Public Procurement Market Research Articles

SME Participation Barriers in European Union Public Procurement Markets

SME Participation Barriers in European Union Public Procurement Markets

Zmiany umów w sprawie zamówień publicznych w świetle wyroku Trybunału Sprawiedliwości Unii Europejskiej z 7 grudnia 2023 r.

The article deals with a judgment that is important from the perspective of interpreting the public procurement law on contract modifications, namely, the judgment of the CJEU of 7 December 2023. The judgment draws attention to at least two incorrect practices. First, “unforeseeable” circumstances, the occurrence of which may justify a contract modification, are sometimes interpreted too broadly. Second, contract modifications that are not made “explicitly” (by an agreement or annex modifying the contract) are not treated as contract modifications within the meaning of the regulations. The conclusions resulting from the judgment are a relevant signal for the entire public procurement market, a signal whose identification by participants in the public procurement market is mandatory. The article takes a closer look at the motives of the CJEU, as well as the implications of the ruling for participants in the public procurement market and empirical research. According to the author’s research, the contract modification rationale for the occurrence of “unforeseeable” circumstances is often used as a justification for contract modification. However, research supports the thesis that there are numerous cases in which it may be questionable to apply the rationale allowing contract modification due to the occurrence of “unforeseeable” circumstances. The correct interpretation of the CJEU judgment in question is all the more important in view of the above (the author’s research) and in terms of the potential increase in the number of public contracts (associated with the use of European Funds). Modification of a contract covered by EU funding in a manner that is not in compliance with the law may result in a 25% adjustment of the funding received.

La compra eficiente en los territorios: un gran reto para el mercado de compra pública colombiano en un ambiente ampliamente regulado

The public procurement market is consolidated as the new paradigm to understand transactions between public authorities and the private sector to meet their needs. This makes the economic perspective of this discipline revolve around providing measures that seek the efficiency of the market. This text argues that such efficiency is achieved when the precise roles of the regulatory agent and the purchasing agent whose objectives are different but their harmonious collaboration is what generates the environment of commercial normality are identified and assigned; this position is explained through an analysis of the Colombian case with the risks to efficiency represented by a regulation directed exclusively from the central sector and an institutional measure is proposed to mitigate them.

Correction: Analyzing concentration in the Greek public procurement market: a network theory approach

Correction: Analyzing concentration in the Greek public procurement market: a network theory approach

Polityka zakupowa państwa jako cel zamówień publicznych

The article focuses on the role of state purchasing policy as the primary aim of public procurement in Poland, considering its key aspects and impact on various spheres of economic activity. It presents detailed analyses of strategic objectives, legal regulations, and implementation practices, demonstrating the complexity and significance of this process for the way the public procurement market functions. The main research objective of the article is to understand the role that state purchasing policy plays in shaping the structure of the public procurement market and its impact on the efficiency of public expenditure and the economic development of the country. Through the analysis of empirical data and observations gathered from various sectors of the economy, the article seeks to illustrate how effective purchasing policy can support market competitiveness, fostering innovation and entrepreneurship development. The article analyzes the state purchasing policy as a key goal of public procurement, and presents its impact on the economy, competitiveness and sustainable development, emphasizing the efficiency, transparency and innovation of procedures.However, the article not only highlights the positive aspects of purchasing policy but also identifies challenges associated with it. Among them are combating corruption, ensuring the transparency of processes, and promoting fair competition. The findings presented may serve as a valuable source of information for political decision-makers and practitioners involved in public procurement management, aiming to improve the Polish public procurement system in the context of changing economic and social trends on the international stage.

PARTICIPATION OF FOREIGN CONTRACTORS IN PUBLIC TENDERS BY PKP POLSKIE LINIE KOLEJOWE S.A. BETWEEN 2021 AND 2022

The participation of foreign contractors in public procurement is indicative of the openness of a given economic system to external competition. Operating networks that provide rail transportation services to public entities is subject to sector-specific regulations for public procurements. Construction works in the railway engineering segment represent lucrative contracts, and their outcomes hold strategic significance for society and the economy. PKP Polskie Linie Kolejowe S.A., the national operator of railway lines, is a key player in the sectoral public procurement market in Poland. Upon analysing the participation of foreign contractors in the above company’s tender proceedings, it becomes possible to identify the strategies utilised by economic entities from outside the public funds holder’s territory to apply for public procurement.

