Your Competitive Side Is Calling: An Analysis of Florida Contract Performance

• Published date: 01 January 2022
• Author: Benjamin M. Brunjes
• Date: 01 January 2022
• DOI: http://doi.org/10.1111/puar.13430

Research Article

83

Abstract: Competition over the allocation of scarce resources motivates many public policy choices, and increasingly

influences the management of public organizations. With the rise of the business-like approach espoused by adherents of

“new public management,” competitive mechanisms are increasingly used in the public sector to improve organization

and program performance. Despite the wide acceptance of competition as a viable method to improve public

management, little large n empirical work has been done to determine whether competition improves performance,

especially in the networked, cross-sectoral setting of modern governance. Analyzing nearly 20,000 Florida contracts

over a three-year period, this research explores whether competitive sourcing procedures lead to improved contractor

performance. Results show that competitive sourcing may be associated with higher contract spending and undesirable

contract outcomes. Other factors, including experience, existing relationships, and lower transaction costs, are more

likely to lead to better performance.

Practitioner Points

• Competition is theorized to drive down costs, encourage innovation, and help hold contractors accountable

for their work.

• Competitively sourced contracts are more likely to experience cost overruns and to terminate early than

noncompetitive contracts, suggesting that competition may not always be the best approach.

• Instead, agency-contractor relationships and goal alignment are better predictors of good performance.

Competition has always been central to the

American political system. In Federalist No.

51 James Madison charges that the federal

government must be structured to align branches

in direct competition, with ambition set to counter

ambition (Madison1788). Madison argues that

such a system fragments authority and reduces the

possibility of concentrations of power. The ideas

presented in The Federalist led to the constitutional

system of checks and balances that undergird

American governmental structures, and continue to

guide public institutions today.

In recent years, some have advocated for making

public administration more business-like, particularly

through competitive, market-based approaches

(Eggers and Macmillan2013; Osborne and

Gaebler1992; Savas2000). Specific mechanisms

have included privatization, contracting out, and

competition between government agencies over scarce

resources (Salamon2002; Savas and Schubert1987).

In theory, competition can drive down prices and

reduce monitoring costs as firms respond to the

threat of substitution. As a result, market competition

seemingly provides a silver-bullet for one of the

long-standing problems in public administration:

increasing both efficiency and accountability

simultaneously. Consequently, contracts are one way

that governments have attempted to “do more with

less”—a refrain that originated during Al Gore’s

National Performance Review (Gore1993).

Despite this potential promise, little has been done to

assess whether competition is improving performance.

Instead, the practical trend has been to implement

business-like procedures without a full understanding of

how they may change public organizations (Vrangbæk,

Petersen and Hjelmar2015), while assuming that

organizational and program performance will be

improved (Amirkhanyan and Lambright2017;

Brudney etal.2005; Carboni2017; Ferris and

Graddy1986; Johnston, Romzek and Wood2004).

In theory, competitively solicited contracts, which

benefit from market forces, should perform better

than noncompetitive contracts. Indeed, early research

suggested that market mechanisms could reduce costs,

especially for simple goods and services (Bingman and

Benjamin M. Brunjes

University of Washington

Your Competitive Side Is Calling: An Analysis of Florida

Contract Performance

Public Administration Review,

Vol. 82, Iss. 1, pp. 83–101. © 2021 The

Authors.

Public Administration Review

published by Wiley Periodicals LLC on

behalf of American Society for Public

Administration.

DOI: 10.1111/puar.13430.

Benjamin M. Brunjes is an assistant

professor at the Daniel J. Evans School

of Public Policy and Governance at the

University of Washington. His research

focuses on public management, government

contracting, and cross-sector relationships.

Email: brunjes@uw.edu

This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited,

the use is non-commercial and no modifications or adaptations are made.

The copyright line for this article was changed on 21 January 2022

after original online publication.

84 Public Administration Review • January | February 2 022

Pitsvada1997; Savas1977; Savas and Schubert1987). At the same

time, there is increasing evidence that cooperation and collaboration

may also improve performance, particularly given the complexity of

modern public problems (Agranoff2005; Amirkhanyan, Kim and

Lambright2014; Denhardt and Denhardt2000). Collaboration

scholars argue that complex relationships between diverse partners

require active management, including establishing conditions of

dependence, processes for management, and building interpersonal

trust, norms, and mutuality (Agranoff2005; Thomson and Perry2006).

As contracts become more relational and the contracted work becomes

more complex, it is worth investigating whether competitive forces

still promote the same advantages previously predicted (Bertelli and

Smith2010; Brown, Potoski and Van Slyke2013).

