Further Econometric Evidence on the Extent and Sources of Cost Savings in Competitively Tendered Contracts

34 Pages Posted: 6 Oct 2016

See all articles by Jorge González Chapela

Jorge González Chapela

Centro Universitario de la Defensa de Zaragoza

J. Maria Labeaga Azcona

Universidad Nacional de Educacion a Distancia (UNED) - Faculty of Economics

Luis Medrano-Adan

Centro Universitario de la Defensa (Zaragoza)

Date Written: August 31, 2016

Abstract

By estimating a flexible nonlinear regression model of savings on an original data set of service procurements conducted by the Spanish Armed Forces, this paper provides robust and precise novel econometric evidence on the extent and sources of cost savings in public procurement. The net effect on savings of the policy-amenable and economically advantageous variables that we estimate, such as the size of the procured function, the importance of price in the contract award criteria, and the number of bidders who participate in the tender, may help contracting agencies to select management practices and to forecast the price paid out. A comparison with estimates reported in previous studies is also made.

Keywords: Public procurement, size elasticity of savings, exponential regression, Spanish Armed Forces

JEL Classification: H57, C51

Suggested Citation

González Chapela, Jorge and Labeaga Azcona, José Maria and Medrano-Adan, Luis, Further Econometric Evidence on the Extent and Sources of Cost Savings in Competitively Tendered Contracts (August 31, 2016). Available at SSRN: https://ssrn.com/abstract=2848426 or http://dx.doi.org/10.2139/ssrn.2848426

Jorge González Chapela (Contact Author)

Centro Universitario de la Defensa de Zaragoza ( email )

Academia General Militar, Ctra. de Huesca, s/n
Zaragoza, Zaragoza 50090
Spain

José Maria Labeaga Azcona

Universidad Nacional de Educacion a Distancia (UNED) - Faculty of Economics ( email )

Calle Senda del Rey, 11
28040 Madrid
Spain
+34 91 398 7811 (Phone)
+34 91 398 6339 (Fax)

Luis Medrano-Adan

Centro Universitario de la Defensa (Zaragoza) ( email )

Carretera de Huesca
Zaragoza, Zaragoza 50090
Spain

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