Procedures for Awarding Work Contracts in Europe

Choosing a contractor with the best competencies is particularly important, especially in construction contracts. Using data available on the opentender.eu platform, information for 2022 was compiled regarding the size of the public procurement market and the procedures used in public procurement for construction works in European countries. The most common procedure used under the European Union Directive for awarding work contracts, in most countries, is the open procedure. The largest share of this procedure, amounting to over 95% of all proceedings, is in the countries Croatia, Cyprus, Greece, Latvia, and Poland. On the other hand, there are countries where the procedures proposed in the Directive are used to a small extent. In order to distinguish groups of European Union countries characterized by a similar structure of public procurement for work, the joining (tree-clustering) algorithm was used. This will provide insights into the strategies of countries in this area. Knowledge of the advantages and disadvantages of the various procedures may improve the public procurement system.

Analyzing concentration in the Greek public procurement market: a network theory approach

This study uses network theory to analyze the structure and concentration of the Greek public procurement market, focusing on the relationships between Contracting Authorities (CAs) and Economic Operators (EOs) within different Common Procurement Vocabulary (CPV) groups. By examining degree distribution curves and identifying dominant economic operators, we gain valuable insights into market dynamics and competition in Greece. The findings reveal the presence of market concentration, where a few EOs receive a disproportionate share of contracts within certain CPV groups which suggests potential market dominance and lack of competition. In contrast, some CPV groups demonstrate a more balanced distribution of contracts among EOs, suggesting a healthier competitive environment. The analysis of degree distributions between sub-networks based on CPV groups indicates variations in market structures between sectors. These differences highlight the heterogeneity in the Greek public procurement market, as well as the need for sector-specific policy interventions. Given that the concentration of contract awards raises competition, fairness and transparency concerns, the implications of the findings are important for policymakers, regulators and stakeholders involved in the Greek public procurement market. While this study provides valuable information, limitations including variations in data availability and potential inaccuracies in recorded information exist. Future research should address these limitations and explore the effects of market concentration on CPV codes in greater depth. This study contributes to the public procurement literature and serves as a basis for further research and policy making in the Greek procurement sector.

Perceived ethical risks in public procurement in Hungary (2009–2021)

The conduct of participants in the public procurement market, their flexibility in terms of compliance with the rules and unlawful conduct cannot be studied only and exclusively within the framework of corruption research. This paper aims to present how market participants’ perceptions of unethical conduct have changed over 13 years. Our findings demonstrate that the market of public procurements should not be held uniformly responsible for cases of corruption in spending public money. The paper summarises the results of five surveys carried out between 2009 and 2021. Participants of the public procurement market reported that misconduct was a major issue in public procurement in Hungary over the entire reference period. Grievances were the most pronounced on the part of tenderers. In the assessment of market participants, the regulation performs moderately in curbing practices restricting competition. At the same time, they rated their own and other participants’ ethics medium at best in the whole reference period. Only contracting authorities reported some general improvement, in a single year (2021). There is a general market consensus that procurements of construction projects, services and high-value procurements are the most prone to corruption. In this respect, market participants perceived an improvement in 2021, at least in comparison to 2018. Respondents identified the highest risk of corruption in the planning, evaluation and performance stages. Based on our panel data regressions, the general level of ethics as perceived by market participants was stagnant, while corruption exposure followed an inverted U curve, peaking in 2018 and dropping between 2011 and 2009 levels in 2021. The reasons behind that slight improvement are clear. Digitalisation has made communication more traceable, and the controllability of the procedure has inspired optimism in market participants. In other words, transparency and accountability have a strong influence on the perceived level of ethics in public procurement.

Ocena wpływu inflacji na sytuację prawną wykonawców w zamówieniach publicznych

The rapid pace of price growth began to significantly affect the public procurement market as early as 2021, which is caused by the effects caused by the COVID-19 epidemic, and then by the Russian military aggression in Ukraine. Therefore, this article assesses the impact of inflation on the legal situation of contractors. The increase in inflation showed the weak features of legal norms regulating the issue of indexation of contractual remuneration in public procurement, and as a consequence, contributed to the initiation of changes in public procurement law, which in fact can be considered the only positive impact of inflation in the context of the issues discussed in the article. It is too early to be able to realistically assess the effects of inflation in the abovementioned scope, however, it is indicated that the assessment of the impact of inflation growth on the legal situation of contractors depends on the provisions contained in the contract for the award of a contract, shaping the rights of contractors to indexation of contractual remuneration.

