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Comparison of efficiency of public procurement organized by public sector and local monopolies

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  • Jan Pavel

    (Department of Public Finance, University of Economics, Prague, W. Churchill Sq. 4, 130 67 Prague 3, Czech Republic)

Abstract

The aim of this paper is to identify the difference between the prices achieved in public procurement by public and private bodies. The analysis exploits the fact that European legislation forced to follow the Public Procurement Act not only public sector but also private companies working in the position of local monopolies (gas supply, water supply, public transport, etc.).The analysis is based on data from the Information System of Public Procurement in the Czech Republic. The data set is created by more than 500 observations containing information about the large construction contracts from the years 2006-2011. Details of these contracts were analysed using regressions. As a dependent variable were used price achieved (in the first model) and the number of bids (in second model). As explained variables were the numbers of bids (only in the first model), type of tender, the contract size, etc. The methodology is based on foreign papers, which are dealing with the issue of competitive effects.The results show that the public sector bodies obtain in their tenders on average more bids than private firms, but their realized prices are higher. Another finding is the influence of the type of procurement procedure. In the public sector are the best rates achieved with open procedures, while in the case of private entities was not identified the influence of procurement procedures.

Suggested Citation

  • Jan Pavel, 2013. "Comparison of efficiency of public procurement organized by public sector and local monopolies," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 61(7), pages 2611-2615.
    • Handle: RePEc:mup:actaun:actaun_2013061072611
    DOI: 10.11118/actaun201361072611
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    References listed on IDEAS

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    1. AndréS GóMez-Lobo & Stefan Szymanski, 2001. "A Law of Large Numbers: Bidding and Compulsory Competitive Tendering for Refuse Collection Contracts," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 18(1), pages 105-113, February.
    2. Paul H. Malatesta & Kathryn L. DeWenter, 2001. "State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity," American Economic Review, American Economic Association, vol. 91(1), pages 320-334, March.
    3. Foreman-Peck, James & Waterson, Michael, 1985. "The Comparative Efficiency of Public and Private Enterprise in Britain: Electricity Generation between the World Wars," Economic Journal, Royal Economic Society, vol. 95(380a), pages 83-95, Supplemen.
    4. Jan Pavel, 2010. "Analýza vlivu míry konkurence na cenu rozsáhlých staveb dopravní infrastruktury [The Analysis of the Relationship Between the Rate of Competition and the Prices of Large Transport Infrastructure Bu," Politická ekonomie, Prague University of Economics and Business, vol. 2010(3), pages 343-356.
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    Cited by:

    1. Jan Pavel, 2018. "Soukromé transakční náklady zadávání veřejných zakázek a faktory ovlivňující jejich výši [Private Transaction Costs of Procurement and Factors Affecting Their Value]," Politická ekonomie, Prague University of Economics and Business, vol. 2018(1), pages 20-34.

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