Balancing the contract : the relation between contracting capacity and contract accountability

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BALANCING THE CONTRA CT

THE RELA TION B ETWEEN CON TRA CTING CAPA CITY AND CON TRA CT A CCO UNT AB ILITY

23-6-2017

Master thesis Urban and Regional Planning

Private sector involvement in urban development

Student: Floris Taphoorn

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COLOPHON

This thesis was made at the University of Amsterdam Faculty of Social and Behavioural Sciences

STUDY:

Master Urban and Regional Planning University of Amsterdam

Graduate School of Social Sciences

Department of Human Geography, Planning and International Development Studies Nieuwe Achtergracht 166

1018 WV Amsterdam COURSE:

Course: Master Thesis Urban and Regional Planning

Thesis project: Private Sector Involvement in Urban Development Course Catalogue Number: 736410200Y

Supervisor: dr. M.H.H. (Martijn) van den Hurk Email: M.H.H.vandenHurk@uva.nl

STUDENT:

Name: F.A.J. (Floris) Taphoorn Student number: 10209379 Email: faj.taphoorn@online.nl Telephone: 06-55856619 Date of submission: 23-06-2017

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PREFACE

In front of you lies my master thesis, which focuses on the relation between contracting capacity and contract accountability. A deep dive has been made in a subject that has been relatively unexposed. This research was an inspiring process for me in which I met interesting people, heard interesting opinions and made interesting observations. I am grateful that you, as a reader, are willing to spend time on reading this thesis.

During the masters course I got inspired by the several lectures given on the topic of private sector involvement in urban development. This truly complex field were different actors come together motivated me to pursue a research on this topic.

Furthermore, I believe that in this field, an important aspect of the future of the field of urban planning is engrained. For this reason, to conduct a research in a time when this practice is still in its relative infancy, is really interesting.

I would like to thank all the respondents who provided me with valuable information. Without this information, this research would not have been possible. Also, I would like to thank my fellow students and friends, with whom I had many interesting debates and who provided me with good feedback. Last, but certainly not least, I would like to

express my deepest gratitude to my thesis supervisor, Martijn van den Hurk. You

supported me with valuable advice and kept me sharp at the right moment. You steered me in the right direction when needed. And above all, you were a great sparring partner when problems arose.

Thank you all so much!

I wish you a great time reading this thesis. I sincerely hope the findings motivate you to dig deeper in this truly interesting topic. For now, just like one of the main patterns that is found in this thesis, I trust in my counterpart, in this case the reader, to get inspired by the findings of this thesis.

Floris Taphoorn 21-06-2017

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ABSTRACT

More and more services that used to be serviced by the government are outsourced to private parties. In the built environment, this practice is often seen through the use of contracts in public-private partnerships (PPPs). If the performance of a private actor is insufficient according to the pre-set terms in the contract, then the private party must be held accountable. This is often done by sanctioning. In the literature on contract accountability, several factors are identified that influence the level of sanctioning. However, there has been surprisingly little scientific interest on the contracting capacity a government has, in relation to the level of sanctioning. The focus of this research will be on this particular subject. The expectation is that the variation of contracting

capacity of government will also cause variation in the level of sanctioning. This relation will be investigated in three different sizes of government in The Netherlands, by

looking at various design-build-(finance)-maintain (DB(F)M) projects.

Drawing from a comparative case study, this research indeed shows that the different cases also show different levels of contracting capacity and contract accountability. However, no direct and explicit relationship between contracting capacity and accountability was found. Nevertheless, this research shows that these concepts are linked together through six different patterns: trust, open relationship, future tender as stimulus, frustration in the process, comparison with other contractors and the spirit vs. the letter of the contract. However, there is not a single or uniform way these patterns are influenced by contracting capacity and how they in turn influence contract

accountability. This means that the mentioned relationship is tricky to grope and can go in different ways.

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1. INTRODUCTION

1.1. PUBLIC-PRIVATE PARTNERSHIPS AS NEW WAY OF WORKING In current western neo-liberal societies, the public interest is more than ever, dealt with by the private sector (Raco, 2013; Roy, 2015). This pattern has evolved in several fields of the built environment, and is now also present in some cases for the realization of civil engineering works. This often exists through the use of public-private partnerships (PPPs).

The classical way of planning has changed from a system where the public sector is the driving force behind urban development to a system whereby private-sector property development is the most important factor in urban development and urban

regeneration (Turok, 1992). This change in systems also has an effect on the way real-estate and the environment is developed. In the system where the private sector takes the lead in the development and act according to pre-defined set of requirements stated by public authorities (Gijzen, 2009; Heurkens, 2012), the use of contracts has become more and more a customary phenomenon, as Raco (2013) calls it contractualization. While, this change in system mainly happened in the UK and the USA, some changes also occurred in The Netherlands (Heurkens & Hobma, 2014). This pattern is not only in the field of property-led urban development, but is also present in other fields where contracting happens for goods that used to be provided by the public sector, such as for example the provision of electricity and the management of waste, which is called third-party governance (Salamon, 1981). This third-third-party governance is often expressed through PPPs whereby the vision is that private parties can provide certain goods in a more innovative and efficient way than the public sector can.

1.2. PROBLEM STATEMENT

PPPs are practiced worldwide since the Roman Empire (Forrer et al, 2010). However, as stated above, in recent years, more and more tasks of the government are transferred to the private sector (Raco, 2013; Roy, 2015). For this reason it is ever more important to have a clear sight on the services that the private sector is providing for the public. For the provision of tasks or goods for the public, it is important that the performance of these tasks or goods is sufficient. Thus, when private contractors provide these things, they need to be held accountable for the provision of their goods and services, especially when there is unsatisfactory performance. Using contracts to make one accountable for their actions is often called contract accountability (Girth, 2016). While the use of PPPs in The Netherlands is relatively new, it becomes more common (Heurkens & Hobma,

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create a base for evaluating contract accountability (Yang et al., 2009). If the results show that there is a relation between contracting capacity and contract accountability, then there is a potential loss of public interest caused by the Dutch government who is relatively new to this respective field. This public interest can be seen as financial or social, and the monitoring on contract accountability can have an influence on overall contract performance (Girth, 2014). Kettl (2002), also underlined this aspect, who states that “government’s performance is only as good as its ability to manage its tools and to hold its tool users accountable” (2002, 491). This is especially the case when there is an imbalance of power in the relationships in PPPs (Friend, 2006). There is also a knowledge imbalance in the use of contracts in PPPs between the public and the private sector (Ni, 2012). This imbalance causes an ‘information asymmetry’, which in the end can create a negative or weak position for the public sector in PPPs (Garvin, 2010: 403). The private sector can use the information asymmetry to divert contract accountability to other partners in the contract or even avoid contract accountability entirely. Thus, the public cause is directly at stake, because these aspects can also affect the financial position of the government, and in turn maybe the taxpayer. This is also relevant in a neo-liberal system where there is a stronger emphasis on an entrepreneurial

governance which is focused on money (Taşan-Kok, 2010).

