of the value of funds for the benefit of the society. Despite the significant development in the procurementsystem over the last two decades, there are several main reasons why the national procurementsystem is not functioning properly (The World Bank, 2001) namely (1) overlapping regulations; (2) inadequate legal rules of procurement; (3) the absence of a single authorized institution to formulate government procurement policies, monitor their implementation, and ensure the sanctions and the mechanism of strict law enforcement; (4) weak compliance with applicable procurement rules and procedures and weak supervision and law enforcement; (5) limited competition in Indonesia due to the existing regulations; (6) inadequate capacity of the bidding work team and the authorized parties giving the approval and the lack of civil servant in the sector of procurement of goods/services and career ladder in the system of Civil Servant (PNS); (7) the lack of certification system for contractors and consultants; (8) unhealthy influence of various business associations in procurement; (9) practices of corruption, collusion, nepotism and other influences; (10) uneconomical contract packages due to the achievement of other objectives, the influence of various groups for other benefits in the practice of collusion; (11) inadequate advertising, particularly on contracts with small cost; and (12) the lack of follow-ups to various protests in the system against the protests in procurement and the lack of systematic monitoring of compliance with procurement regulations and procedures.
The theoretical analysis suggests that it is not possible to infer the …rm’s valuation from their bids in the average bid auction because they all bid the same constant regardless of their value. Moreover, the reduced form empirical analysis provides evidence supporting the fact that the …rst price auctions in my sample are not simple FP but FP plus monitoring. For this latter auction format our theory implies that low penalty bidders do not have an equilibrium strategy that gives them a strictly positive expected payo¤. None of the main theoretical predictions change if we assume that a bidder who is indi¤erent to participating or not participating chooses to stay out. However, making this assumption simpli…es our analysis because it implies that only high penalty bidders participate in FP plus monitoring auctions. Since these bidders never default in equilibrium, the only part of their strategy that we need in order to retrieve their valuation is their bid. The approach that I use to estimate the underlying bidders’valuation is based on the extension by Krasnokutskaya (2004) of the fundamental result of Guerre, Perrigne and Vuong (2000) (GPV from now on) that the …rst order condition of a bidder’s problem can be expressed in terms of observables. The approach proposed by Krasnokutskaya is based on statistical deconvolution and, in essence, allows one to recover from observed bids the underlying distributions of both the private and the commonly observed components of bidders’valuations. The …rst paper to propose the use of deconvolution was Li and Vuong (1998) in the context of a classical measurement error problem. The methodology was later applied to auctions by Li, Perrigne and Vuong (2000), Krasnokutskaya (2004) and Asker (2008). My application of deconvolution is very similar to that applied in these two latter papers.
• Success rates. To successfully complete competitive procurement, the contracting authority has to determine the technical description of a good and its expected value based on their budget and market analysis. It also has to prepare and publish tender documentation and answer questions of potential suppliers. Finally, after the auction, the contracting authority has to evaluate documents of the auction winner and sign a contract. Failure in each of these steps will lead to unsuccessful or cancelled procurement. There is no significant difference across administrative unit groups in terms of procurement success rate
In May 2006, the European Commission proposed improving the effectiveness of the remedies available to aggrieved firms where they believe there have been irregularities in the awarding of a publicprocurement contract, particularly at a stage where infringements may still be corrected. In particular, the purpose of the proposal is to oblige contracting authorities to observe a standstill period before proceeding to conclude a contract, following the announcement of an award, either via notification of the award decision in the case of formal award procedures, or by publication of a contract award notice in the case of awards without an invitation to tender. This standstill period concerns publicprocurement contracts. Appeals: Public works, supply and service contracts
for increasing transparency level and decrease corruption risks in the procurementsystem it is necessary to introduce e-auctions more widely. Such type of a competitive system of publicprocurement has to replace all other traditional types of procurement and to become the dominating one in the long term. one of the e-auction advantages is the possibilities of viewing of all procedures, beginning from the offer announcement on purchase up to the performance of contracts by suppliers. Meanwhile in practice, both customers and suppliers reluctantly go to publicprocurement through e-auction, keeping possibilities for noncompetitive procurement to come back to single source procurement or purchases from a unique source. thereby it creates opportunities for the existence of corruption in the field of procurement activity. In this connection e- auctions comprise an obstacle for aspirations to perform procurements in the form of “single source procurement” and they will reduce corruption risks. In the long term it
The auction to reduce the starting price is a competitive method of publicprocurement, with its pricing being the only criterion for selecting a bidder, while this provision does not eliminate the requirement to supply goods in accordance with established quality standards. The winner of the auction is the bidder who offered the lowest price for the goods on the terms stated in the announcement. The cost of the goods should not be less than five thousand times the minimum wage per contract, and publicprocurement at auction for budget customers should not exceed two thousand and five hundred minimum wages per contract. Also, the criteria for bidding, the announcement of the auction and its sale will be carried out under the Law on “PublicProcurement”.
