Real costs are defensive effort, risk aversion, lack of initiative, and failed partnernships

Opportunism, the pursuit of self-interest by means of duplicity and guile, is a key concept in neo-institutional economics (Williamson, 1967, 1985). It manifests itself in fraud, waste, and abuse. Many observers claim that, where defense acquisition and contracting are concerned, it is endemic (Spiller, 2009, p. 49). Moreover, because social relationships, characterized by ambiguity and asymmetric information, are its native habitat, some observers add that opportunistic behavior is especially likely where source selection is concerned (Jansen, Hocevar, Rendon, & Fann, 2009).1 The source- selection process comprehends evaluating bids and proposals, selecting providers, negotiating contract terms and conditions, and awarding contracts.

Nevertheless, some of those who have looked carefully at the source-selection process deny that, as a practical matter, opportunism is a serious problem… The efficacy of bid protests is central to this assessment. This mechanism relies on interested third parties to ensure that acquisition officials follow the rules that govern source selection. Nevertheless, while protesting is cheap and easy, protests are rare and successful protests even rarer. About two percent of all protestable source- selection decisions are protested and, where the General Accountability Office hears protests, only five percent succeed (Gansler & Lucyshyn, 2009). This implies an error rate of about one in a thousand, which is pretty good by almost any standard.

As good as these results are, if the aim is dramatically improved performance of the acquisition function, they are arguably not good enough. While existing institutional arrangements work to lessen the manifestations of opportunistic behavior in government contracting, they leave the participants in the source-selection process constantly on the look out for opportunism from their would-be collaborators and partners. This is very costly. Its costs are reflected in defensive effort, risk aversion, lack of initiative and imagination, and failed partnerships (Thompson, 1993; Teisman & Klijn, 2002). These consequences go well beyond the effects of fraud and abuse and are themselves among the chief causes of waste in defense acquisition and contracting.

How do we get from where we are — a source-selection process dominated by habits of secrecy, autarky, and opportunism — to one based on collaboration, learning, and shared problem solving (Franck, Lewis, & Udis, 2008; Kapstein & Oudot, 2009; Elliott & Johnson, 2011)? The answer to this question lies in building and sustaining presumptive trust among the government-business participants in the source-selection process.

That was from “DISPELLING FEAR AND LOATHING IN GOVERNMENT ACQUISITION: A PROPOSAL FOR CULTIVATIONAL GOVERNANCE IN DOD SOURCE SELECTIONS.” Maser, Steve M; Thompson, Fred. Journal of Public Procurement; Boca Raton Vol. 13, Iss. 3, (Fall 2013): 289-314.

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