The focus in the literature on PPPs has primarily been on the statement that contracting capacity is an important feature for a government to possess (Brown and Potoski 2003). The same is the case for contract accountability (Forrer et al., 2010; Sclar, 2000).

However, how contract accountability is influenced by contracting capacity is still unknown. As stated earlier, Girth (2014), has identified several factors that influence contract accountability and the level of sanctioning, which is an important aspect of contract accountability. In her research, Girth tested for experience in number of years, but not on the concept of contracting capacity (ibid). The expectation is that contracting capacity is also a factor that influences contract accountability, thereby adding this factor to the existing research and knowledge on this particular subject. Thus, in essence this research will fill an important and relevant knowledge gap.

1.3. RESEARCH QUESTION

The problem statement has described the potential relationship between contracting capacity and contract accountability and why this is important. These two concepts lead to the following formulation of the research question:

How does contracting capacity of the public sector in PPPs influence contract accountability?

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This research question is formulated as an exploratory question, because there is not much knowledge on this relation and because the nature of the relation is not

completely clear yet.

The abovementioned research question is divided into the following seven sub-questions:

1. What is contracting capacity? 2. What is accountability?

3. What is the assumed relationship between contracting capacity and accountability?

4. To what extent does accountability occur in The Netherlands? 5. What is the contracting capacity in The Netherlands?

6. What are the patterns between contracting capacity and accountability? 7. What is the explanation for these patterns?

The above stated sub questions can be divided into theoretical and empirical questions. The first three questions are answered theoretically, while the other questions are answered through the use of desk research and interviews, as is explained later on.

1.4. READING GUIDE

The thesis will continue with chapter 2, were relevant theories are discussed in the theoretical framework. This theoretical framework will focus on theories and discussion in the field that are relevant to this research. Chapter 3 will focus on the conceptual framework, were a deeper dive is made specifically into the two concepts. Here, the two main concepts are discussed, and also how they will be used.

Furthermore, sub questions one to three will be discussed here. After this, the methods that are relevant for this research will be explained in chapter 4: methodology. Chapter 5 will give a general description of the three different cases and five different projects that are selected. Next, the accountability and the contracting capacity of the selected cases will be analyzed in chapter 6 and 7. Respectively, sub questions five and six will be discussed here. This allows a structured analysis of both the concepts per case. After this, the observations made in chapter 6 and 7 will converge into six different patterns that are identified in chapter 8. These general patterns are applicable to the different cases. This chapter will also answer sub questions six and seven. Finally, in chapter 9, the conclusion to the research question is formulated.

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2. THEORETICAL FRAMEWORK

2.1. DEFINITION OF PPP

PPPs come in all sorts and sizes, and there is no single definition on the subject. Van Ham and Koppenjan (2001) use for example a definition that focusses on the

institutional side of PPPs: “cooperation of some sort of durability between public and private actors in which they jointly develop products and services and share risks, costs, and resources which are connected with these products” (Van Ham & Koppenjan, 2001: 598).

However, for this research the more complete composite definition of Hodge and Greve (2007) is used: “By definition, PPPs are collaborative partnerships that are long-term in nature (often extending beyond 30–40 years), involve both public and private financing, require private sector involvement in the provision of government services, transfer risks from public to private organizations, and outline roles and responsibilities of involved organizations through complex contracts” (Hodge and Greve, 2007; Boyer & Newcomer, 2015: 131). This definition is useful for this research because the role of complex contracts in which the responsibilities are formulated, is included.

2.2. THE RELEVANCE OF CONTRACTS

As stated in the introduction, more services are outsourced through the use of PPPs (Bovaird, 2004; Raco, 2013; Roy, 2015). A separation is defined between PPP concessions or contracts and PPP as an organizational cooperation project or

partnership (Hodge & Greve, 2005; Kenniscentrum, 2002; Klijn & Teisman, 2000; Klijn et al., 2007; Sullivan & Skelcher, 2002; Teisman, 1998). For the latter, as opposed to the first, contracts are not used as a form of organization (Klijn et al., 2007).

However, contracts are used to structure the relationship within these PPP concessions and especially between the public and the private sector (Van der Veen & Korthals Altes, 2011). Contracts are considered as an important aspect in PPPs because it defines the relationship between the contractor and the contracting party (Koppenjan, 2008). In particular, who is responsible for what aspects of a project, is defined in these contract (Schepker et al., 2014). Besides these reasons for the use of contracts, a contract can also be used as a measure for securing the pre-defined terms and thereby limiting the transaction costs or preventing opportunistic behavior of the contractor by limiting the ability of the private contractor to act freely (Williamson, 1996).

There is a variation in the type of contract, which can differ in type and style, through the influence of the goal of the contract. The role the contract needs to serve, “decides” which type of contract can best be used. In the case of The Netherlands,

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design-build-finance-maintain-operate contracts, or DBFM(O) contracts, are by far the most used type of contract in PPPs (Hebly & Klijn, 2016). This type of contract is seen as a form to create ‘value-for-money’ in government expenses (Minister van Financiën, 2016). An important aspect in choosing the way a contractual agreement is set up, is based on transaction costs. Transaction costs are the costs to organize the development of the project, which can also be called coordination costs (Douma & Schreuder, 2002). The costs for organization of the development of the project are for example legal costs for setting up the contract. The level of transaction costs determines the organization of the project and the form of contract (Williamson, 1985). Trust between the contractual partners can have influence on the level of the transaction costs, because heavy contracts are not needed if the partners trust each other (Adler, 2001). Focus on

cooperation instead of on complex contracts can reduce the transaction costs according to Transaction Cost Economics (Williamson, 1985). However, some scholars state that a formal contract can stimulate a cooperative and long lasting relationship based on trust (Poppo & Zenger, 2002). To whatever extent trust is present; contracts remain an important aspect in PPPs.

2.3. ACCOUNTABILITY

2.3.1. WHAT IS ACCOUNTABILITY?

The notion of accountability has been around since at least medieval times, but there is not a single definition on this concept due to the different angles every field of study takes on the subject (Bovens et al., 2014). One important aspect of accountability is described by Jenkins (2007): “Central to all definitions of accountability is the idea that one person or institution is obliged to give an account of his, her, or its activities to another” (Jenkins, 2007: 136). This is often about relationships that end at the citizens for whom the government is accountable (Jenkins, 2007).