In the presence of synergies across items or contracts, the effect upon revenues or cost when allowing bidders to submit combination bids has been assessed in a number of experiment studies (see Chernomaz and Levin, 2011 for a list of some previous experiments). However, relatively few studies have provided equilibrium bidding strategies in environments of heterogeneous multiple items. Krishna and Rosenthal (1996) show that a simultaneous auction outperforms a corresponding combinatorial auction when synergies are present in a sealed-bid second-price auction, with two objects and a single global bidder. The reason for this is that the global bidder engages in “overbidding”, i.e. bids above his/her value, facing the possibility of a loss ex post. A similar result is found in Kagel and Levin (2005), in which they derive and analyze bidding behaviour in a sealed-bid uniform price auction when synergies are present. They find that bidders with multi-unit demand have, for some intervals of values, an incentive to submit bids above their valuation. Chernomaz and Levin (2011) analyze a simple bidding
Chapter 3 analyses offline auctions held in ComprasNet. Offline auctions were common in the early days of ComprasNet, when the online bidding soft- ware was not fully developed. These offline auctions have a two-stage design. Two-stage designs such as this have long been proposed by the theoretical liter- ature, however there are virtually no empirical works analysing data from such designs apart from experimental studies. I first present a stylised model of bid- ding in a two-stage auction similar to that used by ComprasNet. I then explore bidding behaviour in offline auctions and confront the predictions of the model with the data. The model is currently unsatisfactory, as it fails to capture some key features of the data. I discuss possible modifications of the model in order to rationalise observed bidding behaviour. I then compare online and offline auc- tions in terms of their outcomes, taking advantage of a change in regulation that required purchasing units to use online auctions. This change introduces exogen- ous variation on the choice of the auction format, which can be used to identify the effects of auction rules on outcomes. I find that offline auctions attract sub- stantially fewer bidders than online auctions and that this results in higher pro- curement costs. The analysis however cannot disentangle the effects of auction rules from those of the way the auction is held (online vs. offline).
The power reform policy also mandated the power company to publish contact telephone numbers for Customer Care Centre Service Staff, Local Management and Headquarters Management, so that aggrieved customers who may be dissatisfied services due to corruption in the electric power industry in Nigeria could reach relevant staff members with their complaints, in addition to ensuring continuous improvement in customer service delivery through periodic reviews of customer service benchmarks. The policy, as well-crafted as it sounded, however, did not explain what the benchmarks for the reviews were, nor did it state whether the customers were entitled to participate in the reviews, providing a potential opportunity for corruption. The reality that emerged from the 2011 fieldwork was that there has been a failure to implement the policy of providing more customer service points to deal with the complaints of customers dissatisfied with quality of service and with service tariffs that did not reflect their electricity consumption. The PPC had still left its unsatisfied customers without any point of contact where they could ventilate their grievances.
good for the ﬁ nal consumer. State oﬃ cials representing the contracting authority may be subject to corruption and can select contracts that are disadvantageous for the ﬁ nal consumer. So parameters of publicprocurement can be more inﬂ uenced by other factors than market concentration in a given market. Second reason is connected with quality of the data from the information system of publicprocurement ISVZ. The data from this database has low quality, with lots of errors, missing data and inconsistent methodology of registering. Especially the inﬂ uence of missing data may mean a relatively large distortion of the results of the analysis from reality. The quality of the data illustrates another problem of publicprocurement in the Czech Republic, which is lack of transparency. The main improvement of this database would be adding the missing information and unifying the terminology used in the system ISVZ and the Publicprocurement law. Both possible reasons for the results of analysis, low transparency and corruption in public procurements in Czech Republic, is well documented by Oﬃ ce for the Protection of Competition (ÚOHS, 2011).
