Competition In Public Procurement Research Articles

Intensifying Competition in Public Procurement

The intensity of competition is typically measured according to the number of bidders on any given public procurement market. By analysing the Tenders Electronic Daily database 2017–2020, we examine the conditions in the contract notices which have an impact on increasing competition in launching public procurement procedures. The research findings show that the longer duration of the contract, the lowest price awarding criteria, the division of the subject matter into lots and the possibility of negotiations are essential elements which can activate bidders. These are unequivocal prerequisites for creating effective and fair competition in public procurements.

Full and open competition in public procurement: a noble lie

The notion that the US federal government provides equal opportunity for all businesses to potentially receive contracts may be, as discussed in Plato's Republic, a noble lie. In this context, the noble lie represents government's attempt to advance an agenda that is ostensibly in the public interest yet is empirically untrue. Using the 'full and open competition' designation and number of offers as a measure of actual competition for government contracts, this research shows that competitive contracting by the US federal government is more an ideal than actual practice. Based on these findings, it is asserted that full and open competition is consistent with a noble lie, existing as an ideal not regularly attained, but nonetheless offered in service of other ends. Contextualising and linking the noble lie with trust signals areas for future research regarding competition in public procurement.

The Influence of The State Purchaser on Competition in Public Procurement in Russia

From the economic point of view, the competitive aspect of public procurement is a relatively poorly studied area of public procurement policy research, as economists tend to focus more on the problems of risk sharing, incentives formation, overcoming information asymmetry specific to public procurement. On the other hand, the study of public procurement from the perspective of supplier firms also receives limited attention, probably due to the fact that, from the economic point of view, their analysis belongs to the peripheral area of microeconomics, focusing on the analysis of monopsony and purchasing power of the state. This article attempts to characterize public procurement in terms of the specifics of the market structure of this quasi-market. As a premise of the analysis, it should be emphasized that a competitive analysis of the regulation of the state as buyer and its influence on the market cannot be properly conducted in situations where it is the only buyer (i.e., in purely "public markets") or where it has no significant market power (i.e., in purely private markets). And if the first situation is analyzed through the prism of sectoral regulation (because of the pure monopsony of the public buyer), in the second case the influence of public procurement is almost insignificant (because of the lack of purchasing power in the population) and is likely to remain below all thresholds of significance. The features of the public procurement market, where the state buyer dominates, having large-scale purchasing power and interacting with private markets are revealed; the consequences of his behavior are determined.

Full and Open Competition in Public Procurement: A Noble Lie

Full and Open Competition in Public Procurement: A Noble Lie

On the Competition and Transparency in Public Procurement During COVID-19 Pandemic in European Union

Public procurement accounts in developed countries for about 20% of gross domestic product, thus is seen as a policy implementation tool. During COVD-19 outbreak, public procurement served as a basic tool for equipping institutions and citizens with medical supplies, ventilators, and personal protective equipment. We use data on public procurement in European countries during first wave of COVID-19 pandemic, with aim to study transparency and competition in public procurement process during ongoing state of emergency. Quantitative analysis of the data indicates, that less transparent procurement procedures were primary used during acute outbreak of COVID-19 and that the level of transparency widely varies among countries regardless the extent of the epidemic. Data suggests that the use of less transparent procurement procedures and reduced competition is more suitable for small and medium enterprises, where share of tenders submitted by small and medium enterprises represents up to 87% of all less transparent procedures.

Совершенствование системы отношений участников государственного строительного заказа

The article identifies the potential opportunities of using the Balanced Scorecard (BSC) system by construction organizations in the Russian Federation as part of their participation in public procurement. The main projections of BSC are considered, on which construction organizations of the Russian Federation should rely. The authors substantiate the socio-economic significance of using the Balanced Scorecard by the construction company in order to increase the competitiveness as a participant in the competition in public procurement, in particular, its positive influence on the quality of construction and installation works and the activation of innovative activity.

