Conflict Resolution in Russian Public Procurement: Understanding Supplier Strategies in a State Dominated System

Abstract

This paper, based on a large-scale online survey of suppliers conducted by the HSE IIMS in 2017, analyzed various conflict resolution strategies in public procurement. The specific feature of this sphere is the presence of the state as the dominant party in the contractual relationship, and the resulting differences in assessing the chances of protecting one’s interests in court, as well as the effectiveness of judicial conflict resolution mechanisms. At the same time, this paper proceeded from the fact that suppliers differ not only in their practice of resolving conflict situations after the conclusion of a contract but also in the type of behavior that determines the choice of each strategy. The survey results showed that the majority of suppliers prefer to resolve conflicts in public procurement using an out-of-court negotiation with procurers, while only 31% of respondents resort to judicial proceedings. At the same time, suppliers potentially involved in informal relations with procurers, are less likely to go to court and less often use negotiations. The paper will provide a possible explanation for the revealed patterns in the behavior of suppliers.