Statistical analysis of US government supply chain contract breaches
Abstract
Approximately half of US government supply chain procurement contracts failed to meet all objectives. In 2018 the US government spent almost US$2bn on procurement contracts. Failed procurement projects represent a lot of public tax-payer dollars which are wasted each year. The US government does not necessarily intend for its government procurement contracts to fail, but when they are awarded on a fixed firm price basis, the entire project management is transferred to civilian contractors for a specific cost. When something goes wrong, contractors are forced to adjust the other parameters such as time, scope and/or quality. It appears many government supply chain procurement contracts are failing despite substantial analysis of project data by academic scholars and practitioners. In the literature, most researchers could not statistically identify the underlying causes of government procurement contract failures. In fact, the sample sizes surpassed 10,000 and in one case almost 60,000 cases were examined without generating a conclusive statistical result. It was clear a new study like ours was warranted. Thus, in this study, we collected a large sample of procurement project data from US government contractors. We tested several hypotheses in an attempt to identify which conditions affected government procurement contract breaches. We applied robust parametric statistical techniques, namely logistic regression, to test the hypotheses. We developed a statistically significant model which adequately explained US government supply chain procurement contract performance. This paper is in a scholarly format using statistical techniques which are primarily aimed at an academic audience rather than practitioners. We followed the well-known American Psychology Association conventions for writing style which resulted in this paper having a strong academic tone. Nonetheless, the results ought to be of interest to scholars and practitioners alike. Scholars will be able to replicate our research design with new sample sizes of at least 1,000 in other states or countries and cite our findings. Practitioners and government procurement programme managers should find it relevant that our statistical model correctly classified 67 per cent of US government procurement contract performance, with an 11 per cent effect size using only two predictors (project manager certification and ISO quality registered). We found that if a project manager was professionally certified, this increased the likelihood of contract success by 2.3 times. Decision makers could use this model for procurement policy revision or to inform selection criteria in government contract awards.
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Author's Biography
Kenneth David Strang is a globally recognised scholar with hundreds of scholarly publications and 37 years’ experience. Kenneth is a university emeritus professor having taught business administration, economics/statistics, management, marketing/consumer behaviour, human resource management, operations research, project management, organisational behaviour and supply chain management. Kenneth supervises PhD and doctoral students at several universities. He wrote a best-selling research methods textbook, along with papers in organisational analytics, learning style/culture and leadership, plus he was a contributor to the ISO/Project Management Body of Knowledge. Kenneth has a doctorate in project management (operations research), an MBA (strategic management), a BSBA (marketing), an AS (information technology) all with summa cum laude/honours. In addition, he is an internationally licensed project management professional (PMI, USA), a Fellow Life Management Institute with distinction (LOMA, USA), a certified network administrator (Novell, USA), a certified research professional and a certified supply chain specialist/certified procurement professional (IIPMR, USA). Kenneth has managed projects worth over US$8m, and has won many awards including a Behavior Energy Climate Change Fellowship from the American Council Energy Efficient Economy (funded by Stanford University, Alfred P. Sloan Foundation, and Morris Foundation), an Emerald Literati award, the Duke of Edinburgh community service medal, teaching awards and presidential citations. He is editor-in-chief of an academic journal and associate editor on others. He worked for organisations including University of Technology as a professor, Blue Cross as an analyst and IBM as a systems programmer/engineer. He regularly volunteers in the community to promote social good.
Maria Perez is a veteran in the US Navy, and a US Department of Defense Civilian Contracting Officer Representative/Project Management Analyst since 2011. She has over 20 years working in the corporate financial industry including bookkeeping and accounting operations. Maria is also an adjunct professor (since 2014), teaching finance to undergraduates at St. Leo University. She has an AS in accounting and business administration from Essex County College and a BS from Rutgers University with a major in criminal justice, and minors in accounting and business administration. She is certified as a Six Sigma Green Belt in financial services by Villanova University. Maria also has an MBA in finance from Capella University. She obtained the following certifications from the Defense Acquisition Workforce Improvement Act (DAWIA): Contracting Level I, Business/Financial Management Level I, Information Technology Acquisition Level II and Program Manager Level II. She is currently finishing a doctorate in programme management.
Citation
Strang, Kenneth David and Perez, Maria (2021, March 1). Statistical analysis of US government supply chain contract breaches. In the Journal of Supply Chain Management, Logistics and Procurement, Volume 3, Issue 3. https://doi.org/10.69554/NNBU8410.
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