Accountability can be divided into two different types of usage: accountability as a virtue and accountability as a mechanism (Bovens et al., 2014). The latter is of relevance for this research, because it focuses on institutional relationships in which an agent can be held accountable by another agent and thereby issuing sanctions for not meeting the pre-determined targets (ibid). These targets are often performance measures which need to be measured by the managing agent.

To support this, transparency is a central concept in accountability and also important in creating accountability (Peters, 2007). One of the ways to create transparency is to measure performance (ibid). Performance measurements are often based on short-term aspects, while results and effects may only come about in the long short-term.

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systems, because it avoids the exceptional aspects, but rather focusses on the average performance, which in the end makes the accountability more accurate.

2.3.2. THE NEED FOR ACCOUNTABILITY

To find out who is accountable to whom, for what, by which standards, and why (Bovens et al., 2014; 11) is relevant because there is an increasing complexity in

governance, which is also the case for PPPs (Bovens et al., 2014). Furthermore, in third-party governance, contracts are used to make clear who is accountable for the result, which is in essence not always clear (Girth, 2014). Contracting is used to stimulate the accountability mechanism between the contractor and the public sector (Allen et al., 2016). Thus, contract accountability is an important aspect in the use of contracts in PPPs (Klijn & Koppenjan, 2016).

However, contracts by itself do not create accountability and good performance; the indicators in these contracts that allow the measurement of performance are also relevant (Allen et al., 2016). A combination of several mechanisms, such as the presence of a hierarchical structure, is needed besides the use of contracts in order to create accountability (ibid).

To be able to provide good governance for public service delivery, ‘good stewardship’ of public money is needed (CIPFA, 2005). This is especially relevant in PPPs, because public accountability is transferred from the public sector to the private sector in these contractual agreements (Shaoul et al., 2012). To achieve this, a stream of information between the public and private sector needs to be developed (ibid).

It is stated that PPPs are used to create value for money due to better efficiency in the private sector or PPPs are used for budgetary constraints in the public sector (Acerete et al., 2009). However, this is not always the case, as costs for financing are higher when it is dealt with by the private sector, compared to the public sector (Acerete et al., 2009; Shaoul et al., 2008). Also the transfer of risks from the public to the private sector, which is often named as a beneficiary of PPPs, is not always the case (Acerete et al., 2009).

2.3.3. DIFFERENT TYPES OF ACCOUNTABILITY

Accountability is a term that may have different variation and can be practically implemented in different ways. Bovens (2006) divides the different types of accountability in four different dimensions:

 Accountability based on the nature of the forum  Accountability based on the nature of the actor

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 Accountability based on the nature of the conduct  Accountability based on the nature of the obligation

Thus, these dimensions are based upon a specific view on the relationship between the forum (e.g. the government who is the principal in the agreement), the actor (e.g. the contractor), the conduct (e.g. financial), and the obligation (e.g. the division of power). There is no ordinal division or right and wrong division in this, but it just differs on the “approach” to the subject (Bovens, 2006). In these dimensions, several types of

accountability can be identified, which are amongst others: political accountability, legal accountability, hierarchical accountability, diagonal accountability and so forth. These types can overlap in through the different dimensions (ibid).

Legal accountability focusses on performance indicators, which are stated in the contract. The type of accountability that is used in this research is legal accountability, because the scope of this research is on PPPs, which are as stated earlier, in essence contractual agreements. Furthermore, the aspect of performance in legal accountability fits in well with record keeping, which is an intrinsic part of accountability (Bovens et al., 2014). Legal accountability also has aspects of vertical accountability in it, which means that the principal can express power over the contractor, which is present in certain types of PPPs, such as DBMOs, which is discussed later. However, Shaoul et al. (2012) claim that horizontal accountability, or an equal relationship, is a better solution for creating true public accountability (Shaoul et al., 2012).

2.4. INTEGRATED CONTRACTS

As stated before, different types of contracts can be applicable for different types of projects. For this research so-called integrated contracts are of interest. Integrated contracts are contracts where several stages of the lifecycle of a project are integrated into one contract, and therefore one tender (Lenferink et al., 2013).

In Dutch cases, integrated contracts can be roughly divided into four types of contracts: design construct (DC), engineering construct (EC), design build maintain (DBM) and design build finance maintain operate (DBFMO) (PIANOO, 2012). The most integrated form of PPP is DBFMO, which is described hereafter.

2.4.1. WHAT IS DBFMO?

For this research, design-build-finance-maintain-operate (DBFMO) contracts are relevant as contract type and can be seen as an equivalent to the Private Finance Initiative (PFI), which takes place in the U.K. (Klijn et al., 2007). DBFMO contracts are contract where the earlier-mentioned stages of contracting are all done by one

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not only delivering a product, but also on delivering a service for maintaining and operating that product (Minister van Financiën, 2016). However, in Dutch cases, the operation phase -through for example tolling on roads- is often not done by the private party, but remains the responsibility of the public sector (Lenferink, 2013). Here DBFMO and DBFM contracts are considered equal (ibid).

The procurement process is often done through so-called ‘best value procurement’ (BVP), which not only focuses on the best price, but also on technical criteria (Shane et al., 2006). These contracts often have a long concession period of over 15 years

(Koppenjan, 2015), and are dependent on private financiers (Klijn, 2010). Due to this long period of operation, a flexible contract is needed to be able to cope with changing conditions and external factors. This makes it easier to make adjustments and

coordinate the situation better (Parmigiani & Rivera-Santos, 2011). The payment of the private contractor is spread out over the entire contract period (Raco, 2013), and based on certain performance indicators (Lenferink, 2013). Financiers are used to fund these projects through the use of prefinance constructions (Hebly & Klijn, 2016).

The use of a DBFMO type of contract is often relevant for projects of over €25 million for buildings and €60 million for infrastructure (Minister van Financiën, 2016). The reason for this is that DBFMO-contracts can have high transaction costs. However, there are also advocates that state that such types of contracts can also be used in smaller sized projects (Klijn, 2010; Coerver, 2016). This is often called PPP-light or DBFM-light. For DBFM contracts to be feasible in smaller projects, the transaction costs need to be low and the process for the private contractors to apply on the procurement needs to be easy (Coerver, 2016). DBFM-light contract is a form of contract where there is a lighter version of cooperation and where the role of private financiers is smaller (Klijn, 2010). This causes an easier and simpler procurement process (ibid).

2.4.2. DBM OR D&C

DBM contracts are contracts that often have a long maintenance period as well. In this type of contract, the private party is paid by the public sector after they have complied with several criteria, and thereby minimizing prefinancing, as is common in DBFMO (PIANOO, 2012). In this light, DBM contracts can be seen as a form of DBFM-light, because the finance aspect is not part of the contract. For integrated DBM projects, UAV-GC contracts are often used as a guideline for the process. These are standardized contracts who describe the role of both the public and the private sector. DBM contracts are also known as D&C contracts, which stands for design and construct. These two types of contracts are considered equal, with the only difference that D&C contracts do not necessarily have the maintenance factor included.

