Shades of Sunshine: Adaptation of Contract Completeness in Florida Public Procurement

Abstract

Public procurement contracts often fail, leading to cost overruns and amendments negotiated ex post. We examine how government agencies modify successive contract completeness—the degree to which all contingencies are specified in a contract—in response to contract failures. Utilizing a novel preprocessing methodology that extends previously developed measures of completeness to produce more granular insights, we measure the completeness of 7,725 construction and maintenance contracts from the Florida Department of Transportation between 2008 and 2024. The findings show a rise in contract completeness and a corresponding decline in contract failures in the long term. No adaptation of contract completeness to failures is found in the short term. Furthermore, we observe evidence of a discounting mechanism for transaction costs associated with writing complete contracts, which allows completeness levels to remain high even during months with a high volume of contract drafting.