Efficiency Of Public Procurement Research Articles

ДОСЛІДЖЕННЯ РЕЗУЛЬТАТИВНОСТІ Й ЕФЕКТИВНОСТІ ПУБЛІЧНИХ ЗАКУПІВЕЛЬ В УКРАЇНІ

The effectiveness and efficiency of public procurement in Ukraine has been studied. It is emphasized that public procurement is a powerful tool for influencing the country's economic development, which makes it possible to form a sustainable and efficient economic system. It is emphasized that the conclusion of the contract itself does not certify the effectiveness of the purchase, for this it is necessary that the parties fully fulfill the terms of the concluded contract. It is noted that due to closed data in 2022, the real number of concluded contracts and their further legal fate (implementation or termination) is unknown. The state of war had a striking impact on the effectiveness of competitive procurement at the stage of contract execution. In 2022, almost twice as often as in 2021, the term of the contract was extended, which was caused by delays in financing customers, and disruption of supply chains, destruction of roads, delays at the border. fuel problems). The introduction of electronic procurement in Ukraine made it possible for small and medium-sized businesses to participate in tenders, which significantly increased competition between participants. The main achievement of the introduction of the electronic system is the saving of public funds. The effect of saving budget funds is calculated in the system as the difference between the expected value of the purchase and the actual value of the concluded contracts. Such an assessment does not fully show the effectiveness of procurement and can only be used for operational analysis. It is proposed to consider the economic efficiency of public procurement as a comprehensive indicator of efficiency at different levels of this system, as a synergistic result of the interaction of all institutions and mechanisms of this system. In practice, it is suggested to use a set of indicators that can be used for the purpose of a more detailed and qualitative assessment of purchases at different levels. Today, the indicator of saving budget funds differs due to the lack of a single method of analysis. The proposal on the need to develop and approve at the legislative level an analytical assessment of the effectiveness of budget funds, which could be used in the system, has been updated.

Analysing the efficiency of public procurement procedures using game-theory models

Subject. Public procurement plays an important role in providing public services and ensuring that the target programmes of government structures are implemented. Therefore, it is crucial to improve the efficiency of procurement procedures. The efficiency of public procurement is largely determined by the conditions and format of the procurement procedure. So, it is of particular interest to identify the factors influencing the customer’s choice of the optimal procedure for the procurement of different types of goods, as well as to assess the impact of these factors on the effectiveness of existing procedures.Objectives. The aim of the study was to develop a model for selecting procurement procedures for different types of goods and to assess the effectiveness of current public procurement procedures.Methodology. In the study, we used the findings of auction theory, qualitative and quantitative analysis techniques to identify public procurement, determine its value to participants, and assess its effectiveness. The following goods were selected for empirical assessment: paper, medicines, automotive components, and construction services. The empirical basis of the study was the data obtained from the Unified Information System (UIS) in Procurement website.Results. We developed and estimated a model for choosing a supplier selection procedure (for empirical assessment, the probability of choosing a certain procedure was determined by the number of uses of the procedures among completed procurement procedures). We also designed and estimated a model of price effectiveness for public procurement procedures that are actually in use (price effectiveness in this study means the final price of the contract, as well as the reduction of the final price against the initial maximum price).Conclusions. Based on the analysis, we concluded that it is necessary to introduce negotiations as an intermediate procedure between the auction and procurement from a single supplier. Such a procedure is used in other countries. The auction procedure fails to provide the best quality goods, especially in the case of complex goods or services with a high level of uncertainty. For simple goods, an auction is the most favoured procedure under the conditions of high competition and a preference for quality. It allows selecting the most experienced and financially reliable supplier.

International experience of public administration and control in the public procurement