Criminal legal regulations on cartels in Hungary

The present paper examines the system of legal means against unfair competition, with special regards to the means of criminal law and the characteristics of the criminal legal protection. The evaluation of the regulation is based on the provisions in force pertaining to the agreement in restraint of competition in public procurement and concession procedure, the emergence, and the correspondence of the rules of competition law and criminal law.

Competition in Public Procurement in the Czech and Slovak Public Health Care Sectors.

Sustainability of health financing is a critical issue for all countries, especially now in the COVID-19 period. The final level of achievements of critical public health goals is connected not only with the efforts of the people involved, but also with the availability of funding to cover the costs of the actions needed. One of the “internal sources” providing more resources to cover public health care costs is effective public procurement in the health care sector. According to existing scientific literature, a low rate of competition represents one important factor that has a direct negative impact on the efficiency of public procurement. The aim of our article is to examine the degree of competitiveness of public procurement in the Czech and Slovak health care systems and its impact on the final price of a contract. The research fully attested the findings of those studies carried out so far – the higher the number of tenderers, the lower the final price, even in the Czech and Slovak health sectors. However, the average number of tenderers is only around two and in the Czech Republic for more than half of the tenders only one bid was submitted.

The effect of optimism bias and governmental action on siltation management within Japanese reservoirs surveyed via artificial neural network

ABSTRACTReservoirs are installed as long-term assets to guarantee water and energy security for decades, if not centuries. However, the effect of siltation undermines reservoirs’ sustainability because it significantly reduces the reservoirs’ original capacity. The present paper attempts to evaluate the global reservoir siltation problem with the optimism bias theorem introduced by Kahneman and Tversky and applied to infrastructural mega-projects by Flyvbjerg and Ansar using artificial neural networks (ANNs) algorithms for large Japanese reservoirs. Japan possesses suitable long-term data and a legal directive concerning the sediment capacity siltation duration, which serves as a valid guide to check whether, over the past 100 years, engineers, planners and managers were capable of judging the sediment input correctly. Various ANN models were established to emulate Japanese reservoir siltation behavior. The networks demonstrate that reservoirs in Japan suffer from optimism bias. In contrast to the law, the dead storage volume of an average dam is supposed to reach capacity after 52 years. This finding joins the overall observation that mega-projects generally and globally suffer from optimism bias. The emulations were subsequently screened for a presumed influence of governance actions, namely, indicating plus monitoring and the change in the market competition situation. While reservoir siltation appears to continue regardless of the level of competition in public procurement, monitoring directives appear to have a considerable impact on improved siltation management, which demonstrates that dedicated governance action can significantly strengthen the sustainable behavior of key infrastructure elements such as reservoirs.

DIRECTIONS OF MINIMIZATION OF FINANCIAL SCAMS IN THE FIELD OF PUBLIC PROCUREMENT

Introduction. Ukraine is undergoing an extremely important and complex process of forming a modern and effective public procurement system aimed at creating a competitive environment and further developing fair competition in public procurement, as well as ensuring compliance with international obligations by consistently adapting Ukrainian legislation to EU standards. The task of public procurement reform is to significantly reduce financial fraud in this area and achieve savings in public funds. The purpose of the article is to analyze the process of reforming the public procurement in Ukraine, focusing on the latest changes, substantiation of proposals for ways to minimize financial fraud in the field of public procurement. Results. The main milestones of formation and improvement of the public procurement system in Ukraine are considered. Emphasis is placed on the features of the current stage, which are to create better conditions for bidders and prevent financial fraud in public procurement, expanding the list of violations and strengthening penalties. Data on the most common types of violations among procurement customers are given. Conclusions. The existing risks of unfair competition in procurement are indicated and the ways of minimizing financial fraud in this area are substantiated. Emphasis is placed on the importance of preventive measures that can be used to detect violations before the conclusion of the contract. In the context of strengthening the effectiveness of control measures, it is proposed to introduce a direct rule of criminal liability for violations in the field of public procurement. The implementation of the proposed measures will help increase the effectiveness of public policy in the field of public procurement, which will ultimately allow for more economical and efficient use of public funds.

