Tag Archives:
Utilities

Public Procurement of Homogeneous Goods — Public Spend Matters Europe Post

This paper, presented at the IPPC Conference in Dublin this summer, looks at a range of 250 competitions held in the Czech Republic between 2008 and 2011 in the utilities (gas and electricity) markets, a spend category chosen because the product is relatively homogenous across different procurement exercises. The authors wanted to see if the number of firms competing for a particular contract had an impact on the final prices agreed and paid by the contracting authorities. To do this, they carried out a statistical analysis of the data to isolate number of bidders as a factor. The findings confirmed what we might have thought and expected as procurement professionals. The more bidders involved, which increases the competition, the lower the price.