A recent survey of National Association of State Procurement Officials (NASPO, 2009) indicates that publicprocurement is growing in importance. Officials report that they are no longer “relegated to a tactical role of buying what the customer wanted” but rather now “often lead the strategic procurement planning process for major initiatives” (p. 1). All reported that the role of the state central procurement officer in strategic planning sessions with the governor on issues such as emergency planning, preference policies (e.g., small business preferences), and “green procurement” had increased during the past 5 years. Most reported increased use of cooperative purchasing (where two or more public entities combine procurement requirements for efficiency purposes) and strategic sourcing (which entails systematic analysis of requirements, suppliers, market, and environment as well as historical spend analysis; NASPO, pp. 5–8).
In general, procurement auctions (also known as reverse auctions) can be seen as an instrument to solve a problem of asymmetric information. In the models discussed in following three chapters, asymmetric information usually concerns the knowledge about production cost. For example, a buyer who wants to procure a product can choose from several suppliers whose production costs he does not know. His lack of knowledge is based upon the suppliers, who hold private information about their individual production costs. The retailer’s problem here is to find the best (which is in most cases the cheapest) supplier. The retailer now, instead of negotiating with every single supplier, conducts an auction, which determines a winner and a price that has to be paid for the product. Thus, procurement auctions reverse the traditional auction setting, in which buyers bid and sellers try to achieve a high price. In such a reverse auction the sellers have to compete against each other by submitting bids to earn the right to deliver a product or service. Here the buyer’s goal is generally to reduce the price in order to minimize the procurement cost (see e.g. Jap, 2002). It is therefore up to the sourcing company to design a mechanism that creates the highest value for itself. The relevant value does not necessarily result from the profit of the firm though, it can also result from a utility function or from a company seeking to maximize the system wide profits. Such a mechanism defines the game of asymmetric information and in general has three components: a set of possible messages (bids), an allocation rule and a payment rule. The allocation rule determines the probability that a bidder will win the contract and is dependent upon the bid he submits and the bids all the other bidders submit. The payment rule then determines the expected payment of a bidder as a function that depends again on his and all other submitted bids. In order to provide an equilibrium, these mechanism must fulfill the properties of incentive compatibility and truthful bidding (for further explanation, see e.g. Krishna, 2010).
The poorly prepared solicitation documents has several negative effects to procurement process, thus resulting to delays of delivery of the goods, works or services required. The negative effects include among others selection of unqualified contractor, supplier or service provider which in turn results to poor performance by failing to deliver the goods, works or service on time, at right cost, and quality prescribed. Also, delays and cost overrun of the procurement process may occur due to querries or addenda arising from ambigous specification, terms of reference, weak terms and conditions of the contract setforth in the bidding document or request for proposal for consultancy services. According to PPA(2004), the appropriate specifications, schedule of requirements and drawings submitted by users minimizes all the risks aforementioned. Also, adequately prepared bidding documents can minimize cancellation of tenders and lodging of complaints, hence contributing to effective procurement process.
Finally, we inspect whether tenure in office affects the identity of the auction manager. In testing this hypothesis, we follow a similar argument to Iyer and Mani (2012), who show that a change in the identity of Indian state politicians results in a significant increase in the probability of bureaucrat reassignments. In the Italian set-up, the turnover of local bureaucrats across different posts within the same municipality can be interpreted as a form of control from the mayors over the administration. This is especially the case if mayors want to have the power to assign bureaucrats to specific tasks, for example in order to favor local contractors. Bureaucrats, in turn, might care about the prestige and importance of the posts they are assigned to, or they can also benefit from getting close repeated interactions with local contractors (for example, to share part of the bribes). We test this hypothesis in the subsample of municipalities for which we have data on the identity of the managers (10,795 auctions for 1,789 mayors in the RD sample). Looking at Table 10, we find that the highest percentage of auctions managed by the same manager increases by about 19-21% (compared to an average of 60%) at each additional term in office, which highlights a possible channel through which mayors can exert direct control
6.1. Article 2.1.22 of Directive 24/2014 on publicprocurement deﬁnes innovation as “the implementation of a new or signiﬁcantly improved product, service or process, inclu- ding but not limited to production, building or construction processes, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations inter alia with the purpose of helping to solve societal challenges or to support the Europe 2020 strategy for smart, sustainable and inclusive growth...”. 6.2. Barcelona City Council will drive publicprocurement processes for innovation with the aim of promoting research and the development of ideas and new technologies that will assist its work for citizens when said ideas and technologies are not available in the market. 6.3. In general, when procuring works, goods and services, measures to strengthen in- novation will be included through the establishment of functional technical speciﬁca- tions, award criteria that promote improvements articulated as innovation proposals or any other measure which promotes innovation related to developing economic, social and environmental sustainability.
