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

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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.

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Authors and Affiliations

  1. Universität der Bundeswehr München, 85577, Neubiberg, Germany

    Bo Hu, Armin Leopold & Stefan Pickl

Authors
  1. Bo Hu
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  2. Armin Leopold
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  3. Stefan Pickl
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Correspondence to Armin Leopold.

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Hu, B., Leopold, A. & Pickl, S. Concept and prototype of a web tool for public–private project contracting based on a system dynamics model. Cent Eur J Oper Res 23, 407–419 (2015). https://doi.org/10.1007/s10100-014-0378-z

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  • DOI: https://doi.org/10.1007/s10100-014-0378-z

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