Contractor's Development of Complex It-systems: An Analysis of the Flexibility and Autonomy of Contracting Authorities in the Procurement Regulation

Abstract

The purpose of this thesis is to investigate the challenges facing a contracting authority when entering into a complex agreement about development of an it-system. During recent years, several failed it-contracts have come to light. This thesis investigates whether the public procurement regulation can be seen as an explanation to the challenges facing a public authority. The thesis carries out a legal analysis of the limitations considering the public procurement regulation. The thesis concludes that a high level of flexibility and autonomy is necessary. The thesis analyzes the connection between KO2 and competitive dialogue and the effect on the delivery description. Furthermore, the thesis investigates the challenges when adapting during the lifespan of the contract. The thesis concludes that the public procurement regulation limits the authority in adapting to change of preferences and needs which could lead to unsuccessful development of complex it-systems. Furthermore, the thesis analysis the efficiency of using proactive contracting as an alternative contracting form. The thesis analyses whether it is possible to identify the vendor and create relationship rent. Furthermore, the thesis investigates if it is possible for the public authority to cooperate with the vendor about a gain provision. The thesis find that it is efficient for the public authority to enter strategic contracting based on a need for relation specific investment, knowledge sharing and being able to safeguard the investments. Furthermore, the thesis find that it is possible for the public authority and vendor to cooperate about a gain provision and more relational contracts. The thesis combines the legal and economic analysis to create an integrated perspective. The analysis is based on the transactions cost theory which is used to explain whether it is possible for the parties to enter a transaction cost minimizing contract. The theory is expanded to include to terms, autonomy and competence, in order to describe the performance of public authorities. The thesis concludes that the public procurement regulation limits the contracting authority’s autonomy and flexibility, and that more flexibility would create more efficiency. Therefore, the thesis proposes an amendment to the public procurement regulation.