Full and Open Competition in Public Procurement: Values and Ethics in Contracting Opportunity

ABSTRACT Governments have sought to respond to increasing pressures to accomplish aims with efficiency and at low cost. A perception of the potential for corruption and waste of public resources has been met with calls for transparency and accountability. Competition is believed to lead to impartial, optimal outcomes, but attention paid to competition in the literature suggests that the benefits are not universally clear. This paper considers ‘full and open competition’ as a policy promise, ethical obligation, and a matter of justice, drawing upon work of John Rawls and others, in the United States case. The research question is: What do Federal procurement data tell us about the nature of full and open competition in practice? This study draws upon contract data available from the U.S. Federal government, for fiscal years from 2015 to 2018. Through an ordinal regression, it is suggested that variation in the extent of competition results in part from size of project, size of the business (or potential business) receiving the project, and the industry classification, particularly in cases centering on commercial acquisitions. While ‘full and open competition’ is frequently employed, the difference between the normative value of the concept in statute, and practical outcomes in implementation, is clear. This difference has consequences for both vendors and the government.

On the Fuzzy Concept of Competition in Public Procurement

Effective competition is often recognized as instrumental to achieve the highest level of value for money in public procurement. At the same time, enlarging the set of participating firms is also seen as way to raise the intensity of competition. This paper argues that even in simple competitive environments with undifferentiated products the link between participation and competition is less obvious than normally assumed. Policy makers’ increasing concerns for primary as well as secondary objectives in public procurement tend to further weaken the link between participation and competion. Moreover, regulatory constraints to favor multi-award outcomes, while blurring the concept of competition altogether, risk to create the conditions for anti-competitive outcomes.

Legislative framework of in-house procurement

The article “Legislative Framework of In-house Procurement” examines the importance of the concept of the in-house transactions in Public Procurement. The purpose of the work is to analyse the Legislative Framework from the perspective of the principle of free competition. The study of free competition is based on works and the main ideas of the following authors: Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Robert Malthus, John Stuart Mill, John Maynard Keynes, Friedrich August von Hayek and Milton Friedman. Having done the analysis of the EU directives and regulations concerning In-house Procurement (Directive 2014/24/EU; Directive 2014/25/EU; Directive 2013/34/EU; Case C-107/98, Case C-26/03, Case C-84/03, Case C-295/05, Case C-480/06, Case C-324/07, Case C-573/07, Case C-196/08, Case C182/11 and C183/11), as well as normative regulations of several countries, the author made a conclusion, that In-house Procurement contains considerable threats to the principle of free competition in Public Procurement. In-house Procurement contains considerable threats to the principle of free competition in Public Procurement. The data obtained confirm this hypothesis. The results obtained allow us to develop recommendations for the Legislative Framework of In-house Procurement. The results of the research can be used by procurement theoreticians and practitioners.

Modelo difuso de apoyo para la selección de contratistas en obras de construcción

The major employer in Turkish construction sector is the public and the selection of contractor within the public sector is implemented in accordance with the regulations. Sound utilization of public resources in developing countries with certain development plans is very important; also the establishment of transparency and competition in public procurement increases saving and encourages the correct usage of tax revenues. Within this context, keeping the quality while increasing the level of competition and having successful public investments will be possible by selecting the most ideal contractor. The key for success in public investments on construction projects is to provide the minimum project cost with the ability to reach at the required quality level within the determined period; and therefore some criteria other than the amount of bid should be determined for construction tenders and the evaluation should be one within the scope of such criteria in order to select the contractor. A fuzzy logic methodology is used within the scope of this study, in which the criteria except the price are evaluated with the help of a model and the verbal terms are modeled.

Public procurement and mechanisms of competition. Example of an open consortium

Efficiently functioning mechanism of competition in public procurement is crucial for the development of the Polish national economy. The objective of the article is to prove, based on the research conducted by the Author, that the participation of bidding consortia in public procurement procedures for construction works strengthens market competition mechanisms in public procurement and increases effectiveness of public procurement.

