{"title":"The Effect of Female Leadership on Contracting from Capitol Hill to Main Street","authors":"Jonathan Brogaard, N. Gerasimova, M. Rohrer","doi":"10.2139/ssrn.3624880","DOIUrl":"https://doi.org/10.2139/ssrn.3624880","url":null,"abstract":"This paper provides novel evidence that female politicians increase the proportion of US government procurement contracts allocated to women-owned firms. The identification strategy uses close elections for the US House of Representatives. The effect concentrates in local contractors and persists after the female’s politician departure. The more gender-balanced representation in government contracting does not seem to be associated with economic costs, as the firm characteristics of the average contractor and contract performances are unchanged. By analyzing congressional requests from legislators to federal agencies, we show that female politicians affect procurement contract allocation through individual oversight.","PeriodicalId":330590,"journal":{"name":"ERN: Procurement (Topic)","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114936480","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Lessons from Operation Car Wash","authors":"Alison Jones, Caio Mario da Silva Pereira Neto","doi":"10.2139/ssrn.3875477","DOIUrl":"https://doi.org/10.2139/ssrn.3875477","url":null,"abstract":"This paper examines the question of how a nation can combat corruption and collusion and prevent these practices from plaguing and undermining public procurement processes. This matter is especially important to Brazil where Operation Car Wash (Operação Lava Jato) exposed widespread corruption and collusion affecting public procurement.<br><br>Although focusing on Brazil, this paper reflects an academic and policy debate as to how a nation can escape from a “high-corruption” equilibrium, especially one strengthened by its interaction with supplier collusion. In particular, whether endemic corruption can be combatted through an invigorated law enforcement push accompanied by strategies of incremental change, or whether some “big bang” approach, with complete institutional overhaul, is required to establish a new equilibrium.<br><br>The paper notes that the Brazilian experience provides support for the hypothesis that where corruption is endemic, better laws, and law enforcement, may be insufficient on their own to break a cycle and to remove the incentives and opportunities for corruption and collusion that exist. It also recognises, however, that, for many jurisdictions, wholesale big bang reform is unlikely to be feasible. It thus proposes a multipronged, and self-reinforcing, set of reforms to trigger change, concentrated on weaknesses diagnosed in the system. In particular, it suggests that where corruption affects public procurement, beyond specific adjustments to procurement, competition and anti-corruption laws, procurers, anti-corruption and competition enforcement agencies need to work closely together to coordinate policies and achieve synergies, and to combat incentives and opportunities for corruption and collusion within procurement processes. Such reforms must be combined with measures to tackle broader factors contributing to systemic corruption. Although inspired by the Brazilian case study, the diagnosis and proposed reform strategy provides a workable model for use in other jurisdictions.<br>","PeriodicalId":330590,"journal":{"name":"ERN: Procurement (Topic)","volume":"397 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131880426","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Deterministic Application of Process-centric Law to the System-centric Requirements of Procurement Procedures","authors":"David L. Wickens","doi":"10.17159/1727-3781/2021/V24I0A4549","DOIUrl":"https://doi.org/10.17159/1727-3781/2021/V24I0A4549","url":null,"abstract":"South Africa's public procurement system is accorded constitutional status, establishing fundamental requirements for the operation of the system. The application of these constitutional system requirements and their interpretation in the judicial adjudication of procurement cases have highlighted the tension between the administrative, or process-centric, legal requirements and the system-centric nature of procurement procedures. The importance of a deterministic approach for procurement decision-making can be considered from two angles – the certainty of the procurer in the conformity of its own conduct and external certainty to diminish the risk of unnecessary challenge. \u0000This article revisits the foundational rationale for system-based procurement procedures and associated decision-making for its potential for finding a deterministic approach to balancing the legal requirements, both system- and process-based. These principles are tested against a selection of adjudicated outcomes to formulate practical recommendations for practitioners aimed at deterministic decision-making in the procurement process.","PeriodicalId":330590,"journal":{"name":"ERN: Procurement (Topic)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114629062","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Competitive Procurement with Ex Post Moral Hazard","authors":"Indranil Chakraborty, Fahad