The effect of the chosen procurement model on the contractual performance is an important but less researched area in governance literature. Therefore, the aim is to study the ramifications of procurement options on the contractual hazards emanating due to information asymmetry.
Four Indian MSW case studies provided the necessary evidence for the present study. Cross case analysis was conducted from the perspectives of information asymmetry, contract management skills of urban local bodies (ULBs), and uncertainty.
The findings suggest that bundling of MSW supply chain would increase the uncertainty of the project, and that contract management skills have a detrimental effect but more in a bundled project. Accordingly, occurrences of information asymmetry and related contractual hazards are more in bundled projects.
The present understanding of the ULBs is not realistic enough to consider the full complexity of the strategic interactions between agents who are privately informed in an ill-developed institutional setting of the MSW sector. The current study will help untangle these complexities in keeping with the procurement model. Thereby the ULBs can focus on the steps required to address the residual uncertainties.
Limitations concerning generalizability of the findings to other projects, sectors, and geographical settings apply to this study.
This study provides significant practical directions on the sources of information asymmetry and its relation to the chosen procurement model, which is ignored thus far by the researchers and practitioners.