Using data from the Florida Accountability Contract Tracking

System (FACTS), this analysis builds on previous competition and

collaboration research, investigating the extent to which competition

and established relationships influence contractor performance.

Although there has been wide recognition of the increased use of

contracts as a tool for policy and program implementation, contract

management and contractor performance remain understudied.

Additional research is necessary to ensure that public contracting

officials and political decision-makers understand the risks and

benefits associated with using contracts in the public sector.

The next section describes the contracting process in Florida, providing

some essential background into the competitive mechanisms and

management techniques that public officials use. Then, a review of the

literature is used to motivate hypotheses about how contracting officials

might use management steps to influence contractor performance. The

following section presents the data and methods used and describes the

analytic findings. This research concludes with implications for both

scholars and practitioners of public administration.

The Contracting Process: Florida

This analysis focuses on contracts in the state of Florida because of

the state’s approach to competition and its procedures to assess and

track contractor performance. This section introduces the context of

contracting in Florida and explains how that context facilitates the

analysis of both competition and contractor performance.

Preference for Competition

Florida has been at the forefront of the movement to make

government more like business. Recent executives have promoted the

use of competition to improve public programs. Ron DeSantis has

promoted “pro-market, limited government reforms.”1 Rick Scott

had a long background in private sector management and promised

to bring business-like practices to government when he was elected

in 2011.2 His predecessor, Charlie Crist, held many of the same

beliefs.3 As a result, Florida has placed a premium on competition-

based management practices since at least 2007. These preferences for

competition are codified in the Florida Statutes covering contracting

and procurement. Title XIX, Chapter287.057 of the Florida Statutes

holds that every contract worth more than $35,000 should be

competitively sourced, requiring Florida contracting officials to interact

with the market for most contracts.

Competitively sourced contracts in Florida use one of three

solicitation procedures: sealed bids, requests for proposals, and

negotiation. Sealed bids, also known as “invitations to bid,” are used

when contracting officials can easily define the scope of the work to

be performed or are purchasing a specific quantity of a commodity

(Florida Title XIX, Chapter287.057(1)(a)).4 The qualified bidder

to present the lowest price wins the bid. In Florida, procurements

not using sealed bids must justify a rationale for why, indicating a

strong preference for this approach if possible (Florida Title XIX,

Chapter287.057(1)(b)).

Requests for proposals (RFPs) are used when contracting officials

can define the general class of service or good needed, along with

a specified set of deliverables. RFPs include statements describing

the good or service sought, the relative importance of evaluation

criteria, and information about the possibility for renewal. Decisions

on winning proposals can include considerations of annual and total

costs, vendor experience, technical ability, and other factors (Florida

Title XIX, Chapter287.057(1)(b)(3)).

Florida also employs invitations to negotiate, which are used to

procure more complex goods and services where the state may

need to work closely with the vendor during the bidding process to

determine how to achieve the state’s overarching goal(s). Invitations

to negotiate must specify the question(s) to be explored or the

problem(s) to be solved (Florida Title XIX, Chapter287.057(1)

(c)). Evaluation criteria for these solicitations must include

vendor previous experience, and invitations must clearly specify

other criteria. Once replies are received, contracting officials

then negotiate with the most qualified vendors—that is, they

communicate directly with the vendors one-on-one to determine

the vendor’s capabilities. The agency may award one or more

contracts, depending on what officials determine is in the state’s

best interest. Though negotiation is usually reserved for particularly

complex goods and services, it can also be used if the state receives

two or fewer bids (Florida Title XIX, Chapter287.057(5)).

In each case, Florida clearly prefers competitive bidding, only

providing exemptions for complex or relational work (artistic

services, academic program reviews, lectures by individuals,

disability services, etc.). Even in the case of commodities which are

manufactured by only one firm and will have to be sole sourced, the

state requires officials to advertise the need for more than seven days

to ensure that another vendor cannot be found (Florida Title XIX,

Chapter287.057(3)(c)). Clearly, competition is central to Florida’s

approach to public procurement.

Yet, despite Florida’s preference for competition, there are also

many legal exemptions that allow public contracting officials to

circumvent the marketplace. In a few cases, public agencies are

granted exemptions for major projects, emergency needs, and

intergovernmental transfers. For example, the Department of

Environmental Planning (DEP) is allowed to seek two or fewer bids

for preapproved site rehabilitation projects, while the Department

of Transportation (DOT) has noncompetition exemptions for

emergency repairs and certain projects at seaports, railways, and

airports. State law identifies dozens of other exemptions that

span all agencies, covering a range of possible contracts and

situations.5 Many other jurisdictions in the U.S., including the

federal government, have similar kinds of exemptions, which exist

to facilitate rapid procurement when needed (Katayama1968),