Khalil, J. Lawarree","doi":"10.1111/1756-2171.12366","DOIUrl":"https://doi.org/10.1111/1756-2171.12366","url":null,"abstract":"Unlike standard auctions, we show that competitive procurement may optimally limit competition or use inefficient allocation rules that award the project to a less efficient firm with positive probability. Procurement projects often involve ex post moral hazard after the competitive process is over. A procurement mechanism must combine an incentive scheme with the auction to guard against firms bidding low to win the contract and then cutting back on effort. While competition helps reduce the rent of efficient firms, it exacerbates the problem due to moral hazard. If allocative efficiency is a requirement, limiting the number of participants may be optimal. Alternatively, the same incentives can be optimally provided using inefficient allocation rules.","PeriodicalId":330590,"journal":{"name":"ERN: Procurement (Topic)","volume":"110 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116195681","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Contracting Authorities and Strategic Goals of Public Procurement – A Relationship Defined by Discretion?","authors":"Marta Andhov","doi":"10.5040/9781509919512.ch-006","DOIUrl":"https://doi.org/10.5040/9781509919512.ch-006","url":null,"abstract":"This chapter introduces the concept of strategic public procurement, analyses EU competence in regulating strategic public procurement, investigates the scope of the discretion entrusted to the contracting authorities in the area of strategic public procurement. Section V discusses the limits of this discretion, focusing especially on Article 18(2) of Directive 2024/14/EU, which obliges Member States to ensure compliance with environmental, social and labour laws in the implementation of public contracts. Section VI concludes the chapter.","PeriodicalId":330590,"journal":{"name":"ERN: Procurement (Topic)","volume":"60 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116426243","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Financing a Quality-uncertain Supplier under Procurement Decentralization","authors":"Zhiping Lin, Di Xu, R. Shi, G. Cai","doi":"10.2139/ssrn.3714217","DOIUrl":"https://doi.org/10.2139/ssrn.3714217","url":null,"abstract":"Problem definition: This article investigates the optimal combination of financing schemes (bank finance versus buyer finance) and outsourcing structures (consignment versus turnkey) in a three-tier supply chain composed of a capital-constrained quality-uncertain component supplier (SP), a contract manufacturer (CM), and an original equipment manufacturer (OEM).<br><br>Academic/Practical relevance: In outsourcing practice, the OEM must decide on whether to procure components directly from the SP (i.e., consignment) or decentralize the component procurement to the CM (i.e., turnkey). However, no paper has yet studied firms’ preferences of all these four combinations of financing schemes and outsourcing structures.<br><br>Methodology: To address the above concern, we apply a Stackelberg game setting to characterize the equilibrium product quality, contract prices, interest rates, and firms’ profits.<br><br>Results: Our analysis reveals that buyer finance can conditionally outperform bank finance under both consignment and turnkey; however, the benefit of buyer finance is more significantly undercut by the procurement decentralization. Furthermore, the capital-constrained SP may encounter a collateral dilemma under turnkey, in which the SP suffers from possessing a higher asset value. Notwithstanding, firms can benefit from procurement decentralization in both bank finance and buyer finance when the CM’s capital cost is low enough. Such benefit is more significant in bank finance; thus, it is more likely for the OEM to select turnkey over consignment in bank finance than in buyer finance, but at the expense of other firms.<br><br>Managerial implications: This study provides some guidelines for OEMs when making their outsourcing and financing decisions. Managers should be aware of that financing schemes and outsourcing structures are not independent of each other, and procurement decentralization should be implemented with consideration of firms’ financial and operational interaction.","PeriodicalId":330590,"journal":{"name":"ERN: Procurement (Topic)","volume":"88 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122711980","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Is It A Bird? Is It A Plane? Or Is It Simply Public Procurement Gone Kaput? Some Contracting Insights on Pune’s Hyperloop Project (India)","authors":"Sandeep Verma","doi":"10.2139/ssrn.3692648","DOIUrl":"https://doi.org/10.2139/ssrn.3692648","url":null,"abstract":"This working draft of a law & policy paper has been especially written as background reading material for a forthcoming session on public procurement reforms during in-service training of mid-career senior civil servants at LBSNAA, Mussoorie; with the simultaneous aim of submission to the 9th International Public Procurement Conference at Argentina in August 2020—the latter now stands postponed to April 2021 on account of the ongoing COVID-19 pandemic. The paper looks at certain procurement aspects of the Pune Mumbai