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For this research, projects are selected that have a long maintenance factor integrated in the contract. Therefore, only DBM and DBFMO contracts are applicable in this situation.

2.4.3. ADVANTAGES OF DBFMO

Several advantages of these types of contracts are considered. Because the payments for a project are transferred over time, the DBFMO contract creates a new funding stream for the current government (Raco, 2013). Another advantage is that the risk is

transferred from the public sector to private sector (Wong et al., 2015). This is not only the case for financial risks, but also for risks concerned with the application of the right to build and soil pollution (ibid). Research done in The Netherlands has shown that DBFMO contracts can have a positive effect on the transparency and the quality of the process and the project (Reynaers, 2014). Also the responsibility of the private

contractor has been experienced in a positive way (ibid).

Furthermore, arguments on improvement of efficiency and quality through the expertise and capacity of the private sector are often mentioned (Klijn & Van Twist, 2007; Klijn et al., 2008; Kwak et al., 2009; Algemene Rekenkamer, 2013). This efficiency is also reached due to the ability of the private sector to use sustainable materials to save on future building costs (Haynes & Roden, 1999). It can also create the opportunity to create a smaller government which can create an effect of “unburdening” (Algemene Rekenkamer, 2013).

2.4.4. DISADVANTAGES OF DBFMO

According to Raco (2013), the political power of the government and the public power of the citizens is lost in such contract. As stated earlier, while contracts need to be flexible, this is not always the case (Raco, 2013). This creates the situation whereby new demands of the public sector are ignored (ibid). Thus, this can be seen as the question of safeguarding public values (Bevir, 2010; Reynaers, 2014). Furthermore, due to the fact that the private sector often charges more than the public sector does, it can present a bad value for money price (Edwards, 2009; Raco, 2013; Spackman, 2002). There is also the risk that the private sector will focus too much on their own profit and thereby diminishing the quality of the project (Savas, 2000; Brown et al., 2006).

Whilst the DBFMO model is popular in The Netherlands as a form of PPP, this model might not be the best way to achieve satisfactory performance (Verweij et al., 2017).

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2.5. SANCTIONING

2.5.1. WHAT IS SANCTIONING?

To hold a contractor accountable for their performance in projects, incentives are included in more and more contract (Heinrich, 2007; Girth, 2014). There are different ways in which incentives on performance can be given in contract accountability (Girth, 2014). Two types of contract incentives exist:

• Positive incentives, or rewards, for satisfactory performance • Negative incentives, or sanctions, for unsatisfactory performance

Especially the negative incentives are interesting to study how public authorities deal with unsatisfactory behavior. Furthermore, sanctions are used as a threat in order to ensure accountability (Girth, 2014). However, sanctions do not only need to be

formulated in the contract, but these threats also need to be enforced and executed for the incentive to be true (ibid). This enforcement on the performance of the private contractor can be done in several ways. In figure 1 below, different levels of sanctions can be seen, as developed by Girth (2014). The lower steps can be described as soft sanctioning and the higher steps can be described as hard sanctioning.

FIGURE 1: SANCTIONS FOR UNSATISFACTORY BEHAVIOR. ADOPTED FROM GIRTH, 2014.

According to Girth (2014), the choice of the contracting party (government) to use one of these sanctions and the level of sanctioning, depends on several factors: the

dependence of the contractor, the willingness to use discretion and the burdensome nature of the sanctioning process.

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Next to the different (negative) incentives that can be used to apply contract

accountability, there are also different types of contracting possible. The differentiation can be made between hard and soft contracting. Hard contracting is based on the use of extensive contractual agreements, by which certainty is achieved through juridical division of roles (Lusch & Brown, 1996). Soft contracting is based on mutual trust and this uses for example communication to deal with possible problems (Akerboom, 2016). The use of sanctions can be seen as a form of hard contracting because it uses juridical tools instead of reasoning. However, in the framework of Girth, the different levels of sanctioning differ in their character of hard or soft contracting. The bottom three aspects ‘take no action’, ‘address informally’ and ‘issue written warning’ can be seen as soft contracting, while the other three aspects can be seen as hard contracting.

2.5.2. SANCTIONING IN DBFMO CONTRACTS

In DBFM(O) contract, when a contract enters the operation or exploitation phase, the pre-defined set requirements needs to be monitored on their performance (Hebly &Klijn, 2016). This is done by contract managers (ibid). These contract managers manage the supplier and the contract, which causes the possibility for the goals to be met (Koning & Pijpers, 2007). Whenever, the performance of the project is insufficient, sanctioning can be applied.

The findings of Girth (2014) show that although the use of sanctions is described in contracts, public contractors do not always use these sanctions. According to Girth (2014), there are various reasons for this: the burdensome nature of the sanctioning process, the willingness to use discretion, and the extent to which the organization is dependent on the poor-performing contractor are seen as factors that explain the lack of implementation of sanctions (ibid). The above mentioned research focused on other variables as well, but for these variables, no significance found (ibid). How the research of Girth (2014) is intertwined in this research, is shown in the next section.

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3. CONCEPTUAL FRAMEWORK

3.1. CONCEPTUAL MODEL

The two main concepts of the research question: “How does contracting capacity of the public sector in PPPs influence contract accountability?” are contracting capacity and contract accountability. These concepts are graphically visualized in a conceptual model, as can be seen in figure 2.

FIGURE 2: CONCEPTUAL MODEL

This research will solely focus on the two main concepts, which are further described hereafter. The three theoretical factors, which are visualized in the green circle, are factors identified by Girth (2014), are not an intrinsic part of the research. Thus, these aspects will not be tested, but need to be kept in mind for analyzing the patterns. Furthermore, the expectation is that out of the different aspects that influence contract accountability, Girth (2014) ‘forgot’ one: namely contracting capacity. Thus, this

research sheds light on a new and poorly researched factor that might influence contract accountability.

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3.1.1. CONCEPT 1: CONTRACTING CAPACITY

There are several authors who underlined the importance of possessing contract capacity as a government in PPPs (Yang et al., 2009; Brown & Potoski, 2003; Forrer et al., 2014). All these authors analyze the concept of contracting capacity in a different way, as can be seen in table 1 below. The broad concept of contracting capacity is divided into a design phase and implementation phase.

TABLE 1: CONTRACTING CAPACITY IN PPPS. ADOPTED FROM BOYER & NEWCOMER, 2015.