Совершенствование методов мониторинга конкуренции на рынке госзакупок

The relevance of the study is due to the high share of expenditures on state and municipal procurement in the structure of Russia’s GDP, on the one hand, and the need to improve the quality of monitoring of competition parameters in the public procurement market, on the other hand. The information systems and service solutions currently available on the IT market provide such an opportunity, which, according to the author, is not sufficiently used in the public sector at present. The purpose of the study is to substantiate the modern methodology for monitoring competition in the public procurement market, relevant to the level of scientific and technological development of computing power and infrastructure. The scientific novelty lies in the formation of a system for qualitative assessment of competition in the procurement market, based on the analysis of previously unused sections of information, allowing industry regulators to quickly receive signals about the presence of cartels and other forms of violation of competition. The problem solved in the article is aimed at improving support for procurement regulatory bodies to make management decisions regarding the ongoing territorial and sectoral policies, taking into account their material, technical and personnel support. To achieve this task, the results of previous studies of teams with the participation of the author are generalized and aggregated into a single two-level methodology, presented in the form of scientific and methodological recommendations for implementation by authorities. At the first level, the methodology can be applied by regional authorized bodies in the field of procurement and does not require special software; it is based on the use of a competition map implemented in Excel (any tabular database can be used). Second-level methods are focused on use by large analytical centers and divisions, are based on high-level visualization, and clearly “highlight” market anomalies. The introduction of such a methodology will increase the awareness of authorities about the situation in the context of regions and industries, identify or predict the occurrence of various anomalies, and improve the quality of work in countering cartel agreements.

Restricting freedom of contract – the EU foreign subsidies regulation and its consequences for public procurement

PurposeThe purpose of this paper is to analyze the recently enacted Regulation (EU) 2022/2560 of the European Parliament and of the Council of December 14, 2022, on foreign subsidies distorting the internal market (foreign subsidies regulation [FSR]) and its repercussions on the European Union (EU) public procurement marketplace and corporations from third countries. The purpose of this paper is to analyze the geopolitical and economic backgrounds for the Regulation and its efficiency.Design/methodology/approachIn this study, the authors used doctrinal and analytical legal methodologies, meticulously examining pertinent EU law sources. The authors systematically collated and scrutinized applicable literature and legislative process materials to discern the essence and substance of the norms enshrined in the law. In this study, the authors also applied a socio-legal methodology when focusing on the economic and geopolitical context surrounding the adoption of the FSR. The contextual analysis traces the evolution of changes in international cooperation and recent political shifts.FindingsImplementing the FSR should pave the way for a more equitable competitive landscape within the EU public procurement market, bolstering EU values. However, its potential to prolong public procurement procedures and create uncertainties regarding their outcomes could pose challenges, possibly affecting the effectiveness of public procurement regulations. Only time will reveal the extent of the EU’s interventionist approach and how necessary adjustments must be made to align with market demands.Social implicationsThis study highlights socially relevant aspects of the implementation of EU policies – European New Green Deal and European Industrial Policy in the context of public procurement. The analysis contained in this study concerns issues directly related to meeting the collective needs of the citizens.Originality/valueTo the best of the authors’ knowledge, this study is the first in-depth analysis of the solutions contained in the FSR in terms of geopolitical and economic aspects. Furthermore, there have been no studies so far, which have analyzed the FSR in detail from the point of view of its effectiveness. The effectiveness concept contained in this study is the authors’ own solution.

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.

The role of the Global Fund to Fight AIDS, Tuberculosis and Malaria in the development of global health and its collaboration with China

The Global Fund to Fight AIDS, Tuberculosis and Malaria (The Global Fund) has become an increasingly active and influential organization in global health during the past two decades. It is now playing an increasingly important role in the prevention and control of major infectious diseases, international financing for health, public procurement market development across the world. The article outlines the basic architecture of the Global Fund, including its overall information, financing mechanism, operational models and key experiences accumulated. Based on previous cooperation, the article analyzes the importance of the long-term partnership between China and the Global Fund, and proposes policy suggestions to achieve more win-win outcomes in the near future.

The International Procurement Instrument (IPI): promoting a level playing field around the world

This article provides a summary of the latest trends and policy developments in the area of international public procurement, with a special focus on the recently adopted International Procurement Instrument by the European Union (EU). The EU public procurement market is one of the largest and most accessible in the world. However, many of the EU's major trading partners apply restrictive practices in their markets that discriminate against EU businesses. Faced with this asymmetry, the IPI allows the EU to advocate more effectively for open international public procurement markets.

