A Conceptual Framework for Efficient Design of Counter-Obligations in Government Contracts and Licenses

5th International Public Procurement Conference, Seattle, USA, August 2012

13 Pages Posted: 24 Sep 2012 Last revised: 14 Oct 2014

Sandeep Verma

Government of Rajasthan - Department of Home

Date Written: August 17, 2012

Abstract

A number of countries impose counter-obligations on parties desirous of obtaining government contracts and regulatory licenses, generally on account of a strong desire and need to obtain reciprocal benefits for specific constituencies for the contracts so awarded or the privileges so accorded. These counter-obligations are usually applied in inefficient procurement markets; and could also serve as useful political instruments for mollifying domestic or local constituencies. An interesting feature, in most cases, is that the license or the contract is required to be granted or entered into upfront, whereas the counter-obligations are usually required to be discharged over much longer periods of time. Effective design of a counter-obligations framework is therefore a matter of critical concern for policy-makers and other stakeholders; and this short paper attempts a comprehensive review of various important aspects that need to be taken note of while designing policies and regulations, in order that the counter-obligations mechanism is able to effectively deliver expected public benefits.

Keywords: Public Procurement, Offsets, Counter-obligations, Government Contracts

JEL Classification: K12

Suggested Citation

Verma, Sandeep, A Conceptual Framework for Efficient Design of Counter-Obligations in Government Contracts and Licenses (August 17, 2012). 5th International Public Procurement Conference, Seattle, USA, August 2012. Available at SSRN: https://ssrn.com/abstract=2151084 or http://dx.doi.org/10.2139/ssrn.2151084

Sandeep Verma (Contact Author)

Government of Rajasthan - Department of Home ( email )

Room 2217
Main Secretariat
Jaipur, Rajasthan 302005
India
+91-141-2227464 (Phone)

HOME PAGE: http://www.BuyLawsIndia.com

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