically deficient areas. In response, the DoD is increasing its emphasis on developing its workforce competence through education initiatives. However, very little attention is being paid to benchmarking contract management processes. This research reflects the value of benchmarking DoD’s contract management process maturity and using the results for implementing process improvement initiatives. Using process benchmarking data, agencies can identify process improvement initiatives that will ensure government tax dollars are spent in the most effective and efficient ways.

The purpose of this paper is to understand how buyers and suppliers in supply chains learn to align their performance objectives and incentives through contracting.

Two longitudinal case studies of the process of supply chain alignment were conducted based on 26 semi-structured interviews and 25 key documents including drafts of contracts and service level agreements.

The dynamic interplay of contracting and learning contributes to supply chain alignment. Exchange-, partner- and contract framing-specific learning that accumulates during the contracting process is used to (re)design pay-for-performance provisions. Such learning also results in improved buyer-supplier relationships that enable alignment, complementing the effect of contractual incentives.

The study demonstrates that the interplay of contracting and learning is an important means of achieving supply chain alignment. Supply chain alignment is seen as a process, rather than as a state. It does not happen automatically or instantaneously, nor is it unidirectional. Rather, it is a discontinuous process triggered by episodic events that requires interactive work and learning.

Development of performance contracting capabilities entails learning how to refine performance incentives and their framing to trigger positive responses from supply chain counterparts.

The paper addresses supply chain alignment as a process. Accordingly, it stresses some important features of supply chain alignment.

Focuses on the contract process as a source of information for managers seeking to contract more effectively. Draws on the findings of a multiple‐case comparative study undertaken to understand service‐contracting processes and the factors that influence them. Offers specific ideas for ways to manage contracting processes more effectively. Includes case examples to clarify the points raised.

Alpha contracting is a collaborative effort between a buyer and supplier during contract formation to maximize efficiency and effectiveness. Collaborative efforts between the United States Department of Defense and its suppliers have recently been scrutinized. Although several benefits of Alpha contracting are identified within the literature, the phenomenon is not ubiquitous nor is it well understood. Using the case study methodology, this research explores Alpha Contracting to define success and to identify its contributing factors. Additionally, this research identifies antecedents for and consequences of use, variations of the processes employed, and some misuse. The study culminates in the development of a conceptual model of collaborative pricing, and provides five recommendations for enhanced use.

This paper aims to explore selected real-world procurement fraud incidents in the US Department of Defense (DoD) and the implications of these incidents to the DoD’s contracting processes and internal controls.

This paper analyzes actual procurement fraud incidents and identifies in which phase of the contract management process the fraud occurred and which internal control component was associated with the fraud scheme.

The fraud incidents generally occurred during the source selection and the contract administration phases and involved the control activities, monitoring and control environment components of internal control.

The fraud incidents are analyzed using contract management and internal control frameworks adopted by the US Government. Recommendations are developed for improving contracting processes and internal controls as an approach to deterring and detecting procurement fraud and may be applicable to other international public procurement bodies.

Governments are ensuring auditability in public procurement as a means of improving agency governance. The research findings suggest that an emphasis on capable contracting processes and effective internal controls should be adopted for fighting procurement fraud.

Ensuring auditability in public procurement has a far-reaching effect in society. The value of capable processes and effective internal controls is gaining much attention in public agencies, as they strive for accountability, integrity and transparency in their governance processes.

By emphasizing capable processes and effective internal controls, governments can apply a strategic approach to detecting and deterring fraud and thus ensure that government monies are spent in the most effective and efficient ways.

The purpose of this paper is to increase the understanding of the main challenges of the contracting process and project contracts in the context of project business characterized by a high level of complexity and uncertainty. The authors argue that understanding contracting as a flexible process and as a business tool will contribute to creating more value in projects which are implemented in constantly changing circumstances or which require gradual and iterative development.

This is a conceptual paper with illustrative examples from the software industry.

A prevailing approach for both managing contracts and the contracting process focuses on careful planning and drafting of contracts that protect each party in the case of conflicts and disagreements. The underlying assumption is that all activities can be planned and documented in a formal contract. According to this approach, the contracting process is seen only as a bargaining negotiation and the project contract as a detailed agreement of the responsibilities and safeguarding clauses to protect one’s position in the event of conflicts and failures. However, in the context of project business characterized by complexity and uncertainty, there is a need for flexible project contracts. The authors suggest that there are two fundamentally different approaches to implementing flexibility in both the contracting process and the project contract: postponing the decision until there is adequate information for decision making or making decisions that allow flexible adaptation to changes during the project lifecycle.

The authors suggest that organizations in project business should pay closer attention to how contracts are formed and how flexibility is introduced to projects. Organizations are encouraged to see contracts as a business tool, not as rigid documents which are taken into use in case something goes wrong.

This paper contributes to the understanding of how to adapt the contracting process to overcome challenges related to uncertainty, especially during the early phases of the project lifecycle. The authors provide a novel perspective on contracting as a process that extends over the lifecycle of a project and on the project contract as an agreement between parties formed during the contracting process. This perspective includes formal contract documents as well as various other documents, oral communication, commitments, actions and incidents.

