Regulating Joint Bidding in Public Procurement

Posted: 1 Jun 2009

See all articles by Gian Luigi Albano

Gian Luigi Albano

Consip S.p.A. - The National Central Purchasing Body; LUISS "G. Carli", Department of Economics and Finance

Giancarlo Spagnolo

Stockholm School of Economics (SITE); Centre for Economic Policy Research (CEPR); University of Rome 'Tor Vergata'; EIEF

Matteo Zanza

Arthur D. Little, SPA.

Date Written: June 2009

Abstract

Joint bidding is the practice of two or more independent suppliers submitting a single bid, a widespread practice in private and public procurement. This practice may generate efficiencies through synergies and information sharing, but may also be abused to reduce the number of competitors or-even worse-to facilitate or enforce collusion among them; therefore, it is often regulated. In this paper, we first present results from a survey on the regulation of joint bidding in European public procurement, documenting how the existence and the type of regulation differ across countries, and that-where present-regulation is often related to the ability of an individual firm to be admitted as a solo bidder. Borrowing from the theories of joint bidding in auctions and of horizontal mergers and joint ventures in oligopoly, we then review the basic economics of bidding consortia and the effects that these can have in terms of bidding competition, coordination among firms, risk management, exploitation of other synergies, and entry. Finally, we assess the relative degrees of restrictiveness of several practical criteria that could be used to create consistent regulatory requirements for bidding consortia in public procurement. The only strong conclusion that we can draw is that there is an urgent need for further theoretical and empirical or experimental research on this very important issue for public procurement.

Keywords: H57, K21, D40

Suggested Citation

Albano, Gian Luigi and Spagnolo, Giancarlo and Zanza, Matteo, Regulating Joint Bidding in Public Procurement (June 2009). Journal of Competition Law and Economics, Vol. 5, Issue 2, pp. 335-360, 2009. Available at SSRN: https://ssrn.com/abstract=1411531 or http://dx.doi.org/nhn022

Gian Luigi Albano (Contact Author)

Consip S.p.A. - The National Central Purchasing Body ( email )

Via Isonzo, 19/E
Rome, 00198
Italy
+39 06 85449.627 (Phone)

LUISS "G. Carli", Department of Economics and Finance ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

Giancarlo Spagnolo

Stockholm School of Economics (SITE) ( email )

P.O. Box 6501
Stockholm
Sweden

HOME PAGE: http://https://sites.google.com/site/giancarlospagnoloshomepage/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

University of Rome 'Tor Vergata' ( email )

Faculty of Economics - DEI
Via Columbia 2
Rome, RM 00133
Italy

EIEF ( email )

Via Due Macelli, 73
Rome, 00187
Italy

HOME PAGE: http://WWW.EIEF.IT

Matteo Zanza

Arthur D. Little, SPA. ( email )

Via Sardegna 40
Rome, RM 00187
Italy
+39 06688821 (Phone)

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