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This dissertation consists of three essays that examine how institutional and market factors affect the efficiency of public procurement systems. In the first chapter, I study the trade-off between rules and discretion in public procurement. Should a central government give broad authority to local agencies in the way they award public contracts? Or should it subject them to a strict set of uniform regulations? I study this question in the context of US federal procurement. I find that, at current levels, the benefits from waste prevention are modest relative to the size of compliance costs introduced by regulation. In the second chapter, co-authored with Mark Duggan (Stanford), we study the relationship between market structure and public procurement outcomes. In particular, we ask whether and to what extent consolidation-driven increases in industry concentration affect the way in which the government procures its goods and services. We focus on the defense industry, by far the largest contributor to federal procurement spending in the U.S. We find that increased market concentration caused the procurement process to become less competitive, induced a shift from the use of fixed-price contracts towards cost-plus contracts, but find no evidence that consolidation led to a significant increase in acquisition costs. In the third chapter, joint with Andres Gonzalez-Lira (UC Berkeley) and Michael S. Walker (US Department of Defense), we study the effects of increasing competition for public contracts through advertising. Publicizing contract opportunities promotes bidder participation, potentially leading to lower acquisition costs. Yet extensive advertising could also exacerbate the adverse selection of bidders on non-contractible quality dimensions. We study this trade-off in the context of procurement contracts for the U.S. Department of Defense. We find that publicized contracts opportunities increases competition and leads to a different pool of vendors, which on average offer lower prices. However, we also find that the post-award performance of publicized contracts worsens, resulting in more post-award cost overruns and delays. The latter effect is driven by goods and services that are relatively more complex, highlighting the role of contract incompleteness.
ÔThis volume is long overdue. Integrated legal and economic analysis of competition law is crucial given the nature of the sector. However to carry this off successfully, one either needs intensive editorial work to bring different teams together; or one has to rely on the few who master both economic and legal analysis to a tee. Stefan WeishaarÕs analysis not only looks at a stubborn issue in competition law. He does so in three jurisdictions, in detailed yet clear fashion, with clear insight and ditto conclusions. Over and above its relevance to academic analysis, this book can go straight into competition authoritiesÕ decision making, and therefore also in compliance and remediation advice.Õ Ð Geert Van Calster, University of Leuven, Belgium Cartels, Competition and Public Procurement uses a law and economics approach to analyse whether competition and public procurement laws in Europe and Asia deal effectively with bid rigging conspiracies. Stefan Weishaar explores the ways in which economic theory can be used to mitigate the adverse effects of bid rigging cartels. The study sheds light on one of the vital issues for achieving cost-effective public procurement Ð which is itself a critical question in the context of the global financial crisis. The book comprehensively examines whether different laws deal effectively with bid rigging and the ways in which economic theory can be used to mitigate the adverse effects of such cartels. The employed industrial economics and auction theory highlights shortcomings of the law in all three jurisdictions Ð the European Union, China and Japan Ð and seeks to raise the awareness of policymakers as to when extra precautionary measures against bid rigging conspiracies should be taken. Students and researchers who have a keen interest in the relationship between law and economics, competition law and public procurement law will find this topical book invaluable. Practitioners can see how economic theory can be used to identify situations that lend themselves to bid rigging and policymakers will be informed about the shortcomings of existing legislation from a legal and economics perspective and will be inspired by approaches taken in different jurisdictions.
Public procurement and competition law are both important fields of EU law and policy, intimately intertwined in the creation of the internal market. Hitherto their close connection has been noted, but not closely examined. This work is the most comprehensive attempt to date to explain the many ways in which these fields, often considered independent of one another, interact and overlap in the creation of the internal market. This process of convergence between competition and public procurement law is particularly apparent in the 2014 Directives on public procurement, which consolidate the principle of competition in terms very close to those advanced by the author in the first edition. This second edition builds upon this approach and continues to ask how competition law principles inform and condition public procurement rules, and whether the latter (in their revised form) are adequate to ensure that competition is not distorted. The second edition also deepens the analysis of the market behaviour of the public buyer from a competition perspective. Proceeding through a careful assessment of the general rules of competition and public procurement, the book constantly tests the efficacy of these rules against a standard of the proper functioning of undistorted competition in the market for public procurement. It also traces the increasing relevance of competition considerations in the case law of the Court of Justice of the European Union and sets out criteria and recommendations to continue influencing the development of EU Economic Law.
