Managing Public Service Contracts: Aligning Values, Institutions, and Markets*

This chapter argues that effectively managing or researching the three stages of the contracting process requires an appreciation of the intersection of three factors: public values, institutions, and service markets. It offers public managers a comprehensive strategic framework for practicing contract management. It is founded on the interaction of three central factors culled from the strategic management and planning, public law and institutions, and economics literatures. The chapter illustrates what the existing research suggests about how managers can use the lenses of public values, institutions, and service markets to improve service delivery. It examines the interaction of these factors in three key stages of contract management: deciding whether to deliver services directly or through contract, selecting vendors to produce services, and deploying monitoring tools for overseeing the implementation of contracts. The chapter reveals the tradeoffs inherent in managing service delivery, illustrates which tradeoffs vary across circumstances, and suggests how contracting can be improved through more effective public management.