Yang et al., 2009 Brown and Potoski, 2003

Forrer et al., 2014 Design  Agenda setting

 Formulation capacity  Bidding on a contract  Selecting a provider  Negotiating a contract  Creating management systems for contracting  Setting clear expectations  Assessment  Establishing criteria  Transparency in selection Operation  Implementation  Evaluation  Procedures for collecting performance information  Assisting employees to carry out evaluation  Monitoring  Evaluation

These aspects on contracting capacity focus mainly on two aspects: experience and the institutional structure. Boyer and Newcomer (2015), have analyzed this and stated that learning can improve the aspects that are listed in table 1. These authors make the differentiation between experiential learning, which means learning from own prior experience, and vicarious learning, which means learning from experiences in other organizations or departments.

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The institutional structure, as seen in figure 2, focuses primarily on a way of working and the way processes are run. A central factor in this is the labour force, because they essentially make up the intuitional structure and then “translate” it into daily practice in PPPs. The same is true for experience, which is also transferred through people.

The section above also provides an answer to the first sub question: What is contracting capacity? For this research, contracting capacity follows the work of Boyer and

Newcomer (2015), and sees this as the capacity needed for successful contracting. This work is used, because it is often used as the leading explanation in the field. Practically, in this conceptual model, contracting capacity is split up into several aspects:

institutional structure, labour force, experiential experience and vicarious experience. Contracting capacity is for example high when these aspects are considered high. How these aspect will be specifically measured, will be discussed in chapter 4.

3.1.2. CONCEPT 2: CONTRACT ACCOUNTABILITY

There are different aspects to contract accountability (Girth, 2014; Yang et al., 2009); however, for this research the focus will primarily be on the aspect of sanctioning, because of the direct effect this has on contract performance (Girth, 2014). This is also an answer to sub question two: What is accountability? Thus, for this research

accountability can be seen as sanctioning for insufficient performance. When sanctions are applied in numerous cases, accountability can be seen as high. The other way around, when sanctioning is not applied in situations when there is (a suspicion of) insufficient performance, accountability can be seen as low. As is seen in the previous section, sanctioning can happen in various forms and types, were the lowest step already starts at ‘address informally’ (Girth, 2014). The reason why a suspicion of insufficient performance is relevant, is because applying this lowest step of informal addressing (or not applying a sanction) may already influence accountability in such cases.

There are different factors that are proven to have influence on contract accountability, as is visualized in the green circle of the conceptual model. However, the expectation of this research is that the influence of contracting capacity in the public sector is

underexposed in current scientific research. Contract accountability is seen as a dependent variable and contracting capacity is seen as an independent variable.

3.2. HYPOTHESES

Following the conceptual model, two hypotheses are formulated. At this moment, it is unclear whether a negative or positive relation is applicable. For this reason, the hypotheses can be divided into two lines of thought as is seen in figure 3.

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FIGURE 3: LINE OF THOUGHTS

For the construction of the first line of thought (left), the following quote is used that is formulated by Hebly & Klijn (2016: 47-48):

“Long-term contracts in this changing environment require a strategy and a proactive approach with regard to existing projects. That is the only way to properly guarantee the added value of DBFM(O) in the long term. That is why ministries have professional contract managers who are able to check the market conformity to changes, and to continuously learn and improve on the basis of practical experience. The lessons learned are of course used to further improve future contracts and tendering.”

This quote shows that when there is more practical experience for the public sector in DBFM(O), this could create the possibility for learning from previous experience. In turn, this could create a better procurement process, in which for example the performance indicators are better formulated. Consequently, the private contractors can act in a better way to these performance indicators, which could lead to better performance and lower sanctioning. In short, a high contracting capacity may reduce the level of sanctioning. The other way around, a low level of contracting capacity might cause for an increase the level of sanctioning, which leads us to hypothesis one (H1):

Contracting capacity is

low

Public sector want

security / guarantees

on operation of

contract

Contract

accountability is high

Government is not

sure how to react to

unsatisfactory

behaviour

Contract

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If the contracting capacity is low, then the public sector will resort to hard contracting, which means that contract accountability is high.

The term hard contracting can mean different things (Akerboom, 2016). For this research, hard contracting is seen as implementing sanctions, instead of negotiating with the stakeholders. Hypothesis one can therefore be seen as the government focusing on the letter of the letter of the contract instead of the spirit of the contract. The second line of thought is based on the premise that an unexperienced government is not sure how to act when there is unsatisfactory performance, which can cause the government to place its trust in the private contractor, because these contractors are often more experienced through the different projects they work on across the country. In turn, this can result in low accountability, because too much trust in the private contractor may cause for agreeing to certain aspects the private contractor proposes in situation were the performance is low, while this might need to be handled by

sanctioning. This hypothesis is derived from literature (Brown et al., 2006), which states that the way public contract managers deal with issues on accountability differs by the way the institutions are formed. This means that formal and informal systems of monitoring and sanctioning contractors differ from each other. In this, contracting capacity is not explicitly stated, but these institutions can implicitly be seen as an aspect of contracting capacity (Boyer & Newcomer, 2015). An unexperienced government is a government with a bad functioning institutional structure. This leads to the formulation of hypothesis 2 (H2):

If the contracting capacity is low, then there is a low amount of sanctioning or a wrong type of incentive is used, which means that contract accountability is low. In this case, wrong type of incentive means an incentive that is not appropriate in a specific situation. For this, again the framework of Girth (2014) on incentives is used. This term, as well as the term low amount of sanctioning is of course relative to another (standard) situation, as is described in the next section.

As can be seen by comparing the two hypotheses, the expectation is that one is proven true and the other is proven wrong. These hypotheses are formulated from the starting point that contracting capacity is low, but following the conceptual model, these

relations can be formulated the other way around as well, meaning that a high contracting capacity as a starting point can be used as well. Following the above mentioned hypotheses, a graph is constructed with accountability on one axis and contracting capacity on the other axis. This graph can be seen in figure 4 below.

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As is seen in figure 4 above, the expectation of hypothesis one is that the projects will be situated at the bottom left, top right or somewhere in between, as is visualized by the dotted line. For hypothesis two, the opposite is expected : the projects will be situated on the top left, bottom right, or somewhere in between. In chapter 8, the different projects are projected in the same graph, to see which of the hypotheses is actually true.

The section above, also answers the third sub question: What is the assumed relationship between contracting capacity and accountability? In short, the expectation is that

contracting capacity will influence accountability. Specifically the expectation is that the contracting capacity can influence accountability in two different ways, as is shown by the two hypotheses.