Introduction. The regulation of public procurement has always attracted legislators around the world, because the global economy with its economic, legal and political relationships is closely intertwined with the micro-economies of each state. The paper summarizes the international experience of public administration and control in the public procurement and its adaptation in Ukraine in the context of globalization processes. The purpose of the paper is the generalization of modern concepts of state regulation and control of public procurement; adaptation of foreign experience in the efficiency of public procurement in Ukraine. Results. The experience of foreign countries shows the presence of two powerful groups of system control in different countries: two-channel and single-channel system control with courts of ordinary and specialized jurisdictions. Among the key factors inherent in the foreign control system are such as multi-channel, variability, regulation and preventive. Taking into account the EU Directives on system control and legal protection in terms of effective procurement allows maneuvering between public law and civil law, which disciplines actors of public procurement. The domestic system control in the field of public procurement lacks effective regulatory and methodological documents capable of preventing at a high level any manifestations of abuse of government power (the experience of Singapore and the UK). In particular, in terms of regulating the effectiveness of planning, conducting and monitoring the work of state control bodies over public procurement. The Ukrainian system of public procurement lacks such features as impartiality in tenders, high examination of procurement performance, and civil control by society. Along with financial, quantitative, and qualitative losses, political losses are also characteristic of Ukraine in terms of the deterioration of the investment climate in the country, the weakening of the country’s economic and financial system, violation of the principles of free competition, etc. Conclusion. It seems advisable to develop preventive scenarios for «tracking» the procurement system with calculation of the probability of abuse of power, that is, the «chance» on each channel: from the announcement of the tender to its completion. All this together will work like the British or Singaporean model of strengthening the political image of the country, preventing any manifestations of corruption in this area of activity. A necessary innovation seems to be a preventive-oriented and risk-oriented approach to government regulation and control in the public procurements.

Transparency and budget savings in public procurement: evidence from Thailand’s Infrastructure Transparency Initiative (CoST)

Purpose This study evaluates the effect of transparency measures on public procurement efficiency, focusing on Thailand’s Infrastructure Transparency Initiative (CoST). This study aims to understand its impact on the country’s public infrastructure procurement practices. Design/methodology/approach This paper analyses Thailand’s government construction procurement data, focusing on budgetary savings and CoST process participation. Budgetary savings are this study dependent variable, while the main intervention variable is the adoption of the CoST data disclosure standard. This study uses multiple linear regression, fixed-effects model and propensity score matching with the logit model for a comprehensive analysis. Findings This study shows that using the CoST data disclosure leads to notable budget savings in Thai public construction procurement. With CoST’s introduction, the savings rose by Baht 9.6m, and even with added controls, the savings remained significant at around Baht 3.3m. The savings consistently stay near 5% across different models. The propensity score matching method confirms these results, consistent with factors such as open bidding and agency categorisation. Research limitations/implications This study might not capture all benefits, especially non-financial ones. Thailand’s unique context and potential biases in data sources also need consideration. Practical implications CoST evidence backs Thailand’s procurement transparency. This study recommends broadening CoST, streamlining online platforms and promoting digital public engagement. Training stakeholders and partnering with state-owned enterprises and local agencies is vital to align with CoST and mitigate risks. Originality/value This study shows a clear link between transparency from information disclosure and budget efficiency in public procurement, using data from Thailand. It highlights the potential of transparency measures in developing countries.

The application of compliance in the assessment of efficiency of public procurement in Russia

The article accepts a challenge to create the well-developed assessment system of state and municipal procurement based on actual compliance mechanisms; analyzes the gaps in legislation in connection with the lack of the concept of “efficiency of the procurement system” and generally used performance criteria, and especially focuses on criteria related to the business reputation both of the customer and supplier. Business reputation is considered as s commonly understood as an intangible asset of the procurement subject, based on its proven reliability — in this regard, the author has identified four main performance criteria, one way or another revealing this concept. As a result, a VLRA (violations, leverage, rules, audit) assessment system based on the coefficient method, as well as risk matrices and an improved method for assessing their level, including not only material, but also reputational damage from violations of mandatory requirements, is proposed. The results of the study may be used as the basis for the development of a more detailed system for assessing the effectiveness of public procurement, as well as adapted to the specific conditions of the territories.

Efficiency Hypothesis Testing in an e-Procurement Implementation Assessment Model Framework: A Case Study of Bangladesh's Roads and Highways Division

In 2011, the e-Government Procurement (e-GP) guideline 2011 is adopted to start electronic procurement in public sector. However, since the e-GP system was first implemented, a great deal of investigations or analyses have not been conducted to determine how well its tender efficiency measured. This research aims to investigate the essential variables that contribute to the successful implementation of an electronic procurement system in Bangladesh. Another goal is to identify e-procurement implementation issues and build an efficient e-procurement implementation assessment model. Survey questionnaires were employed to collect data from eleven Roads and Highways Division (RHD) zones as a population. The study sample size of the bidders was 139. Hypothesis test has been done choosing MLR model of SPSS software. Efficiency was one of the eight hypothesis tests in the study. Findings proved that model was fit. The article helps readers comprehend the key elements that could affect the efficiency of public procurement. By attaining efficiency in public procurement, the study promises a significant contribution to saving public money.

