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TILEC Work in Progress: Gyula Seres

Bid Rejection and Litigation in Public Procurement: Evidence from Poland
10:45-11:45, T 50A

Public procurement auctions generate substantial policy debates due to their volume and complexity. In OECD countries, their value amount to 10-15 percent of GDP. The focus of scholarly debate has recently focused on procurement design and the effect of policy measures on competition. Our study contributes to the literature by estimating the effect of bid screening and litigation on bidding strategies and entry. 

We use a unique data set on highway construction procurement auctions in Poland. The market exhibits a number of features of policy interest including a pronounced presence of foreign bidders and a strict bid selection procedure. We demonstrate with an empirical model that the current policy of rejecting a large share of offers disproportionately affects small firms and creates a barrier to entry. We find that, albeit to a lesser extent, post-bidding litigation enhances the effect.

When: 13 June 2018 10:45

End date: 13 June 2018 11:45

Where: Tias building