The analysis of powers of the state authorities in the control of public procurement

In the article the concept of the control in public procurement and the state authorities, which according to the law, it is carried out, are defined, powers of control in the field of public procurement and some problems of its implementation are analyzed. One of the aspects of the implementation of economic policy in our country are issues of public procurement. The functioning of public procurement requires ensuring effective use of public funds for the development of competition, transparency and openness of the procurement process. Since the existence of any system is impossible without the creation of adequate conditions of control of its functioning, the issue of state control over the implementation of public procurement procedures is quite relevant. The control of public procurement in modern conditions plays an important role, dues to the large number of violations and abuses in public procurement. Since control in public procurement is carried out by public authorities, it refers to one type of state control. The Law of Ukraine "On public procurement" has made numerous changes to the procedure of public procurement. The control of public procurement is a systematic monitoring of spending of public funds in the acquisition of goods and services of good quality, in the right amounts, at the right time, at an affordable price, in a suitable supplier for public funds to ensure fair competition among participants, openness and transparency at all stages of procurement, as well as objective and impartial evaluation of bids. One of the main tasks of the Antimonopoly Committee of Ukraine is participation in the formation and implementation of competition policy control to create a competitive environment and the protection of competition in public procurement. Nowadays some problems related to the using of updated legislation arise in the area of public procurement, particularly in the area of state regulation and control of public procurement. The Law of Ukraine "On public procurement" clearly defines a comprehensive list of public authorities, which can control in public procurement such as the Antimonopoly Committee of Ukraine, the Accounting Chamber, the State Audit Office of Ukraine to be distinguished from the bodies exercising state regulation of public procurement. Despite the constant updating of the legislation on public procurement, so far there are problems with the implementation of state control of public procurement.

The legal description of procedures for public procurement by law of Ukraine «On public procurement»

The article analyzes the main changes to the procedure of public procurement in Ukraine, the features of bidding, competitive dialogue and negotiation procurement of goods, works and services to meet the needs of the state and the local community are determined by. The adoption of the Law of Ukraine "On public procurement" provides for the introduction of transparency from planning to delivery of goods, ensuring accessibility for analysis and control of the public, the efficiency and effectiveness of the appeal, raising professional buyers, optimizing functions of the competent authority in the public procurement, improving the rules and conditions of public procurement, creating additional conditions to combat corruption, promoting the implementation of the Association Agreement between Ukraine and the EU. According to Art. 12 of the Law of Ukraine "On public procurement" procurement can be made by applying one of the following procedures: the open tenders; the competitive dialogue; the negotiation of the purchase. According to Art. 12 of the Law of Ukraine "On public procurement" the customer makes the purchase procedure by using electronic procurement system. Previously, the using of electronic means in the purchase procedures was a right and not an obligation of the customer. Introduction of e-procurement and electronic appeal aims to increase competition in public procurement and reducing corruption. The open tenders are based on the principles of openness and equal (non-discriminatory) access to the procurement of all participants, however, with the mandatory using of electronic procurement and the electronic auction. The competitive dialogue are used by the customer in the event that it is impossible to determine the required technical, quality characteristics or the subject of procurement are consulting, legal services, development of information systems, software, research, experiment or development, the performance of research and development, construction, determination requirements for the implementation of which requires negotiations. The negotiation of the purchase is a prototype of public procurement procedures, which assumed the old law, and is used as an exception. Major changes in the conduct of public procurement procedures lies in the fact that the customer performs procurement procedure through the using of e-procurement system. Previously, the using of electronic tools in the procurement procedures were right but not an obligation of the customer. This will reduce corruption and increase competition in this area.