In many countries and sectors, public procurement is developing from a functional orientation to an effective socio-economic policy lever. There is a great interest among managers and academics to learn from other countries’ and other sectors’ change initiatives and how they dealt with the challenges they encountered. This text provides such learning opportunities, presenting case studies of public procurement, covering diverse nations, sectors and issues. The cases are combined with editorial commentary and contextualizing chapters to assist the student reader in understanding this complex topic. The text combines descriptions of cases of public procurement with cross case analysis to draw out the key dimensions to enable further examination of the central themes. Each case study concludes with three questions to aid its use as a teaching and training text. Edited by a team of internationally recognised experts in the field this innovative text illustrates the strategies and innovations within public procurement on a global scale and highlights common problems that all countries encounter. Public Procurement is vital reading for anyone with an interest in this topical area.
United States federal procurement constitutes 25% of government spending and 6% of Gross Domestic Product. This dissertation addresses three questions in public economics: Are there economically relevant spillovers from federal procurement spending into local labor markets (Chapter 1)? Can legislators influence the spatial distribution of federal procurement spending (Chapter 2)? Do voters respond to changes in federal procurement spending in their districts (Chapter 3)?
This book explores Public Procurement novelties and challenges in an interdisciplinary way. The process whereby the public sector awards contracts to companies for the supply of works, goods or services is a powerful instrument to ensure the achievement of new public goals as well as an efficient use of public funds. This book brings together the papers that have been presented during the "First Symposium on Public Procurement", a conference held in Rome last summer and to be repeated again yearly. As Public Procurement touches on many fields (law, economics, political science, engineering) the editors have used an interdisciplinary approach to discuss four main topics of interest which represent the four different parts in which this book is divided: Competitive dialogue and contractual design fostering innovation and need analysis, Separation of selection and award criteria, including exclusion of reputation indicators like references to experience, performance and CV’s from award criteria, Retendering a contract for breach of procurement rules or changes to contract (contract execution), Set-asides for small and medium firms, as in the USA system with the Small Business Act that reserves shares of tenders to SMEs only.
Since the 1990s, government at all levels is under increasing pressure to do more with less. However, despite the U.S. government spending about 15 to 20 percent of its GDP on contracts for goods and services, there is a paucity of reference books for public procurement officials and very few textbooks for courses on the subject. Filling this void, the International Handbook of Public Procurement provides the knowledge necessary to understand how procurement works and how to improve the cost-effectiveness of procurement systems. Taking a multidisciplinary approach, the book focuses on the managerial, economic, political, and legal aspects of this topic. It begins with a conceptual framework and highlights various reforms occurring in certain countries. By examining these improvements, readers are able to apply this knowledge to their own strategies. The next section presents selected cases that illustrate the public procurement process, examining systems in various nations including Germany, China, South Africa, Cambodia, Uganda, and Estonia. The book also discusses the rise of electronic procurement systems (E-procurement) and reviews the benefits of these efficient systems. Other topics presented in this comprehensive volume include practical discussions on contract negotiations, bidding, price strategies and cost analysis, and an insightful chapter on the market’s response to contract award announcements. A virtual encyclopedia from numerous international experts, this book was assembled by Khi V. Thai, Professor at Florida Atlantic University and Editor of the Journal of Public Procurement. Dr. Thai has provided technical assistance in the area of public procurement to governments across the world. Empowering those on all sides of the issue, this volume dispenses advice valuable to government officials and contractors, as well as providing a comprehensive text for public administration students.