Accountability and discretion in the age of contracting: When and why do public managers implement sanctions for unsatisfactory contract performance?

During the last thirty years, one of the most consequential developments in the field of public administration --- contracting --- has proliferated throughout government. Regardless of the type of public program, governments have increased their reliance on private and nonprofit agents to deliver goods and services to citizens. As a result, contracting and other market-based strategies have replaced traditional bureaucratic models of public service delivery. Yet there is a dearth of scholarly research on the critical decisions made by public managers throughout the contract implementation process --- decisions that can have a profound impact on the quality of services delivered to citizens and on the accountability of contractors to the public interest. This research addresses the accountability dynamics in government contracting, specifically in the decisions public managers make to determine whether, how much, and under what circumstances they sanction contractors for poor performance. This is one of the first studies to address contract sanctions in the context of implementation and not simply in terms of contract design and specification. Contracting can pose significant challenges to democratic control (Cohen & Eimicke, 2008; Johnston & Romzek, 1999; Nlilward, 19%), particularly when results are emphasized at the expense of democratic process (Chan & Rosenbloom, 2010; Durant, 1999). Public accountability is also compromised when inefficiencies, corruption, and vendor opportunism result from government contracts (Cohen & Eimicke, 2008). In light of these challenges to the value of contracts, understanding the use of contract sanctions - and the determinants of their application - can elucidate both the decision-making process and as importantly, the influence of this action on service quality and public accountability. Public managers have powerful tools available, especially in the form of sanctions, but the results of this study indicate that other factors prohibit their execution - namely the burdensome nature of the sanctioning process, the amount of discretion managers use, and the extent to which the organization is dependent on the poor performing contractor. This research contributes to an understanding of these impediments and how they compromise accountability by offering a new appreciation of the complexities of maintaining accountability in third party governance.