Does history really repeat itself? An empirical investigation of recurring misconduct violations in public procurement

• Published in: Journal of purchasing and supply management 2024-01, Vol.30 (1), p.100893, Article 100893
• Main Authors: Kistler, Justin T., Sharma, Luv, Jayaram, Jayanth, Eckerd, Stephanie
• Format: Article
• Language: English
• Subjects: Misconduct violations; Organizational learning; Public procurement
• ISSN: 1478-4092; 1873-6505
• DOI: 10.1016/j.pursup.2023.100893

Public procurement of goods and services accounts for a significant portion of government budgets. Among contracts awarded annually by the United States federal government, a disproportionate amount of total spend is given to a relatively small number of contractor firms, many of whom have committed government contract misconduct in the past. We leverage insights from the contracting literature and organizational learning theory to understand the relationship between past contract misconduct and the likelihood of a subsequent contract misconduct violation, along with contextual factors that could influence this relationship. Using composite misconduct data captured from a longitudinal dataset of United States Department of Justice (DOJ) public procurement, a probit regression analysis reveals that firms with a history of government contract misconduct violations are increasingly likely to commit a subsequent violation, yet this relationship is not linear. Further empirical analysis reveals characteristics of contracting firms and purchasing relationships which moderate this phenomenon. Our findings contribute to the literature by providing empirical support regarding the relationship between past and future contract misconduct violations within public procurement relationships. We also offer several implications to practitioners and policymakers to support the identification and management of repeat contract misconduct violators. •Past contract misconduct is associated with higher likelihood of ensuing violations•The relationship between past and subsequent contract misconduct is curvilinear•Organizational learning influences the link between past and subsequent misconduct