On the Fuzzy Concept of Competition in Public Procurement

Abstract

Effective competition is often recognized as instrumental to achieve the highest level of value for money in public procurement. At the same time, enlarging the set of participating firms is also seen as way to raise the intensity of competition. This paper argues that even in simple competitive environments with undifferentiated products the link between participation and competition is less obvious than normally assumed. Policy makers’ increasing concerns for primary as well as secondary objectives in public procurement tend to further weaken the link between participation and competion. Moreover, regulatory constraints to favor multi-award outcomes, while blurring the concept of competition altogether, risk to create the conditions for anti-competitive outcomes.

Keywords: Public procurement, competition, lots, participation and award limits

JEL Classification: H57, K21, D40