Methodological support of the Estimated Efficiency of Public Procurement on a Contractual basis

The subject of the study is the problems of institutional and methodological-legal regulation of the contract system of public procurement.The relevance of the problem is due to the fact that there have been changes in the structure and composition of forms of contract activity as a result of the 2017 adoption of amendments to Law No. 44 in the dynamics of the distribution of order placement procedures.The purpose of the study is to develop a scientific methodology for calculating the effectiveness of procurement activities on the basis of a comprehensive assessment of the effectiveness of public procurement on a contractual basis, plan-fact analysis, and the implementation of the principles of compliance control in public procurement management.The paper uses methods of statistical and comparative analysis, generalization, classification and valuation. The paper shows that the present disadvantages of institutional regulation of procurement processes have a negative effect on their effectiveness, requiring improved oversight of public procurements as well as analytical and methodological support. The authors suggested that the principles of compliance-control of public procurement management be applied on a contractual basis in order to increase the level of credibility and legality of activities conducted in procurement. The author’s vision of the content of the methods of calculating the performance of procurement activities on the basis of a comprehensive evaluation of the effectiveness of public procurements on a contract basis is presented. For the collection of data for plan-fact analysis, their systematization for further calculation of performance indicators of public procurement on a contractual basis, a specialized form “Data Summary for Plan-Fact Analysis of Procurement” is proposed. If the procurement proposals presented in the study are implemented, they will increase the efficiency of the Russian public procurement contract system, the responsibility of participants in it, and the professional competence of officials.

Совершенствование методологии оценки экономической эффективности государственных закупок лекарственных средств

The study raises the issue of evaluating the effectiveness of public procurement, especially procurement of medicines. This topic is relevant, since a significant part of state funding is directed specifically to the healthcare system. In addition, the quality of organization of procurement activities affects the work of hospitals and polyclinics. In this regard, the improvement of the methodology for assessing the economic efficiency of public procurement, particularly procurement of medicines, is critically important. The paper presents the results of statistical analysis showing the need to develop a more comprehensive methodology that takes into account the volume of failed purchases in the context of efficiency assessment. The issue of "repeated" purchases was studied separately, since information about them would allow drawing conclusions about the existing patterns in tenders and the reasons for recognizing a purchase as failed. The methodological novelty is associated with the description of the approach to the formation of a sample for research and the algorithm for identifying "repeated" procurement procedures. All calculations are based on real data on procurement under the Federal Law No. 44-FZ for 2021–2022. The data was aggregated from the Unified Information System for Procurement. A statistical analysis of the scale of failed and repeated purchases in the context of regions, medicines and pharmacotherapeutic groups has been conducted. Based on the analysis, approximate estimates of hidden costs of the state budget related to re-organizing and re-conducting of trade procedures are given. The results of the work can be used for further scientific research in the field of public procurement efficiency, as well as to improve public policy in the field of procurement and provision of medicines.

E‐commerce sellers' ratings: Is user feedback adequate?

AbstractThe literature on the theory of public procurement points out two well‐known informational problems arising out of information asymmetry: (i) adverse selection and (ii) moral hazard. To reduce these issues and foster credibility and trust in the procurement process while maintaining quality and efficiency in public procurement, e‐procurement platforms have turned to reputation or rating systems. Therefore, the research and design of such rating systems are crucial. In this study, we discuss the theoretical underpinnings of procurement and employ the information‐theoretic, regression analysis, artificial neural network and principal component analysis (PCA) approaches to estimate the weights of the variables entering the rating system. Using real data from Government e‐Marketplace, a business‐to‐business public e‐commerce portal, we empirically determine the weights of the rating variables derived from the transaction‐level and user feedback data for sellers. The weights obtained from the PCA are the most applicable compared with the other three methods. We compare the old rating system with the newly proposed design using the Wilcoxon signed‐rank test. This results in a statistically significant difference between the two ratings. The canonical correlation and Wilks' trial reveal that the ratings derived from transaction‐level data and user feedback are uncorrelated to a great extent. Hence, considering only transaction‐level data or user feedback is unlikely to divulge sellers' intrinsic worth. E‐commerce platforms can use this approach to quickly implement methods to obtain rating scores on a real‐time basis for sellers on online platforms.

