Competition, Chromium, and Contracts: The Interaction Between Bidding Intensity and Toxic Waste Releases

Abstract

The public procurement sector has a high impact on the environment including pollution from manufacturing. Competition is the primary way that the United States government ensures that the most efficient facilities receive contracts, but whether this competition leads to more, or less, pollution is unknown. We explore the impact of competition for contracts on contractor pollution in sectors that handle chromium, a toxic, yet necessary, component in many goods. We find that competition alone has negligible impact on overall chromium releases among contractors; however, the way chromium is used in the manufacturing process does. Contractors that use chromium as a component report higher releases of chromium waste than contractors that only use chromium in non-incorporative ways. However, when contractors face higher competition for contracts, pollution levels significantly decrease. This suggests that both competition and the use of the metal are important. Findings support a complex association between competition and pollution generation.