Modeling the competition-restrictive actions in public works procurement

Abstract

PurposeWith the surge in public procurement, especially in developing countries, ensuring fair competition in procurement has assumed paramount importance. Academic endeavors in the domain of competition issues have often lacked the views of field-level functionaries. This study aims to involve a large number of expert practitioners in India to identify the significant contemporary competition risks in public procurement from the procurer and supplier sides and develop a model depicting the hierarchy of competition-restrictive actions (CRAs) in procurement based on their mutual interactions.Design/methodology/approachThe significant CRAs along the procurement cycle are identified through literature survey, interactive workshops and expert interviews. A questionnaire survey covering 143 respondents from 12 public organizations is used to evaluate their impact. Considering the complex causal interactions involved, interpretive structural modeling followed by MICMAC (Iimpact matrix cross-reference multiplication applied to a classification analysis is used to develop a hierarchical model of competition risks in procurement.FindingsTailor-made contracts, splitting of a project below competition thresholds, restrictive selection criteria and awarding the contract on nomination emerge as CRAs with the highest driving power. Horizontal collusion among vendors strongly depends on practices followed in the procuring organization.Research limitations/implicationsThe survey data and the experts’ opinions emanate from practitioners in India, which is a limitation. However, with necessary contextual calibrations, the study is of high functional utility to policymakers and practitioners.Social implicationsThe research facilitates a comprehensive understanding to procurement managers/policymakers of the CRAs along the procurement cycle and their interdependencies. It offers valuable insights for improving competition, which is foundational for optimal procurement outcomes.Originality/valueThe study enriches the public procurement domain knowledge by identifying and assessing the significant contemporary CRAs, examining their mutual interactions and developing an interpretive structural model. Although contributing to the body of knowledge, the study is unique in being grounded in field realities.