D’Alpaos C. (2009).
Penali e schemi di incentivo/disincentivo ottimali nei contratti di appalto delle opere pubbliche: modelli a confronto. Valori e Valutazioni, Volume 3, pp. 91-101, Novembre 2009.
The deterioration of public finance and increase in global competition have forced governments and public institutions to obtain the best value for money through the purchase of goods, works and services in the form of procurement contracts. However, delays in public procurement contract execution times are often a negative by-product, that can quickly erase efficiency gains of public procurement. To avoid delays, the procurer – a Contracting Authority – usually includes in the contract a disincentive fee, i.e. a penalty, for each day of delay the contractor produces in the delivery date and/or an incentive fee, i.e. a premium, for each day the contractor anticipates the delivery date. The recent Italian experience has highlighted that the issue of delays in public procurement contracts is relevant: there is puzzling evidence that consistent delays are still present regardless of the fact that explicit penalty/premium clauses are included in procurement contracts. The paper provides a general framework to determine the optimal incentive/disincentive fee to induce a contractor to respect the contracted delivery date and investigates the effects of including whether a penalty clause or an incentive/disincentive scheme in public procurement contracts.