System Dynamics and Management Science Approaches Toward Increasing Acquisition Process Efficiency

Abstract

Contracting has a significant impact on the acquisition process efficiency, especially in the context of so-called public-private partnership (PPP). Improper contracts may cause significant delay and additional costs in project execution due to opportunistic behavior of private-sector suppliers. We present a system dynamics model combined with a web based management cockpit for project contracting and interactive decision support which can be used to train project purchasers showing that carefully designed contracts help to keep the project on schedule and bring benefits to both the governmental entities and the privatesector suppliers.