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When Australian defence procurement goes wrong: Improving outcomes in a troubled contractual environment

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Listed:
  • Jenny Stewart
  • Tony Ablong

Abstract

Defence procurement is a notoriously difficult and often controversial field of public management. In Australia, problems with schedule and budget overruns have been addressed through business process reforms aimed at tightening control and improving professionalism. However, studies of complex contracting in other contexts show the importance of relational factors of trust, collaboration and risk-sharing. These factors are not encouraged by the predominantly transactionally based contractual environment of Defence. Based on a detailed examination of three case studies, we suggest that there is a disjunct between the types of controls that are applied by Defence and the requirements of delivering complex, long-term projects involving multiple stakeholders. The need for both improved flexibility as well as heightened accountability is evident. We argue that balancing these values involves processes that encourage, rather than discourage, communication, risk-sharing and trust.

Suggested Citation

  • Jenny Stewart & Tony Ablong, 2013. "When Australian defence procurement goes wrong: Improving outcomes in a troubled contractual environment," The Economic and Labour Relations Review, , vol. 24(2), pages 238-254, June.
    • Handle: RePEc:sae:ecolab:v:24:y:2013:i:2:p:238-254
    DOI: 10.1177/1035304613482653
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    References listed on IDEAS

    as
    1. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    2. Chris Aulich & Janine O'Flynn, 2007. "From Public to Private: The Australian Experience of Privatisation," Asia Pacific Journal of Public Administration, Taylor & Francis Journals, vol. 29(2), pages 153-171, December.
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    Cited by:

    1. Ismail bin Yusof & Abd Rahman Abdul Rahim, 2017. "Aircraft Acquisition Conceptual Framework," Asian Social Science, Canadian Center of Science and Education, vol. 13(4), pages 1-37, April.

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    More about this item

    Keywords

    Australia; contracts; contractualism; defence; flexibility; procurement; public–private partnerships; trust;
    All these keywords.

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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