H2 H1 H1 H2 Contracting capacity A cco unta bilit y (sancti ons g iven)

FIGURE 4: GRAPH WITH LEVEL OF ACCOUNTABILITY AND CONTRACTING CAPACITY

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4. METHODOLOGY

4.1. RESEARCH DESIGN

As is stated in the theoretical framework, several authors have focused their research on the relation between contracts and efficiency or performance (Klijn & Koppenjan, 2016; Shetterly, 2000), on sanctioning (Girth, 2014) and contracting capacity (Boyer & Newcomer, 2015). However, there is no knowledge on the specific relation between contracting capacity and contract accountability. This research can be seen as

potentially adding another factor that influences sanctioning in the framework that is described by Girth (2014).

Considering the fact that this research will add to the current knowledge on this particular subject and new theory will be developed, the character of this research is inductive (Bryman, 2008). The research strategy is a mixed method research. The quantitative aspects of this research are about collecting numerical data for certain measures. However, the analysis on these measures will be done in a qualitative way. Thus, while stated that the research strategy is mixed method, the most important aspects of the research can be characterized as qualitative.

This research has an epistemological orientation of interpretivism, which fits in with the qualitative nature of the research. This means that a difference is understood between the objects of natural sciences and people (Bryman, 2008). For the ontological

orientation, this research can be seen in the family of constructionism, which also fits in with the qualitative character. Here, social actors are not independent from rules, organizations, or values, but actually (re)make them (ibid; Hissink Muller, 2017). A case study is chosen as a research design (Bryman, 2008; Yin, 2009). A case study creates the opportunity to go in-depth on a particular subject (Bryman, 2008). It also fits in well with the explanatory nature of the research question, because this question is not about frequencies or incidences, but about operational links that need to explored (Yin, 2009). Case studies create the opportunity to get information on events through interviews with people involved in these events (ibid). Also, a strength of the case study design is that it enables the researches to handle different type of evidence, such as documents and interviews, which is useful in this particular research as will be shown in the operationalization.

For this research a comparative design is chosen, because it improves theory-building (Bryman, 2008). An important aspect on good reliability and validity in this type of research design is the choice of the right measures. Explicit focus need to be used in the operationalization of the indicators. Literature and face validity is used to create strong measures (Bryman, 2008). A coding scheme is used to create reliability. To be able to

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make a comparison, at least two cases need to be identified (ibid). For this, several techniques for case selection can be identified (Gerring, 2007). For this research, diverse case selection is used, which is a good method for hypothesis testing, as hypotheses are used in this research (Gerring, 2007).

4.2. CASE SELECTION CRITERIA

For the cases and the results to be representative for a larger population and to be valid, a good selection of cases is needed. In table 2 below, the selection criteria are listed that need to be applied for the selection of the cases.

TABLE 2: SELECTION CRITERIA

Nr. Selection criteria 1 Dutch cases

2 Public tender

3 Different levels of contracting capacity

4 DBFM(O) or DBM contracts

Criteria 1 is relevant for practical considerations, because due to connections within municipalities and project developers, it is easier to get access to data. Furthermore, this means that the analysis of relevant documents in Dutch is possible. Criteria 2 is needed for those documents to be (partly) public. In the case of The Netherlands it is often the case that for large municipalities who place tenders which are worth more than

€200.000, need to be public. This criteria also means that only projects that were procured from 2013 onwards can be selected, because from this moment, Dutch law required all tenders to be made public through the platform of Tenderned (Tenderned, 2016). Criteria 3 is needed to be able to test the hypotheses, as the expectation is that different levels of contracting capacity will result in differences in contract

accountability. Because testing of the contracting capacity is an intrinsic aspect of the research, only a quick selection needs to be made. Research done in the U.S. has shown that large municipalities have bigger contracting capacity than small municipalities (Brown & Potoski, 2003). For this reason, a differentiation is made between small, medium and large government bodies in The Netherlands, as the expectation is that the earlier mentioned effect shown by Brown & Potoski (2003) might also have an effect on

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measurements to make sure if there is actually a difference in contracting capacity needs to be done in the research, as is shown later. In criteria 4, design-build-finance-maintain-operate (DBFMO) or design-build-maintain (DBM) contracts are chosen as a type of contract. DBFMO contracts are contract where the earlier-mentioned stages of contracting are all done by one (consortium of) private actor(s) (Algemene

Rekenkamer, 2013). These contracts are chosen because of the fact that contract accountability is an issue here and sanctioning is a phenomenon that takes place in these contracts (ibid). In The Netherlands, these contracts are often provided through the form of bidding (Hebly & Klijn, 2016).

Thus, the units of analysis in this research are Dutch government bodies, which are in this case municipalities, provinces or national authorities. Three cases will be selected where there is a hypothetical difference on the level of contracting. This will lead to the preliminary selection of the following three cases:

 Rijkswaterstaat: this is the Dutch public works institution, which works on large infrastructure projects

 Large municipality of over 500.000 inhabitants  Smaller municipality of around 50.000 inhabitants

Per case, at least one or two projects will be analyzed in order to provide a good base of analysis and valid results. These contracts have to be in the phase of exploitation for the possibility of sanctioning to be able to happen.

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4.3. OPERATIONALIZATION

The operationalization of the concept contracting capacity can be seen in figure 5 below.

Concept Dimensions Indicators Measures

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The operationalization of the concept contract accountability can be seen in figure 6 below.

Concept Indicators Measures

FIGURE 6: OPERATIONALIZATION OF CONTRACT ACCOUNTABILITY

4.4. DATA COLLECTION METHODS

Because of the fact that contracting capacity is the independent variable, the main data collection needs to be on this sector. The needed data can be divided in qualitative data and quantitative data. The latter consists of the measures: number of contracts, size of contracts in euros and the number of contract managers. Data on the number of contracts per contracting agency and (approximate) sizes of contracts in euros can be collected from Tenderned, which is the Dutch agency that collects all tenders, or from government budgetary data.

For the qualitative data, the data collection method will focus primarily on semi-structured interviews with private sector contractors who are contracted by the government bodies, which are selected as cases. These contractors are questioned on their experiences with their public sector partners. Especially for the measure on institutional structure it is a process of ‘checking the box’. For the other measures it is more important to get to know the structure and relations between the concepts. Furthermore, the interviews are also used to check the earlier gathered quantitative data and to get information on the number of contract managers. This can potentially be an interesting aspect of the research, because it can shed light on the differences

between the actual situation and the perceived situation, which can also improve the validity of the results (Yin, 2009). Public contract managers are interviewed as well, and they are questioned on the same aspects as the private contractors. This creates the opportunity to compare the results of the public and private contract managers with each other, in order to show the debatable issues between the two parties. A full list of

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interviewees and interview questions is listed in respectively appendix A and appendix B.

