2024/07/03 by Brad Nathan · 1 voice
Business, Management and Accounting · Decision Sciences · #Auction Theory and Applications #Auditing, Earnings Management, Governance #Public Procurement and Policy
paper · pdf · doi:10.1111/1475-679x.12561
openalex publication_date 2024/07/03 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/15
ABSTRACT This paper studies how a federal procurement regulation, known as the Truth in Negotiations Act (TINA), affects the competitiveness and execution of government contracts. TINA stipulates how contracting officials (COs) can ensure reasonable prices. Following TINA, for contracts above a certain size threshold, COs can no longer rely solely on their own judgment that a price is reasonable. Instead, they must either require suppliers to provide accounting data supporting their proposed prices or expect multiple bids. Using a regression discontinuity design, I find that above‐threshold contracts experience greater competition (i.e., more bids), improved performance (i.e., less frequent renegotiations and cost overruns), and reduced use of the harder‐to‐monitor cost‐plus pricing, compared to below‐threshold contracts. These findings suggest that TINA's requirements enhance competition and oversight for above‐threshold contracts.