Hyperloop project, especially since it relied upon the \"Swiss Challenge\" variant of the \"Unsolicited Proposals\" method of procurement; and then develops its findings within the research context advanced earlier by Prof. Soreide and Prof Guasch on integrity in large public projects and PPP renegotiation/ award respectively.","PeriodicalId":330590,"journal":{"name":"ERN: Procurement (Topic)","volume":"160 1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124936348","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Introducción. Importancia y repercusión del contrato menor (Introduction. The Importance and Repercussion of Small Procurement Contracts)","authors":"Manuel Peláez Muras","doi":"10.2139/ssrn.3618961","DOIUrl":"https://doi.org/10.2139/ssrn.3618961","url":null,"abstract":"<b>Spanish Abstract:</b>El contrato menor arrastra muy mala fama. Seguramente desde siempre, como toda decisión discrecional de adjudicación de recursos limitados, pero en los últimos años ha recibido una atención mediática y doctrinal creciente, generalmente en sentido crítico y muy negativo, espoleada por los escándalos de corrupción en los que se ha hecho un uso irregular de esta figura. Se han dictado normas e instrucciones para regularlo y se ha ido arrinconando como un contrato sospechoso, que se califica de «excepcional» e incluso incompatible con los principios generales del derecho europeo de los contratos públicos.<br><br>Pero, ¿es de verdad excepcional el contrato menor? En este trabajo trato de responder a esa pregunta, concluyendo que no, a partir del análisis de la normativa española y de los países de nuestro entorno, en el que el menor español no es una rara avis ni mucho menos, y de ciertos condicionantes económicos, en los que la doctrina dominante no suele reparar, que hacen que los principios de la contratación se comporten de manera diferente en los contratos de pequeño importe.<br><br>Expuesta la lógica económica del contrato menor, concluyo con algunas propuestas de mejora e “higienización” del contrato menor y de la contratación pública en general, que deben venir de la gestión más que del derecho.<br><br><b>English Abstract:</b> Small public contracts (‘contratos menores’ in Spain, which are often the result of a direct award) have a very bad reputation. Surely it has been so always, as arguably happens with any discretionary allocation of limited resources. However, in the recent years ‘contratos menores’ have received increasing media and scholarly attention, generally in critical and very negative terms, prompted by corruption scandals in which a bad use of this procurement tool has been made. Legal rules and orders have been issued to regulate small contracts, which have been seen as a suspicious kind of contract, described as “exceptional\" or even incompatible with the general principles of the European public procurement law.<br><br>But are small contracts really exceptional? In this work I attempt to answer this question. I conclude that they are not. conclusion is negative, relying on the analysis of the regulation in Spain and other countries around us, among which the Spanish ‘contrato menor’ is far from being a rare bird, as well as on certain economic factors largely disregarded by the streamline academia, which make the procurement principles function in a different way with respect to low-value contracts.<br><br>Once the economic rationale of small contracts is shown, the work is finished with a number of proposals for the improvement and \"sanitation\" of small contracts and public procurement in general, which require better management rather than more or different regulations.","PeriodicalId":330590,"journal":{"name":"ERN: Procurement (Topic)","volume":"60 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114793443","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Aqrar Tədarük və Təchizat Açıq Səhmdar Cəmiyyəti (Azərbaycan) və Beynəlxalq Təcrübə ilə Müqayisələr (Agro Procurement and Supply Open Joint Stock Company (Azerbaijan) and Comparisons with The International Practices)","authors":"İbrahim Niftiyev","doi":"10.2139/ssrn.3628278","DOIUrl":"https://doi.org/10.2139/ssrn.3628278","url":null,"abstract":"<b>Azerbaijani abstract:</b> Kənd təsərrüfatı və aqrar sahələrin milli iqtisadiyyata inteqrasiya olunmasında və səmərəliliyinin artırılmasında dövlətin yüksək rolu dünya ölkələri arasında kifayət qədər müşahidə olunan təcrübədir. Lakin inhisar yaradan dövlət qurumlarının milli iqtisadiyyata olan təsiri tətbiq olunan strategiyalar, institusional amillər, idarəetmə və bazar mexanizmlərinə təsir nöqteyi-nəzərdən heç də birmənalı xarakter daşımır. Cari tədqiqat Azərbaycanda yeni yaradılan Aqrar Tədarük və Təchizat (ATT) ASC-nin iqtisadiyyata cari və potensial təsirlərini beynəlxalq təcrübə ilə müqayisə edir. Müqayisə üçün Çin Xalq Respublikası (ÇXR), Tayland və Yaponiya kimi ölkələrin kənd təsərrüfatı sektorunda qəbul etdiyi inhisarlaşma və təşkilati-bürokratik təcrübə istifadə olunub. Tədqiqatın əsas metodu kimi kənd təsərrüfatı və aqrar fəaliyyətlərin ölkə iqtisadiyyatında konkret üsul və vasitələrlə inteqrasiyasını təmin edən ÇXR, Tayland və Yaponiya kimi ölkələrin istifadə etdiyi konseptual yanaşma və institusional mexanizmlər nəzərdən keçirilir. Ümumi