{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,5,13]],"date-time":"2026-05-13T09:09:13Z","timestamp":1778663353556,"version":"3.51.4"},"reference-count":79,"publisher":"Institute for Operations Research and the Management Sciences (INFORMS)","issue":"3","content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["M&amp;SOM"],"published-print":{"date-parts":[[2026,5]]},"abstract":"<jats:p>Request-for-quote (RFQ) is the most commonly used mechanism for contractor selection in project outsourcing. Problem definition: We study how RFQ design interacts with the time-cost trade-off in project execution and compare two common contract forms: time-incentive contracts (penalizing lateness) and cost-sharing contracts (reimbursing direct costs). Methodology\/results: Using a game-theoretic model, we characterize optimal RFQ designs under incomplete information about contractors\u2019 direct cost efficiency. Time-incentive contracts weaken competition, whereas cost-sharing contracts strengthen it, increasing work rates and shortening completion times. Clients prefer cost-sharing contracts, with this preference being stronger when time urgency is high, contractor heterogeneity is substantial, or the contractor pool is small; time-incentive contracts yield higher overall system efficiency in low-urgency settings, consistent with their prevalence in public projects. We derive a closed-form bound on the relative decrease in the client\u2019s payoff when using a fixed-term RFQ instead of a more complex upfront-fee RFQ and numerically show that fixed-term RFQs lose less than 0.28% of client payoff. Audit noise has no effect when correction costs are negligible or very high, but it introduces bidding frictions and lowers the optimal cost-sharing ratio when correction costs are moderate. Managerial implications: These insights guide contract selection by time urgency and market conditions and support the use of simple fixed-term RFQs with minimal profit loss.<\/jats:p>\n                  <jats:p>Funding: This work was partially supported by the National Natural Science Foundation of China [Grants 72501203, 72525012, 72188101, and 72242107].<\/jats:p>\n                  <jats:p>Supplemental Material: The online appendix is available at https:\/\/doi.org\/10.1287\/msom.2024.0894 .<\/jats:p>","DOI":"10.1287\/msom.2024.0894","type":"journal-article","created":{"date-parts":[[2026,1,12]],"date-time":"2026-01-12T11:48:44Z","timestamp":1768218524000},"page":"802-821","source":"Crossref","is-referenced-by-count":0,"title":["Penalizing Lateness or Sharing Cost: Project Outsourcing via Request-for-Quote"],"prefix":"10.1287","volume":"28","author":[{"ORCID":"https:\/\/orcid.org\/0000-0002-8174-3054","authenticated-orcid":false,"given":"Chengfan","family":"Hou","sequence":"first","affiliation":[{"name":"School of Economics and Management, Tongji University, Shanghai 200092, China; and Laboratory of High Quality Urban Development and Strategic Decision, Tongji University, Shanghai 200092, China"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"ORCID":"https:\/\/orcid.org\/0000-0002-5961-722X","authenticated-orcid":false,"given":"Mengshi","family":"Lu","sequence":"additional","affiliation":[{"name":"Mitch Daniels School of Business, Purdue University, West Lafayette, Indiana 47907"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"ORCID":"https:\/\/orcid.org\/0000-0001-6012-6076","authenticated-orcid":false,"given":"Tianhu","family":"Deng","sequence":"additional","affiliation":[{"name":"Dongwu Business School, Soochow University, Suzhou, Jiangsu 215006, China"}],"role":[{"role":"author","vocabulary":"crossref"}]},{"ORCID":"https:\/\/orcid.org\/0000-0003-4538-8312","authenticated-orcid":false,"given":"Zuo-Jun Max","family":"Shen","sequence":"additional","affiliation":[{"name":"Faculty of Engineering & Faculty of Business and Economics, The University of Hong Kong, Hong Kong, China"}],"role":[{"role":"author","vocabulary":"crossref"}]}],"member":"109","reference":[{"key":"B1","unstructured":"Asana (2024) Project management. 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