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SUPPLIER BEHAVIOUR AND PUBLIC CONTRACTING IN THE ENGLISH AGENCY NURSING MARKET

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Abstract

The worldwide expansion in the use of private firms to deliver public services and infrastructure has promoted a substantial literature on public sector contract and relationship management. This literature is currently dominated by the notion that supplier relationships should be based upon trust. Less prominent are more sceptical approaches that emphasize the need to assiduously manage potential supplier exploitation and opportunism. This article addresses this imbalance by focusing upon the recent experience of the English National Health Service (NHS) in its dealings with its nursing agencies. Between 1997 and 2001, the NHS was subjected to considerable exploitation and opportunism. This forced managers to adopt a supply strategy based upon an assiduous use of e-auctions, framework agreements and quality audits. The article assesses the effectiveness of this strategy and reflects upon whether a more defensive approach to contract and relationship management offers a viable alternative to one based upon trust.

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