We evaluate whether an econometric technique that is used in the spatial econometrics and network effects literature can be adopted as a test for collusive bidding in public procurement auctions. The proposed method is applied to the Swedish asphalt cartel that was discovered in 2001. Our dataset covers the period 1995–2009, which makes it possible to test for conditional independence between complementary cartel bids before and after 2001. Our estimates show a significant positive correlation between complementary cartel bids during the cartel period, whereas a non-significant correlation is shown during the later period. The variance of the parameter estimate of interest also differs between the periods, which suggests a structural change in bidding behavior among cartel members between the two periods.

We analyze a regime change from beauty contests to first‐price sealed‐bid and scoring auctions, using Swedish data on public procurement of cleaning services. In beauty contests, the lowest bid often lost, leaving substantial money on the table. The procurement costs were similar before and after the regime change: (i) Entry strongly decreases the procurement cost but did not change. Entry would have decreased had the municipalities not adjusted the objects of auctions. (ii) Municipalities favored in‐house suppliers in the old regime, leading to more aggressive bidding by others. With favoritism reduced, these changes balanced each other out.

Policy makers can employ different instruments to address environmental policy objectives, and the guiding principles for a consistent system of environmental policy are (1) the policies should be effective, (2) there should be one objective per instrument, and (3) multiple objectives and multiple policy instruments must be mutually independent of each other. This paper evaluates these three principles for green public procurement (GPP). As an illustrative example, the analysis refers to the Swedish policy of using public purchase of organic foods as a policy instrument to increase the certified organic agricultural area as a share of the total agricultural area. Our analysis shows that GPP fails to satisfy principles (1) and (3), and the only way to satisfy principle (2) is then to have just one objective with the procurement, i.e., to run the operations. GPP might still have a positive environmental impact, but, if applied, the procuring authority has to be very specific with the one-to-one matching of criterion and objective.

Purpose – The purpose of this paper is to analyze how local and central authorities choose between lowest price and more complex scoring rules when they design supplier-selection mechanisms for public procurements. Five hypotheses are tested: a high level of cost uncertainty and highly non-verifiable quality makes the use of the lowest-price supplier-selection method less likely. Organizational habits and transaction-cost considerations influence the choice of mechanism. Strong quality concerns make complex rules more likely.

Design/methodology/approach – The analysis departures from normative theory (rational choice) and is based on the regression analysis and survey data comprising a gross sample of 40 contracting authorities and detailed information about 651 procurements.

Findings – More complex scoring rules are used more often when the authority is uncertain about costs and about delivered quality. Authority effects are also found to directly and indirectly influence the choice of supplier-selection method, suggesting that tendering design is partly driven by local habits and institutional inertia.

Practical implications – The authors argue that, from a normative point of view, lowest price is an adequate method when the degree of uncertainty is low, for example, because the procured products are standardized and since quality can be verified. When there is significant cost uncertainty, it is better to use the so-called economically most advantageous tender (EMAT) method. (Preferably this should be done by assigning monetary values to different quality levels.) If there is significant uncertainty concerning delivered quality, the contracting authority should retain a degree of discretion, so as to be able to reward good-quality performance in observable but non-verifiable quality dimensions; options to extend the contract and subjective assessments of quality are two possibilities. The main findings are that EMAT and more complex scoring rules are used more often when the contracting authorities report that they experience substantial uncertainty concerning delivered quality and actual costs and that these factors tend to decrease the weight given to price, in line with the predictions. However, the authors also find that this result is mainly driven by variations between authorities, rather than by between-products variation for the same authority. This is from a training of professionals and regulation perspective of policy relevance.

Social implications – Contract allocation based on habits rather than rational ground could implicate the waste of resources (tax payers money) as it adventures the matching of the preferences of the public sector (the objective, subject matter, of the procurement) and what the potential supplier offers in its tender.

Originality/value – Although the principles for supplier selection are regulated by law they give the contracting authority substantial freedom in designing the scoring rule and in choosing what quality criteria to use. The tension between different objectives and the more general question whether the choices made by authorities reflect rational decision making or institutional inertia together motivate the current study. While the design of the supplier-selection mechanism is an important consideration in procurement practice, it has attracted relatively little attention from the academic community.

