Contracts, Agency Vulnerability, and the Allocation of Federal Funds

• Author: Luona Lin,Stuart Kasdin
• Date: 01 August 2019
• DOI: 10.1177/0275074019849124
• Published date: 01 August 2019
• Subject Matter: Articles

https://doi.org/10.1177/0275074019849124

American Review of Public Administration

2019, Vol. 49(6) 720 –732

© The Author(s) 2019

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DOI: 10.1177/0275074019849124

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Article

Introduction

These days it is not often that we have good news to report

about an American manufacturer. So as a strong supporter of

American manufacturing and local manufacturers, I am very

proud to be able to announce today a new $670,000 U.S.

Department of Defense contract for Hoist Liftruck . . . This

contract is supporting almost 40 jobs here at Hoist and is

contributing to the demand that is spurring Hoist to hire new

workers., & it’s not just Hoist and its workers that reap the

rewards. Hoist’s supply chain is based heavily in the Midwest,

which means that there are a lot of other regional

manufacturers that are going to see more business as a result

of this contract. Rep. Dan Lipinski (D-IL), October 2011

press release.

Having founded Hoist Liftruck and built it into a U.S.

manufacturing stalwart over the last 17 years, I can tell you that

this contract is supporting jobs not just at Hoist but at the many

other Midwest companies in our supply chain . . . On behalf of

Hoist Liftruck and its employees, I want to thank Congressman

Lipinski for standing up for Hoist and American manufacturing.

Hoist Liftruck President Marty Flaska, quoted in Lipinski’s

press release.

For the most part, the press release seems unremarkable.

A Representative is claiming credit for a sizable contract

being procured, through his assistance, for his district.

Representatives want to show how they are getting the most

for their constituents, which is how they get reelected (Fenno,

1973; Mayhew, 1974).

As for the federal agencies awarding contracts, they

must choose which vendors to award contracts. They are

bound by the Federal Acquisition Regulation (FAR), but

typically agencies have significant discretion to adminis-

ter contracts according to agency priorities (Bickers,

Evans, Stein, & Wrinkle, 2007; Rundquist & Carsey,

2002; Wilson, 1973). In this article, we examine what

motivates the federal agencies in awarding contracts. That

federal agencies may have their own self-interested

motives is not itself new to the literature (Banks &

Weingast, 1992; Krause, 1999; Moe, 1984; Niskanen,

1994). Multiple authors have proposed that strategic con-

siderations play a role in awarding grants or contracts,

with additional funds directed to senators or representa-

tives who are supporters of the president, located in swing

districts (Gordon, 2011; Hudak, 2014), are ideological

allies of the Secretary or President (Berry, Burden, &

Howell, 2010; Bertelli & Grose, 2009; McCarty, 2000), or

849124ARPXXX10.1177/0275074019849124The American Review of Public AdministrationKasdin and Lin

research-article2019

1City of Goleta, CA, USA

2American Psychological Association, Washington, DC, USA

Corresponding Author:

Stuart Kasdin, Mayor Pro Tempore, City of Goleta, Goleta, CA 93117, USA.

Email: skasdin1@gmail.com

Contracts, Agency Vulnerability,

and the Allocation of Federal Funds

Stuart Kasdin1 and Luona Lin2

Abstract

Legislators have the potential for credit claiming from agency spending in a congressional district only when the awarded

contracts or grants are sufficiently large to be noticed or appreciated. Therefore, unlike previous research on distributive

politics, we examine the allocation of contracts considering the size of the contracts, not just the overall spending or the

numbers of contracts per congressional district. We use a difference-in-difference analysis to evaluate how agencies altered

their allocations of contracts in response to the 2006 congressional elections, in which partisan control of the Congress

changed to the Democrats. We find that federal agencies responded to the election by allocating larger contracts to

Democratic districts. In addition, we find that agencies whose programs received lower scores on the Bush administration’s

Program Assessment Rating Tool (PART) allocated larger contracts to Democratic than Republican districts than did agencies

whose programs received higher PART ratings.

Keywords

procurement, distributional politics, pork