For the data collection on contract accountability, the same semi-structured interviews will be used. One of the risks in this particular subject is that due to the sensitive

character of the matter, respondents are reluctant to disclose information on this subject. The goal of the interviews is to identify at least the level of sanctioning, for which the framework of Girth (2014) is used. Government documents on sanctioning are also used for the data collection. The expectation is that respondents are more reluctant to give information on the number of sanctions and the value of sanctions. This is also the case for the disclosure of the abovementioned documents. If this is in fact the case, the gathered data on contracting accountability will be perceptive data. The hypotheses can still partly be tested by a focus on the framework of Girth (2014), which in this case means that the research is still relevant. Also, the data will be checked by both parties, which can mitigate the perceptive character of the data.

If we take a look back at the hypotheses, it is important to clear out some aspects. As stated earlier, for hypothesis 2, the terms ‘wrong type of incentive’ and ‘low amount of sanctioning’ are of course relative to another (standard) situation. This means that a comparison needs to be made with for example a control group or control case

(Bryman, 2008). A control case is in general a representative case of which an exclusion is made on certain factors that need to be tested (ibid). However, for this respective field, it is hard to find a representative case, because of the diversity in contracting forms and underlying factors that influence this (Brown et al., 2006). This aspect will be obviated through comparing the three cases with one another. Thus, the outcomes of both variables are compared between different cases, which will create an ordinal difference between those cases.

In general, semi-structured interviews are a good way to get an in-depth understanding of a phenomenon where not much theoretical knowledge is available, as it is the case in this situation (Bryman, 2008).

4.5. METHODS OF ANALYSIS

For the analysis of the data gathered through semi-structured interviews, different methods of analysis can be used. For this research, cross-case synthesis is chosen as an analytic technique, as it is a good way to analyze differences between cases on a certain variable (Yin, 2009).

For the analysis of the data, the interviews will first be transcribed and then coded with the use of computer-assisted qualitative data analysis software (CAQDAS). The CAQDAS method is a good method to discover similar results between different (types of)

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interviews (Bryman, 2008). Furthermore, this method fits in with semi-structured interviews and creates replicability by having a clear coding scheme which other scientist can use in future research (ibid).

For the coding scheme, the measures in the operationalization are used, which can be described as selective coding (Boeije, 2010). A code is for example involvement of stakeholders and engagement with evaluators. However, some of the codes are developed in the process of data collection, as is customary in grounded theory and inductive research (ibid). Thus, there is a mix in the coding scheme between inductive and deductive coding. The coding scheme was tested on one interview to test whether it worked sufficiently, after which it was revised and improved, and thereby making it more applicable for the following interviews. The full coding scheme can be found in appendix C. Here, it is also noted whether a code is deductively or inductively

constructed.

A critical notion on the interviews needs to be placed. The interviews will be conducted, transcribed and coded in Dutch. For this research, relevant quotes will be translated from Dutch to English. This will off course be done with the greatest care. However, this can possibly cause certain information to be lost-in-translation. This would mean that the analytical value of the interviews can be degraded. As stated before, quotes will be meticulously translated. Furthermore, the original Dutch transcripts of the interviews will be available for (Dutch) researchers to potentially redo the translation for future research.

As is stated in section 4.4 above, in the analysis, the different projects will be compared with each other. For both contract accountability and contracting capacity, an overview is made in chapter 6 and 7, were the different projects are ranked based on the

measures of the operationalization. For the measures on accountability it will be a process of checking the box. For the measures on contracting capacity, an ordinal ranking is made. This ranking was done in two ways: a score of one to three, meaning from low to high, and the five different projects ranked from one to five dependent from each other. After testing both methods, it was decided to use the first method, as it can create the opportunity to reveal more nuances between the different projects.

Especially for Rijkswaterstaat is proved to be hard to distribute ranking 4 and 5

amongst the two projects, as both scored well on the same measures. An overview of the scores of both the methods can be seen in appendix D.

After this, the different projects are placed in the graph of figure 4 that is shown in section 3.2, which reveals the position of the different projects between one another. This method of analysis creates a structure in the different types of data sources and in the wealth of data. Finally, the different patterns that connects contracting capacity and accountability with each other, are explained and analyzed cross case, which create the

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opportunity to see the differences and similarities between the different cases, which aligns with the research design (Yin, 2009).

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5. CASE DESCRIPTION

Following the earlier mentioned selection criteria, three different government bodies are selected for this research: the municipality of Assen, the municipality of Amsterdam and Rijkswaterstaat. The geographical situation of the different projects throughout The Netherlands can be seen in the map below.

FIGURE 7: MAP OF LOCATIONS OF THE PROJECTS IN THE NETHERLANDS

An overview of the key characteristics can be seen in table 3 below. In the remainder of this section, the different projects will be explained individually.

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TABLE 3: OVERVIEW OF THE PROJECTS (TENDERGUIDE, 2010; TENDERNED, 2013; TENDERNED, 2014)

Project Location Public

contractor Year of tender Year of Comple tion Maintenan ce period Contract type A12 Lunetten-Veenendaal Utrecht Rijkswaterst aat 2010 2013 20 years DBFM A12 Veenendaal -Ede-Grijsoord Ede Rijkswaterst aat 2014 2016 16 years DBFM Weiersbrug / Groningerb rug Assen Municipality 2014 2016/ 2017 20 years DBM/ UAV-gc Blauwe Klap

Assen Municipality 2013 2015 20 years DBM/ UAV-gc Golfbreker IJmeer Amsterd am Municipality 2013 2014 10/15 years DBM/ UAV-gc 5.1. MUNICIPALITY OF ASSEN

For the municipality of Assen, that is situated in the northeast of the Netherlands, two projects are selected which are described below. At the moment, these two projects are the only projects in Assen that have a DB(F)M character, with a long maintenance period included, and that are publicly procured.

5.1.1. WEIERSBRUG & GRONINGERBRUG

The Weiersbrug and the Groningerbrug are both bridges across Het Kanaal. These bridges are part of a larger project, which is called the Blauwe as (Blue Axis). The goal of this project is to make Het Kanaal sailable again for recreational boats.

Both bridges were procured in the same procurement process, which took place in 2014. The type of contract is DBM, because full financing is still provided by the

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a 20 year maintenance of the bridges period is included. Besides the design, build and maintenance of the bridges, the design and construction of a dam wall and the

surrounding public space is included in the procurement.

In the procurement process there were four companies who applied to this tender (Tenderned, 2014b). A consortium of two companies, Roelofs Beheer BV and J.C. Krans BV, won the tender.

