Awarding Procedures for Public works. An Empirical Analysis on Italian Data

This study sheds additional light on the relationship between public work complexity and the choice between different public procurement procedures. In particular, the analysis examines in detail the role of project complexity as one of the main determinants in the choice between auction and negotiation. The analysis is based on a dataset provided by the Italian Authority for the Surveillance of Public Procurement (avcp) which contains detailed information on each public work procurement contract tendered by Italian municipalities over the period 2007 and 2012. The dataset is extended by adding information on the political structure of municipalities and social capital endowment at local level; moreover information on important legislative interventions occurred over the sample period have been included. The study analyzes which factors affect the probability of choosing negotiation as awarding procedure; among those factors it includes an ad-hoc measure of complexity built by surveying technicians, with experiences in public works, employed in public or private sectors (municipalities public servants/managers, public servants/managers employed in the avcp and engineers and architects from the private sector). Main results suggest that more complex projects are more likely to be awarded by negotiated procedures. In particular, estimates suggest that an increase in work complexity from the 25th to the 75th of its distribution induces an increase in the probability of choosing negotiation of about 5 per cent. Over all, empirical findings are robust to the inclusion of several control variables related to various political characteristics and social capital endowments of municipalities.