Contracting Officer Workload and Contractual Terms

Abstract: The last decade for the U.S. federal government has been one of exceptional growth in the level of acquisitions contracting, but relatively limited growth in acquisitions manpower. Acquisitions offices must now act in a situation of relatively high workload, as individual contracting officer are necessarily spread much thinner. The economic consequences of this state of affairs are not well understood. This paper endeavors to provide that information by building a model of the contracting process and using this model to analyze a panel of contracts. The model predicts that increasing workload leads to less use of fixed-price contracts, lower utilization of full-and-open competition, more ex-post modifications, and higher prices. The empirical estimates from both FE-OLS and 2SLS are broadly consistent with these predictions.