Systemic risk in major public contracts

This paper presents a novel approach to the characterisation of “systemic risk” in the context of public sector procurement and contracting. We argue that contemporary risk management practices in project and programme management exhibit a number of limitations; this is particularly relevant to public sector contracting which, the authors postulate, would benefit from more sophisticated practices that are capable of dealing with risk ‘systemicity’. Drawing on a sample of public sector procurement exercises commissioned by the UK Ministry of Defence (MoD), the paper presents a multi-method approach positioned towards increasing our understanding of complex outsourcing contracts. The results suggest a need for more appropriate methods of risk analysis, and discusses the practical implications