Совершенствование системы государственных закупок: формирование рейтинга подрядных организаций (на примере дорожной деятельности)

The existing methods of selecting a contractor for projects in the road sector in the Russian system of procurement do not fully take into account his business reputation and his previous experience, which negatively affects the efficiency of public procurement. Based on the analysis of international literature, it is proposed to assess the level of qualification of road builders by using a mathematical model of the complex indicator of their experience. The key idea of the proposed approach is to develop an integral indicator that characterizes the previous experience of contractors in performing a certain type of work. It is assumed that this indicator will be calculated automatically on the basis of data from the Unified Information System in Procurement. The proposed changes will improve the efficiency of the procurement system and ensure that contractors obtain the competencies necessary for high-quality and timely implementation of the relevant road works.

Internal audit effectiveness as a boon to public procurement performance: a multi mediation model

As part of Governments of Ghana efforts to deal with misappropriation of public sector resources, the Internal Audit Agency Act, 2003 (Act 658) was established to ensure probity, accountability, and transparency in the management of public sector resources, yet there is a high Corruption Perception Index in Ghana as asserted by the Transparent International 2021 release. To address this concern, our paper is aimed to develop a new model to explain the extent to which internal audit effectiveness (IAE) could be used to build strong organizational resilience as a mechanism through which efficiency in public procurement could be achieved while reducing public sector corruption incidence. Data have been collected from a cross-section of public sector workers. The structural equation modeling approach has been used to analyze the survey data. Our results have shown that cultural, and strategic resilience dimensions of organizational resilience significantly mediate the relationship between IAE and procurement performance. These results have implications for re-enforcement of audit regulations to ensure transparency in managing public sector resources with a focus on reducing negative public sector corruption perception.

Effects of supplier selection and supplier monitoring on public procurement efficiency in Tanzania: a cost-reduction perspective

Purpose This study aims to examine the role of supplier selection and supplier monitoring in public procurement efficiency in terms of cost reduction in Tanzania. Design/methodology/approach A structured questionnaire was used to collect cross-sectional survey data from 179 public procuring entities in Tanzania. Structural equation modelling (SEM) was used to analyse the collected data. Findings The findings revealed that supplier selection and supplier monitoring are positive and significant predictors of public procurement efficiency in terms of cost reduction. Research limitations/implications This study was conducted in Tanzanian public procurement contexts, so generalisations should be made with caution. Also, this study collected cross-sectional data; other studies may consider longitudinal data. Practical implications This study provides procurement practitioners with insights into selecting the proper suppliers and embracing supplier monitoring to achieve procurement efficiency in terms of cost reduction. Originality/value This study examines the effects of supplier selection and supplier monitoring on procurement cost reduction as a measure of public procurement efficiency in the Tanzanian context. Consequently, it provides empirical evidence of supplier management practices in the public procurement context.

REPUTATION IN PUBLIC PROCUREMENT: REGULATORY FEATURES, KEY INDICATORS AND PERFORMANCE EVALUATIONS

The article presents a literature review on reputation factor in public procurement. Reputation is one of the tools for solving the principal-agent problem, which is typical for contractual relations. In line with the spread of New Public Management theory in public procurement, alternative methods of supplier selection are being developed, in particular, based on suppliers’ reputation. In contrast to the private sector, public buyers’ ability to consider reputation when choosing a supplier is highly regulated. It is shown that in the world practice of public procurement the reputation of suppliers is considered to varying degrees, there is no single approach to indicators, mechanisms for providing information and procedural aspects. Therefore, it is timely to analyse the arguments for and against expanding the possibilities of reputational considerations in public procurement. To answer this question, a separate block focuses on the effects of reputational considerations in public procurement in terms of barriers to entry, public procurement efficiency, and building trust between procurers and suppliers. Conclusions about the positive effects of reputational considerations are of interest to procurers who decide on the choice of supplier evaluation criteria. Relevant aspects of reputational considerations for Russian regulation concerning reputation indicators and mechanisms for providing information are identified. The article differs from existing reviews on the topic of reputation by focusing on the specificity of public procurement. An original classification of sources is presented in accordance with the following parameters: definitions and indicators of reputation, possibilities and limitations of reputational considerations and their effects in public procurement. Poorly studied aspects of interest for further research are identified.

The Impact of Supplier Selection and Monitoring on the Effectiveness of Public Procurement in Ghana: Cost Reduction Point of View

The aim of this study is to examine the role of supplier selection and monitoring on the effectiveness of public procurement in terms of cost reduction in Ghana. Procurement effectiveness as an element of public performance management can contribute to achieving Value for Money by reducing administrative overhead costs and directing resources to support more complex procurement processes. Procurement adds value by reducing costs, without the compromise of quality, product failures, assuring the operational efficiency to enable better quality without any additional cost with an aim to achieve the best objectives, output at a reduced cost in the supply chain. This study provides procurement practitioners with insights into selecting the proper suppliers and embracing supplier monitoring to achieve procurement efficiency in terms of cost reduction. This study examines the effects of supplier selection and supplier monitoring on procurement cost reduction as a measure of public procurement efficiency in the Ghanaian context. Consequently, it provides empirical evidence of supplier management practices in the public procurement context. A structured questionnaire was used to collect cross-sectional survey data from 170 public procuring entities in Ghana. Structural equation modelling (SEM) was used to analyse the collected data.