nəticələr ondan ibarətdir ki, Azərbaycanda ATT ASC-nin timsalında tətbiq olunan layihələr və tədbirlər planı milli iqtisadiyyatlarda şaquli inteqrasiyanı hədəfləyən formada deyil. Halbuki, özünü doğruldan təcrübələr əsasən bazar mexanizmlərini stimullaşdıran, fermer və kiçik sahibkarları dəstəkləyən, rəqabət mühiti yaradan, özəl sektor və dövlət ilə maraqların münaqişəsini azaldan institusional tədbirləri icra edən və markalşmanı mikro səviyyədə aparan yanaşma və tədbirlər planını əhatə edir. <br><br><b>English abstract:</b> The significant role of the state in the integration of agriculture and agrarian sectors into the national economy and constant endeavor to increase their efficiency is a well-observed experience among the countries of the world. However, the impact of monopolies on the national economy is far from unambiguous in terms of the impact of the strategies, institutional factors, governance, and market mechanisms applied. The current study compares the prevailing and potential impacts of the newly established Agro Procurement and Supply (APS) OJSC on the economy with international experience. For comparison, the monopolies and organizational-bureaucratic practices adopted by the People's Republic of China (PRC), Thailand, and Japan in the agricultural sector were used. The primary research method considers the conceptual approach and institutional mechanisms used by countries such as China, Thailand, and Japan, which ensure the integration of agricultural and agrarian activities in the country's economy by specific methods and means. The overall result is that the project and an action plan implemented in Azerbaijan on the example of APS OJSC are not in the form of targeting vertical integration in the national economy. However, proven practices around the case countries studies on this research mainly involve approaches and action plans that stimulate market mechanisms, support farm","PeriodicalId":330590,"journal":{"name":"ERN: Procurement (Topic)","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132940278","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Mechanism Design for Managing Hidden Rebates and Inflated Quotes of a Procurement Service Provider","authors":"Xiaoshuai Fan, Ying‐ju Chen, Christopher S. Tang","doi":"10.2139/ssrn.3514358","DOIUrl":"https://doi.org/10.2139/ssrn.3514358","url":null,"abstract":"Problem definition: When sourcing through a procurement service provider (PSP), the PSP often collects rebates from unethical manufacturers in developing countries (as referral fees) that are “hidden” from the retailers. Recognizing that a PSP has a strong incentive to solicit quotes from unethical manufacturers, we examine a situation in which the retailer insists on soliciting a quote from a manufacturer designated by the retailer and a separate quote from an unethical manufacturer selected by the PSP. However, when the designated manufacturer is ethical, the PSP has an incentive to inflate the quote from this ethical manufacturer in order to help the unethical manufacturer to win. Facing this situation, is there a mechanism for the retailer to control hidden rebates? Academic/practical relevance: The issue of hidden rebates is a “known secret” in global supply chain practice. Also, hidden rebates increase the customs duty for U.S. importers because of the first sales rule for customs valuation of U.S. imports. Therefore, there is a need to understand the implications of hidden rebates and to control this unethical practice. Methodology: To circumvent the issue of hidden rebates and quote inflations, we develop a deterministic, incentive-compatible mechanism that is based on a simple selection rule (for selecting a manufacturer) and a contingent service fee (as a reward for the service provided by the PSP). Results: Our optimal mechanism creates incentives to (1) deter the PSP from inflating the quote submitted from the ethical manufacturer, (2) reduce the incidence of hidden rebates, and (3) reduce the retailer’s procurement cost and the corresponding import tax significantly. More importantly, relative to the “lowest quote wins” selection rule, the optimal mechanism is Pareto-improving for the retailer and the service provider when the hidden rebate is below a certain threshold. Furthermore, we extend our analysis to the case in which (1) the retailer is not sure whether the designated manufacturer is ethical or not, (2) the retailer does not know the exact value of hidden rebate (but it follows a two-point distribution), and (3) the retailer may verify the quote with its designated manufacturer before a formal contract. We also explore the stochastic incentive-compatible mechanism for the cases in which the penalty is unenforceable or enforceable. Managerial implications: When law enforcement is inconsistent in developing countries, retailers should beware of the existence and implications of hidden rebates. We provide a simple mechanism that a retailer can consider as a practical way to deter the PSP from inflating certain quotes and put hidden rebates under control.","PeriodicalId":330590,"journal":{"name":"ERN: Procurement (Topic)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134199527","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}