This paper deals with a Niskanen type of public-procurement agency. We show that the procurement game should be separated into an investment game and a project game, the first game to be played before nature determines the actual realizations of benefit and costs of the project, the second game...

In public procurement, a temporal separation of award and actual contracting can frequently be observed. In this paper, we give an explanation for this institutional setting. For imperfect procurement contracts such a separation may increase efficiency. Efficiency can be increased by postaward,...