Current challenges and prospects for the development of the Polish public procurement

The article aims to identify measures that should be taken to create an effective model of Polish public procurement. The study addresses the impact of the COVID-19 pandemic, the war in Ukraine, and the European Union policies on climate change and technological developments, including aspects of the Fourth Industrial Revolution, on the Polish public procurement market. A dogmatic method is adopted. The current challenges and prospects of the Polish public procurement market are analysed from the perspective of the Public Procurement Law of 11 September 2019, which came into force on 1 January 2021. The study shows that the effective model of public procurement should be based, first and foremost, on increasing dialogue between the public and private sectors, increasing the implementation of so-called strategic procurement, and creating conditions for supporting the principle of competitiveness.

The EU Model of Socially Responsible Public Procurement

Purpose: The object of this paper is an overview of the European Model of Socially Responsible Public Procurement for the purpose of knowing the civil servants involved in the public contracts and the prospective contractors about them. Public buyers spend more than 16% of the EU’ GDP. By using the Public Procurement effectively by contracting authorities, one can have positive social impact (such as the reduction of criminal rate because of the employment of ex-offenders or immigrants) and contribute to sustainable development. Socially Responsible Public Procurement, in other words, take into account social considerations in public contracts in order to achieve positive social outcomes through the purchasing power of the Public Sector.
 Methodology: Concise review of the most important Articles of Directive 2014/24/EU related to Socially Responsible Public Procurement in the European Union will be made.
 Findings: Presentation of the most important articles of Directive 2014/24/EU on Socially Responsible Public Procurement
 Unique Contribution to Theory Practice and Policy: For the first time, stakeholders in Socially Responsible Public Procurement will have a comprehensive overview of the institutional framework in place in the European Union to be able to develop relevant public policies (employment, social policy, etc.). This work hopes to become a reference point for both Social Economy Operators and Contracting Authorities, both to facilitate the access of the former to the EU public procurement market and to provide a basis for the development of initiatives to further improve this institutional framework.

Explaining the development policy implementation gap: A case of a failed food sovereignty policy in Bolivia

The food sovereignty concept has gained prominence in public policy discourses in the global South during the last decades. However, food sovereignty has contested definitions and is interpreted differently by conflicting societal interests. Consequentially, the translation of food sovereignty concepts into concrete policies and practices is often characterized by conflicts and controversies rooted in different institutional logics guiding the involved actors. In this article, we analyse how the logics of the corporatized agro-food system affected the local implementation of top-down state-induced public food sovereignty-based policies in Bolivia. We conducted a multiple-case study of public food procurement markets for school feeding programs involving three rural municipalities and small-scale producers in the Altiplano region. The data consists of 53 interviews conducted during 2011–2015. We found that corporate food regime logics influence the local policy implementation process in three ways. First, by framing the chosen policy design as neoliberal individualistic and transaction-based market-orientated. Second, by envisioning for the Aymara subsistence peasants a socially and culturally undesirable identity and class transformation; and thirdly, indirectly through the dependency of the school feed program on adjacent field-level institutions shaped by the corporate food regime logics. We conclude that the corporate food regime logics shaped the notion of what was considered legitimate practices and processes required for smallholders to access the public food procurement market, whereas their own conceptions aligned with food sovereignty principles were disregarded.

Management of foreign economic relations of countries of the Commonwealth of Independent States in the implementation of different-level and different-speed integration

Subject. The article addresses the transformation of international economic relations. Objectives. The aim is to analyze international trade indicators for the countries of the Commonwealth of Independent States (the CIS), identify priority areas of their long-term cooperation. Methods. The study employs the historical-logical method and the method of scientific abstraction. Results. The paper establishes that trade and economic relations within the framework of the Commonwealth of Independent States are unstable. The share of the Commonwealth of Independent States in world exports in 2021 did not exceed 3%. Conclusions. The key areas of economic cooperation between the CIS countries include the creation of a common commodity exchange, liberalization of mutual access to the public procurement market, maximum strengthening of production and technological cooperation, development of digital trade.

Competitive conditions in the public procurement markets: an investigation with network analysis

The aim of this paper is to use network analysis as a monitoring tool for the competitive conditions and the behavior of the contracting authorities and companies in the public procurement market. The proposed method examines the market using network entropy and conditional network entropy, along with each agent's metrics. Network entropy offers information about the market conditions for the authorities and companies’ groups. The conditional network entropy measures the distribution of contracts across sellers or buyers for each group. The findings are signals of possible dominant positions and preferential treatment. In the second stage, the agency uses the agents’ degrees and entropies, unweighted and weighted, to inspect for possible preferential treatment or market dominance by specific agents. We applied the method in the pacemakers’ public procurement market using data from 33 countries from the period 2009–2019. The findings indicated that even though the network entropy and the conditional network entropy indicated that the market operated competitively, the examination of the companies’ degree centrality reveals the presence of at least one dominant company.