ABSTRACT
In the last two decades measuring and improving performance of public sector organizations has become an increasingly important and debated issue. Managerial techniques developed in the private sector for performance measurement and improvement have been imported and adapted for public sector organizations in practices and theories. Studies on the private sector have investigated reputational mechanism effects. One method that public procurement officials can use to reduce procurement risk is to request information regarding a supplier's past performance and to use this information in source selection, as it is standard in private procurement. By now this method is largely applied in the US federal procurement system. Quantifying the costs and benefits of running a reputational mechanism in public procurement is essential, especially given the sheer economic size of this market, but little reliable evidence is available at present. The interaction between the shape of explicit procurement contracts and the design and functioning reputational mechanisms remains an important topic for future research.
