Abstract

This study analyzes how agency politicization shapes contracting risk in the design of U.S. federal procurements. Political influence is manifested in contracting risk in three interrelated ways: the ideological nature of the agency’s mission, centralization of agency decisions, and appointee politicization. A statistical analysis of over a million U.S. federal contracts reveals that the organizational location of agency decisions is most critical for understanding the design of procurement agreements within ideologically salient agencies. Specifically, procurement decisions reflecting low government contracting risk are more frequently made in a decentralized manner away from high level political appointees, while those reflecting high government contracting risk are more frequently determined in a centralized manner that is organizationally proximate to these high level appointees. The broader lesson from this study is that the efficient division of executive branch authority across administrative hierarchies contributes to benefitting narrow particularistic interests at the expense of collectivist interests.