Contractual learning and organizational design in public procurement

Abstract

Purpose – The purpose of this study is to empirically explore how contractual learning in public procurement is affected by organizational design. Design/methodology/approach – Two inductive case studies are based on semi-structured interviews and document analysis. Findings – The author finds that the consolidation of economic, technical and legal tasks in specific units can strengthen contractual learning in public procurement through specialization and the codification of contractual processes, and that the level of integration between units affects the type of learning that occurs. Particularly, the integration of economic and technical units promotes learning concerning control-oriented terms and legal integration in the procurement process leads to a more adaptive use of contractual safeguards. Research limitations/implications – Public procurement laws and regulations that constrain contractual adaptation appear to promote learning concerning safeguards and control-oriented terms. Contrary to previous research, the findings of this study indicate that stronger economic-technical integration may lead to the development of more control-oriented contracts, whereas integration of legal specialists promotes the development of more adaptive and less restrictive control-oriented terms in procurement contracts. Overall, this result presents two novel mechanisms for linking organizational design to contractual learning. Practical implications – The author suggests that public organizations should develop dedicated technical units for contract governance. Focusing specialized technical knowledge in the post-signing phase of the procurement process provides an important feedback mechanism for finding new contractual solutions and developing better procurement contracts. The author also suggests that public organizations should aim to integrate legal specialists in the early phases of the procurement process to promote a nuanced use of contractual safeguards. Social implications – Contractual learning facilitates a better use of public resources in procurement. Originality/value – This study is a novel exploration of contractual learning in the context of public procurement.