Conflict resolution practice in public procurement: evidence from Russia

Abstract

PurposeThis paper aims to analyze conflict resolution practice in public procurement. The specific feature of this sphere is the presence of the state 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.Design/methodology/approachThis paper is based on the findings of a large-scale survey of suppliers conducted in 2017. To identify the characteristics of suppliers that use different conflict resolution mechanisms, probit-models were evaluated. For robustness check, combined mechanisms for resolving conflict situations were also considered and multi-nomial logistic regression was used.FindingsThe 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.Practical implicationsThe results of the study can be used as a justification for the development of a regulatory and organizational framework for the use of negotiations, mediation, arbitration and other alternate methods of conflict resolution in public procurement.Originality/valueThis paper makes an important contribution to the conflict-handling strategies of businesses and government by presenting for the first time a quantitative assessment of the prevalence of mechanisms for resolving conflicts in public procurement and factors influencing the choice of a conflict resolution mechanism.