The Impact of Relational Factors on Contracting Management in Public Organizations

Abstract

This study examines how public managers perceive the value of contractors who hire former agency employees. We find that contractors strategically hire former agency employees to ensure the accomplishment of contract work, potential renewal, and extension of the current project. Although it is unclear whether agency managers prefer contractors who are the agency’s former employees to contractors who have no prior connection with the agency, it is clear that they tend to hire contractors who are more familiar with the agency rules, policies, and inside practices rather than those who are not. However, frequency of interaction with current contractors and contract management experience in the private sector do not have any significant effect on the favorable perception of the agency managers toward increasing contracting out. The findings have important implications for human resource managers, particularly when agencies expand and diversify sources of human resources to increase the overall capacity of agencies.