Seminar in Public Economics - The One and Only: Single Bidding in Public Procurement
Time
Thursday, 8. July 2021
11:45 - 13:15
Location
online
Organizer
Speaker:
Vítezslav Titl (Utrecht University)
The One and Only: Single Bidding in Public Procurement
Abstract: About 23% of public procurement contracts in the European Union are awarded to the only firm that submitted a bid. The market of public procurement contracts is worth about one seventh of GDP in developed countries, which makes any inefficiencies on this market a first-order problem. In this paper, I exploit a reform from the Czech Republic that made it impossible to award contracts with only one bid. Using a difference-in-differences strategy, I first show that for the majority of these contracts, the reform pushed prices down by 10% relatively to the estimated costs. Second, I provide evidence that procuring authorities started to provide significantly longer description of procurement contracts and also a longer time span for firms to
prepare their bids. Last, I show that the prices of procurement contracts supplied by politically connected and anonymously owned firms did not decline after the reform.