Advocates of green public procurement (GPP) argue that the public sector can use its purchasing power to influence producers and consumers to reduce their negative impact on the environment. Our aim is to assess GPP as an environmental policy instrument and its ability to lead to the achievement of environmental objectives. Central to our analysis is the extent to which polluting firms choose to adapt to the public sector’s environmental requirements and to invest in greener technologies. Our theoretical finding is that the potential of GPP to function as an objective effective instrument of environmental policy is limited and can actually be counterproductive. From an environmental policy point of view, it is crucial that the GPP aims for an environmental standard beyond the technology of the polluting firms and is designed with reference to defined environmental objectives.

Non-contractible quality dimensions are at risk of degradation when the provision of public services is privatized. However, privatization may increase quality by fostering performance-improving innovation, particularly if combined with increased competition. We assemble a large data set on elderly care services in Sweden between 1990 and 2009 and estimate how opening to private provision affected mortality rates – an important and not easily contractible quality dimension – using a difference-in-difference-in-difference approach. The results indicate that privatization and the associated increase in competition significantly improved non-contractible quality as measured by mortality rates. 

Politicians expect Green public procurement (GPP) to serve as an environmental policy instrument. However, in order for GPP to work as an effective policy instrument it is important to take into consideration potential suppliers’ decisions to participate in the procurement process, the total number of bidders, and the screening of bidders with respect to mandatory green criteria. The aim of this paper is to empirically study GPP in this respect. The analysis presented here is based on data from Swedish cleaning services procurements that are unique in that they contain very detailed information on various environmental standards set by the contracting authorities. We find at best only a weak effect on supplier behavior, and this suggests that the use of GPP in this situation does not live up to its political expectations. 

Non-contractible quality dimensions are at risk of degradation when the provision of public services is privatized. However, privatization may increase quality by fostering performance-improving innovation, particularly if combined with increased competition. We assemble a large data set on elderly care services in Sweden between 1990 and 2009 and estimate how opening to private provision affected mortality rates--an important and not easily contractible quality dimension--using a difference-in-difference-in-difference approach. The results indicate that privatization and the associated increase in competition significantly improved non-contractible quality as measured by mortality rates. It also reduced the cost per resident, although left total cost unaffected.

Syftet med denna studie är att analysera möjliga förklaringar till att upphandlingarsom görs enligt Lagen (2007:1092) om offentlig upphandling inom områdenavatten, energi, transporter och posttjänster (LUF) tycks föranleda en mindre andelöverprövningar än upphandlingar som görs enligt Lagen (2007:1091) om offentligupphandling (LOU). Den senare lagstiftningen är tillämplig på offentliga upphandlingarav tjänster, varor och byggentreprenader som inte faller under de områdensom anges i LUF (se ovan).Tillgänglig statistik visar att överprövning är mer vanligt förekommande blandupphandlingar som regleras av LOU. Detta förhållande kvarstår med hänsyn tagentill att det är mer vanligt att upphandla enligt LOU än LUF. För att belysa möjligaförklaringar till detta har 28 intervjuer genomförts med beställare/upphandlare frånstatliga och kommunala organ samt med företrädare för leverantörer från olikabranscher.Utgångspunkterna för intervjuerna har varit frågor relaterade till upphandlingssituationen(t.ex. organisation och kompetens), juridiska faktorer (t.ex. förhandlingsmöjligheter)samt leverantörernas syn på upphandling (t.ex. överprövningsom affärsstrategi).Intervjuerna ger vid handen att en avgörande anledning till att upphandlingarenligt LUF överprövas i mindre utsträckning än upphandlingar enligt LOU är detmer omfattande förhandlingsutrymme som till skillnad från LOU finns i LUF. Frånupphandlarsidan menar de intervjuade att förhandling förebygger och ger möjlighetatt hantera missförstånd och felaktigheter under upphandlingens gång. Dettaanses minska risken för att en leverantör upplever sig felbehandlad eller upphandlingensom illa genomförd. En annan intressant iakttagelse är att de intervjuadeupphandlarna beskriver att de branscher som upphandlas enligt LOU i högreutsträckning präglas av en ”överprövningskultur”. Av de intervjuade nämner fleraatt LUF-upphandlingar ofta är mer komplexa och att myndigheter som upphandlarunder LUF därför håller sig med upphandlare med hög marknadsspecifikkompetens. En sådan lösning är något som skulle vara mer resurskrävande förkommunala organ, då de ofta förfogar över en i högre grad diversifieradupphandlingsportfölj.