Contractual Uncertainty, Power and Public Contracting

This article discusses the concept of contractual uncertainty and assesses its impact upon the ability of public sector bodies to obtain value for money from their suppliers. Particularly in the realm of public private partnerships, governments around the world are increasingly developing specifications that are likely to be subject to contractual uncertainty. Contractual uncertainty is not necessarily a problem in itself, but can be if the public body cannot avoid an unfavourable power relation in its dealings with the supplier, because it is in a poor position to undertake the inevitable post-contractual negotiations. The argument is illustrated with two cases from the UK public sector that highlight the fact that British public bodies are often seeking to manage contractual uncertainty from a position of weakness.