HARMONISING PUBLIC PROCUREMENT IN THE SADC

The promotion of international trade is seen as one of the important instruments to ensure development in developing nations and regions. The history of the World Trade Organisation (WTO) and the drafting of many regional and similar international trade agreements are evidence of this. The Southern African Development Community (SADC) is no exception.1 It is therefore strange that many states that are members of the WTO and actively encourage the opening up of international borders to free trade do not include public procurement2 in such free trade arrangements. This is particularly evident in developing states. If the WTO Government Procurement Agreement (GPA), which is a plurilateral agreement, is considered it is clear that many states do not wish to open their internal markets to competition in the public procurement sphere. It is therefore not surprising that public procurement has been described as the last rampart of state protectionism (Ky, 2012). Public procurement is an important segment of trade in any country (Arrowsmith & Davies, 1998). It is estimated that public procurement represents between 10% and 15% of the gross domestic product (GDP) of developed countries and up to 25% of GDP in developing states (Wittig, 1999). Unfortunately, governments often expect private industry to open up national markets for international competition but do not lead the way. Except for the limited use of pooled procurement,3 no specific provision is at present made for the harmonisation and integration of public procurement in the SADC. In view of the proximity of the member states, the interdependency of their economies and the benefits that can be derived from opening up their boundaries to regional competition in public procurement, the possibility of harmonisation and deeper integration in this sphere needs to be given more attention. The importance of public procurement in international trade and regional integration is twofold: first, it forms a substantial part of trade with the related economic and developmental implications; secondly, it is used by governments as an instrument to address socio-economic issues. Public procurement spending is also important because of its potential influence on human rights, including aspects such as the alleviation of poverty, the achievement of acceptable labour standards and environmental goals, and similar issues (McCrudden, 1999). In this article the need to harmonise public procurement in the SADC in order to open up public procurement to regional competition, some of the obstacles preventing this, and possible solutions are discussed. Reference is made to international instruments such as the United Nations Commission on International Trade Law (UNCITRAL), the Model Law on Public Procurement and the GPA. In particular, the progress made in the Common Market for Eastern and Southern Africa (COMESA) with regard to the harmonisation of public procurement, which was based on the Model Law, will be used to suggest possible solutions to the problem of harmonising public procurement in the SADC.

Regulation and Competition Issues: Case Study of Indian Railways' Procurement

Public procurements, i.e., purchase of goods and services by various public departments, accounts for a significant proportion of both public expenditure and total demand for goods and services in the economy. Various studies, audit findings of the Comptroller and Auditor General of India, and vigilance reports by India's Central Vigilance Commission have invariably highlighted the incidence of anti-competitive practices in Indian public procurements. Public sector procurements are highly regulated, given the transparency concerns and principal–agent problem.These regulations outlining the rules and procedures in public procurement directly or indirectly influence the short- and long-run market dynamics (with respect to entry, market concentration, prices, innovation, etc.). This paper aims to analyse the impact of existing regulation on competition in public procurement in India through a case study of procurements in the Indian Railways. Based on the key anti-competitive concerns identified in Indian Railways’ procurements, the study outlines an important set of recommendations to enhance the degree of competition in public procurement in India.

Policy Diffusion in Public Procurement: The Role of Free Trade Agreements

Abstract This article assesses the factors shaping policy diffusion of effective, liberal public procurement regimes. Policy diffusion and the analysis of policy diffusion is less developed in public procurement than other policy areas such as investment. This is surprising given the potential economic (public procurement accounts for some 8% of GDP) and signaling (transparency, good governance) gains of adopting regimes that promote competition in public procurement markets. The article first provides an introduction to the issue of public procurement and discusses the nature of procurement regimes, the dependent variable. It then assesses the impact of key variables identified in the literature on policy diffusion, such as competition, coercion and norm emulation. It is argued that issue linkage in bilateral free trade agreements (FTA) appears to have brought about common laws – and in some cases – rules for procurement. But this stops short of a genuine diffusion of liberal procurement regimes due to negotiations being framed by reciprocity rather than efficiency considerations, the costs and complexity of implementation, as well as opposition from vested sector interests and politicians at all levels of government favoring the short term political utility of ‘buy local’ policies.