Public Procurement and the Public-Private Value Conflict - A research model creating study

Abstract: Through public procurement, public services are oftentimes supplied by firms from the private sector. Theory states that public and private firms stand on conflicting value foundations following differences in ownership, funding and control. The public ethos is typically based on social values and the private ethos is increasingly economic. This entails that public services are through public procurement oftentimes supplied by private firms standing on a conflicting value foundation. This means that the decision-making employees of the private firm able to directly influence the supply of the public service (hands-on employees) may aspire to adhere to comparatively economical decisions in instances when the public organization considers increasingly social decisions to be preferred. The purpose of this study is to develop a research model towards the exploration of this problematic phenomenon in any case involving public procurement. A case study from the Swedish public transport market is used to the end of testing, developing and exemplifying this model. The contract documents are used to identify the values considered as important to the contracting authority and these are operationalized as the public value foundation. Vignettes are constructed and the hands-on employees of the private traffic carrier are interviewed regarding the decisions that they would make following these scenarios. Results herein indicate that a value conflict may be identified as decisions are at times identified as falling under the theoretically private value conflict when a public value adherence is preferred. Such a result highlights the need for the research model herein developed. The final model recommends the use of multiple organizations, both private and public, holding a contract with the contracting authority, to identify the existence of the value conflict as well as consider aspects that may be considered non-sectoral. The aim of this model is for it to be used to explore the public-private value conflict in the decisions of hands-on employees in any organization supplying a public service as the result of public procurement.