The technical specifications for contracts aimed at the general public and City Council staff shall include a compulsory clause which establishes that the contracting company must take into account the United Nations Convention on the Right of People with Disabilities, as well as universal accessibility and universal design, or design for everyone, criteria as defined in Royal Legislative Decree 1/2013, of 29 November, which approved the consolidated text of the General Act on the Rights of Persons with Functional Diversity and their Social Inclusion. Improvements in universal accessibility proposed by tendering companies that go beyond the legal obligations established in Catalan Act 13/2014, of 30 October, on Accessibility, may also be considered as an award criterion.
yok The changes in the length of procedures can therefore be contrasted with the issuing of certificates and the number of EU funded public procurements. When selecting the data, it was important to see quantitative figures on the issuing of certificates to see the volume of the work done by the DPPC and how many publicprocurement decisions might be affected by its activities, i.e. the issuing of certificates. The numbers of supportive and non-supportive decisions was also important since it is the latter which has a truly significant effect on the purchases, as in this case the procedure has to be abandoned or re-started. The distinction between the quality control certificates and regularity certificates was also important, since the former has more of a preventive nature in that a procedure containing some irregularity is stopped before it is launched (or before the tenders are evaluated). On the other hand the number of regularity certificates indicate the opinion of the DPPC on the whole conduct of the procedure. In the latter case errors are more difficult to be corrected. However, in order to see the link between the issuing of certificates and the changing of the behaviour of contracting authorities, the number of cases where there was a change in the process having an effect of regularizing the procedure (i.e. making the publicprocurement procedure lawful) was an important aspect of the analysis. The number of opinions on contract amendments was also collected in order to see the possible difficulties faced by public authorities after the tendering phase, in case they had to modify the concluded contract for some reason. Finally, to put the issuing of certificates into the wider context, data was used from the PublicProcurement Authority on the ratio of EU funded and nationally funded public procurements.
next stage, which was the selection of suppliers in the system. Later, the procurement officer would choose the supplier based on the selected registered code in the system. All the selected suppliers would then be invited to enter the procurement processes. At this stage, suppliers would be given time to provide all the necessary documentation needed by the agency. Usually it would take three to seven days before the invitation period ended. The successful supplier would be chosen based on the goods or services provided in addition to the exact specifications requested by the users. Once the supplier was selected, the procurement officer would send the proposal to the authorised personnel for approval. The procurement officer would generate the purchase requisition through the system and send it to the successful supplier. At the time of delivery of the goods, the supplier concerned would also include an invoice and delivery notes to the agency. The store keeper would verify the goods received and generate the goods receive notes (GRn) in the system. The payment process would proceed after all the reconciliation processes with the order were completed. In the traditional procurementsystem, the officer-in-charge has to manually search the catalogues for suppliers who provide the required products. The officer then needs to compare the prices offered by the suppliers and the delivery times that the suppliers can commit to. This is time-consuming and the process itself is very tedious. Past studies have found that the major problems that affect the selection of product concerned the price and delivery times (Egbu et al., 2003). Several responses that came from the interviewees concerning the procurement officials were in support of the findings in past studies.
Abstract: Universities play an important role among public institutions because they initiate huge purchasing and contracting activities and contribute to sustainable development through education, research, and day-to-day operations. Existing studies on green publicprocurement (GPP) practices at Spanish universities focus on products and services. For this study, a total of 316 procedures were collected and analysed from the calls for tenders made by Spanish public universities between 2016 and 2017. The environmental criteria involved in the tenders and their weights were classified by subsector, geographical scope, and project budget. The results of this study show the use of environmental criteria in the works tendered by Spanish public universities is low (19.2%) in comparison with the results of other studies. It is therefore necessary to encourage GPP practices in the contracting process to comply with the environmental policies that universities have defined as part of their institutional policies.