New business models, such as life‐cycle contracting, challenge the narrow and static understanding of contracts with hard and precise terms. The aim of this paper is to examine how flexibility could be incorporated into contracting processes.

The data of the paper have been gathered applying the triangular method; first, by interviewing key personnel participating in contracting at eight Finnish firms; second, examining contract and other documents of those companies; and third, studying earlier research on contracting practices. Theoretically, the paper is based on relational contract and proactive approaches to law on the one hand and on organizational studies based on new institutional economics on the other.

Flexibility is often introduced to contracts with relational methods, relying on good personal relationships between business partners or negotiation power and negotiation skills. Contract documents often do not contain mechanisms for dealing with contingencies, or “soft” contract terms. The paper finds the following reasons that may explain this. First, firms heavily rely on model contracts to develop their own templates and the lack of contract models in new business areas hinders firms to develop their templates. Second, unfamiliarity with using soft elements makes it difficult to use them. Additionally, in some cases firms may prefer using relational capability.

The findings need verification from further multidisciplinary empirical research.

The findings support firms in developing their contracting capabilities to meet the requirements of the changing business environment and gain competitive advantage from well‐organized contracting.

This paper is one of the first empirical studies comprising also the legal approach.

This study aims to investigate the influence of contractual flexibility on different types of conflict, determine if contractual flexibility is significantly correlated with project success between contracting parties, verify the mediating effect of project conflicts on the relationship between contractual flexibility and project success and examine the relationship between different types of conflicts and project success in megaprojects.

A theoretical model was developed and a structured questionnaire survey was conducted with 468 professionals. The structural equation modeling technique was used to analyze the data.

The results showed that both types of contractual flexibility – term and process flexibility – were correlated with and significantly positively affected project success, and term flexibility was found to have a greater influence. The introduction of project conflicts significantly weakened the relationship between contractual flexibility and project success, verifying the partial mediating effect of conflicts. All types of project conflicts play a destructive role in achieving project success; relationship conflict had the largest negative effect. Contractual flexibility affects two paths with respect to project success: the direct path (contractual flexibility → project success) and the indirect path (contractual flexibility → conflict → project success). The direct effect of contractual flexibility on project success is positive; the corresponding indirect effect is negative. The direct effect is greater than the corresponding indirect effect.

Different types of conflicts may mutually transform to extent certain degree. However, this study did not address the potential influence of conflict transformation on project success. The results implied that more emphasis should be placed on contractual terms, particularly on developing flexible terms in the contractual document, when implementing megaprojects. Meanwhile, this study reveals the effects of conflicts on project success in megaprojects, which provides a useful reference for project stakeholders to avoid the negative effect of conflicts.

This study provides a better understanding of the relationship between contractual flexibility, types of conflicts in megaprojects and a reliable reference for the project manager to effectively deal with these related issues. This implies the contracting parties strengthen communication and cooperation to establish a trust mechanism, while reducing the negative influence of project conflicts and enhancing the positive effect of contractual flexibility.

Few studies have investigated the effects of contractual flexibility on conflict and project success in megaprojects; this study contributes significant theoretical and practical insights to contract management and conflict management and provides a reliable reference to achieve project success.

This paper examines automated contract writing systems, a vital aspect of public procurement which has replaced the more manual methods of drafting of contracts used in the past. Using the system of the U.S. federal government as an illustration, the various components of a contract writing system are detailed and discussed, distinguishing contract writing from eprocurement and demonstrating how a bifurcated approach has been adopted for contracting automation. The larger implications of this dual nature are analyzed along with misconceptions about contract writing systems and the contrast between the perspectives of procurement versus finance. Future research devoted more to cross-disciplinary issues and human factors affecting contract writing, rather than just systems development issues, may offer an opportunity to improve the effectiveness of public procurement automation.

Aims to show that workflow management needs to rethink its basis of discussion in order to meet today's challenges and to provide adequate IT support for heterogeneous workflow networks.

First, the need for flexibility in relating resources in workflow management is examined in more detail. Second, some approaches to managing workflows in heterogeneous networks are inspected and it is found that all of these improve flexibility on the basis of contracting services. Third, it is elaborated how processing by contract supports decentralized resource management through dynamically interrelating social and technical services driven by a cycle (“wheel”) of execution and monitoring, evaluation and demand, as well as selecting and contracting.

Conclusions are drawn for systems architecture and implementation to guide the design of internet‐enabled workflow support.

Important questions for the research agenda are: how can one enrich application‐oriented workflow modelling languages in order to describe processes as consisting of heterogeneous services? How should one design and implement workflow engines which enable the turning of the “wheel” with the support of integrating human activities and technical agency as workflow process services?

The idea of processing by contract may lead to new workflow concepts and technology to meet the challenges of an internet economy based on the “pay as you go” principle.

Whereas the workflow paradigm of the past may be phrased as processing by definition, i.e. process execution according to predefined process patterns and resource relations, the idea of processing by contract is suggested, i.e. a mode of process execution driven by recurrent process evaluation and service contracting.