Informal practices and efficiency in public procurement

IMPACT In environments with incentives for opportunism, effective tools to limit corruption in public procurement are necessary. The authors show that monitoring and law enforcement tools are more important than the strict regulation. A simple transfer of regulation from developed countries to transitional economies does not deliver the desired procurement performance without proper enforcement. Regulators need to consider the scale of opportunism among procurement participants—if it is high, it is necessary to focus on monitoring and law enforcement capabilities.

PUBLIC PROCUREMENT EFFICIENCY IN THE SLOVAK REPUBLIC: NUTS 3 LEVEL

At present, public procurement processes and their efficiency represent one of the key determinants of the public finance system. The article’s main aim is to identify the impact of the number of bids, type of contract, use of EU funds, e-auction, quality criteria and the presence of a subcontractor in achieving the public procurement savings with emphasis on NUTS 3 level in Slovakia. There were analysed 957 contracts during the period 2016 – 2020. Robust estimation, which uses the WLS method, was applied to quantify the impact of determinants of public procurement efficiency on a level of savings. The results confirmed that an increase in the number of bids also increases the level of savings by 5 percentage points. The savings are higher by 6.6 percentage points if the contract is not funded by EU funds in comparison to contracts funded by EU funds. Also, the savings are higher by 7.4 percentage points when e-auction was not used. Once, the contract does not allow the subcontractor relationships, the savings are higher by 11.6 percentage points. If the quality criterion is not applied in the contract, then the savings are higher by 10.7 percentage points. The analysis confirmed statistically significant differences between individual regions in Slovakia. The most significant difference is evident between the Košice Region and the Bratislava Region, while the Bratislava Region achieved savings higher by more than 20 percentage points. Similarly, the Prešov Region achieved higher savings by more than 19 percentage points compared to the Košice Region.

Electronic Signature as a Tool for Improving the Efficiency of Public Procurement

Electronic Signature as a Tool for Improving the Efficiency of Public Procurement

Efficient Public Procurement and The Role of Competition

The authors explain why accurate conclusions on public procurement efficiency are impossible in light of the current formal rules of the public contractual system. In regulatory acts, efficiency is replaced with saving and effectiveness - concepts that have different meaning and do not focus on the scale of transaction costs associated with contract conclusion and execution. Since assessing public procurement efficiency has no economic meaning outside the interests of particular actors, achieving the indicators specified in the Budget Code of the Russian Federation is not indicative of the desirable vector of development and result interpretation. In this case, control over efficient satisfaction of public needs is replaced with attaining the metrics (pseudo-objectives) and procedural compliance, which increases the regulator' influence. Multiple control parameters lead to adverse selection of the stuff of customer's contractual services and affect the quality of procured goods. Quasi- market competition based on directive buyer- seller interaction gives the appearance of fair transactions but does not stimulate efficiency or saving of public financial resources against transaction costs. Fair procedures designed to protect competitors from each other do not allow to build up trust-based interactions within the contractual system and engage supplier's reputation as well as establish long-term economic relations. To further develop the contractual system in Russia, would be useful to have a legal definition of public procurement efficiency and give the criteria for achieving it or rejecting procedural regulation.

Control measures of the effectiveness of procurement expenses of public sector organizations

This article discusses the general scheme of the functioning of the public procurement process in the Russian Federation with an emphasis on the analysis and verification of the effectiveness of spending money during procurement, provides justification for the need for this activity, the consequences of its implementation and some of the goals and objectives for which it is carried out, also identifies factors that increase the economic efficiency of public procurement. In addition, the article contains the definition of factors of competitive procurement in public sector organizations, quantitative indicators used in the analysis of optimal costs in the procurement procedure, the parameters of evaluation of existing market prices for the declared goods, works, or services in order to form the purchase price and indicate the terms of the contract.

Evaluation of Public Procurement Efficiency of the EU Countries Using Preference Learning TOPSIS Method

Evaluation of Public Procurement Efficiency of the EU Countries Using Preference Learning TOPSIS Method