Concept and prototype of a web tool for public–private project contracting based on a system dynamics model

Bo Hu (), Armin Leopold () and Stefan Pickl ()

Central European Journal of Operations Research, 2015, vol. 23, issue 2, 407-419

Abstract: Contracting has a significant impact on the efficiency of acquisition processes, especially in the context of so-called public–private partnership (PPP) projects. Improperly drafted contracts may cause significant time and cost overruns in project execution due to opportunistic behaviour of private-sector suppliers. The main objective of our paper is to give a better understanding of opportunistic behaviour in PPP projects. The focus is on analysing the effects of delay penalties on the duration of such projects. We developed a system dynamics model, which depicts the complex relationship between the different aspects of a PPP project. In combination with this model, we present a web tool for conducting web-based experiments, which offers the possibility to track the decisions made by the private-sector suppliers during the progress of a simulated project. Using this web tool our experimental pilot study shows that carefully designed contracts help to keep the projects on schedule and bring benefits to both governmental entities and the private-sector suppliers. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: System dynamics modelling; Public–private partnership (PPP); Web tool; Project contracting (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10100-014-0378-z

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