FIGURE 8: GRONINERBRUG (LEFT) AND WEIERSBRUG (RIGHT)

5.1.2. BLAUWE KLAP

The Blauwe Klap is part of the same project on the Blauwe As. In the procurement process, the Blauwe Klap is also called Industriebrug, after the neighboring industrial area. This bridge is the largest of the several bridges and was procured in 2013. The bridge was completed in 2015, which also marked the start of the 20 year maintenance period on the bridge in this DBM contract. Besides the construction of the bridge, the development construction of a dam wall, the surrounding public space and a new sewage system in the area, was also part of the tender.

In the procurement process there were three companies who applied to this tender (Tenderned, 2013). The company Van Hattum en Blankevoort won the tender.

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5.2. MUNICIPALITY OF AMSTERDAM

In the municipality of Amsterdam only one project is selected, because this is the only project that has a DBFM character and that is in the exploitation phase at the moment.

5.2.1. GOLFBREKER IJMEER

The golfbreker in the IJmeer is a breakwater project in the water in front of a harbor in the neighborhood of IJburg.

The procurement started in 2013 and the project was completed in 2014. The type of contract for his project is DBFM. The maintenance period was first set in the tender for 15 years, but was later reduced to a 10 year maintenance period. This was because the breakwater was dependent on the construction of a new neighborhood on the new to be constructed artificial island of IJburg II (Res5). At first it was unsure when this

development took place, because it could affect the flow of water and thereby the necessity of the breakwater in the first place. Due to the fact that Dutch law states that temporary constructions cannot be at a certain location for longer than 10 years, the decision was made to avoid the process of going through various legal permits and make it a 10-year procurement. The procurement process took place on the basis of Best Value Procurement, whereby the price was the leading aspect (Tenderned, 2014a). In the procurement process only one company applied and thereby winning the tender (ibid). This company is called Hakkers Waterbouw.

FIGURE 10: GOLFBREKER IJMEER

5.3. RIJKSWATERSTAAT

Rijkswaterstaat is the national government body that is responsible for public works. The construction of roads, bridges and waterways is amongst their tasks.

Rijkswaterstaat was amongst the first companies who applied DBFM type contracts in The Netherlands (Algemene rekenkamer, 2013). Mainly large infrastructure projects,

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type. For these reasons, the projects have been addressed quite extensively in reports and research (e.g.: Klijn & Koppenjan, 2016; Minister van Financiën, 2016).

For this research, two projects are selected that fit in with the earlier mentioned selection criteria: the A12 highway Lunetten-Veenendaal and the A12 highway

Veenendaal-Ede-Grijsoord. A third highway project, the A15, was initially subject of this research, but the public contract manager was not willing to cooperate. This was

because of an excess of media-attention on some of the pour performing aspects of the project.

5.3.1. A12 HIGHWAY LUNETTEN-VEENENDAAL

This project consists of the design and realization of an expansion in capacity of the A12 highway between Utrecht Lunetten and Veenendaal over a total length of 30 kilometer. This includes amongst other things, the construction of several bridges, Eco ducts, sound barriers, traffic management systems and public lighting.

It was procured in 2010 in a DBFM contract and the construction of all sections of the highway was finished in 2013. This was when the 20 year maintenance period started for the section Utrecht Lunetten - Maarsbergen, which is slightly smaller than the sections that needed to be built (Tenderguide, 2010). The consortium who won the tender, is called De Poort van Bunnik, which consists of several subsidiary companies of the infrastructure developer BAM (Algemene Rekenkamer, 2013).

FIGURE 11: A12 LUNETTEN-VEENENDAAL DURING CONSTRUCTION (BEELDBANK RIJKSWATERSTAAT / SNOW WHITE FOTOGRAFIE, 2012)

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5.3.2. A12 HIGHWAY VEENENDAAL-EDE-GRIJSOORD (VEG)

After the successful completion of the abovementioned section of the A12 highway, a new section was procured in 2014. It consists of the expansion of the existing highway with one extra lane on each side of the road over the length of 11 km from Ede to the intersection of Grijsoord. An important aspect in this project was the ecological factor, because this highway cuts straight through an important nature reserve. Works like overpasses and Eco ducts are important aspects in the project. After the completion in 2016, a 16 year maintenance period started for the project. The section of the A12 that needs to be maintained is slightly bigger than the section that needs to be built: a stretch of road, covering approximately 7 km between Veenendaal and Ede. The choice for a 16 year maintenance period was made, due to the fact that both tenders of the A12 will be finished at the same time, and thereby giving the opportunity for Rijkswaterstaat to procure a larger section of the highway from that moment onwards. The company Heijmans has won the tender for this road and works with several subsidiary

companies.

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6. ACCOUNTABILITY IN DUTCH CASES

The next section will address the results of the gathered data done by interviews and desk research. For accountability, the three cases will be analyzed separately. The indicators, which are stated in the conceptual framework, are used as guidelines for the analysis.

This chapter will also discuss and answer the fourth sub question: To what extent does accountability occur in The Netherlands?

6.1. MUNICIPALITY OF ASSEN

As stated before, for the municipality of Assen, two projects were analyzed. Due to the fact that both projects are relatively new, the bridges are all in good shape. This created the situation that in the maintenance phase not much has gone wrong so far. The bridge is working properly and all is in order. For this reason, there have not been any reasons for the municipality to impose sanctions based on technical aspects (Res1; Res2; Res3). In the future, this might change, due to natural wear and tear of the bridge (Res1; Res2; Res3). This aspect was underlined in all the different cases.

Due to prior negative situations is Assen, where bridges would stay open for too long and thereby blocking the traffic, the municipality formulated strict terms in these contracts on the maximum time the bridges are unavailable to road traffic as well as for boats (Res2). These strict terms on for example technical malfunctions may lead to the fact that the lower limit of what is technically possible is reached earlier. In turn, this would mean that it is easier to perceive the performance as insufficient, what can possibly create a base for more sanctions (Res1). This is an interesting aspect, because prior negative experiences in Assen can influence current accountability. One

respondent stated that these prior problems created a stricter focus on accountability (Res1). However, the municipality of Assen was more hesitant to admit certain

problems or flaws in prior situations, but the contract manager did state they had

formulated stricter terms in the contracts (Res2). This ambiguity or disagreement in the cause-effect relationship may arise from the fact that there is a lack of open relationship, as will be further explained in chapter 8.

However, in the construction phase, there were some aspects that did not go according to plan. For the Blauwe Klap, no form of sanctions was given (Res3). The private

contract manager states that this was influenced by two main reasons. Firstly, this project was the first project with an integrated DBM contract that was finished. This resulted in the fact that the municipality was not sure how to act in such contractual agreement (Res3). Secondly, the municipality noticed that the contractor was

experienced in their respective field. For these two reasons, the public contract manager of the municipality of Assen stated that they saw the way the private contractor worked

Balancing the contract : the relation between contracting capacity and contract accountability