The Impact of Open Data on Public Procurement

61 Pages Posted: 27 Nov 2019

See all articles by Raphael Duguay

Raphael Duguay

Yale School of Management

Thomas Rauter

University of Chicago - Booth School of Business

Delphine Samuels

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA)

Date Written: November 22, 2019

Abstract

We examine how the increased accessibility of public purchasing data affects competition, prices, contract allocations, and contract performance in government procurement. The European Union recently made its already public but difficult-to-access information about the process and outcomes of procurement awards available for bulk download in a user-friendly format. Comparing government contracts above EU publication thresholds with contracts that are not, we find that increasing the public accessibility of procurement data raises the likelihood of competitive bidding processes, increases the number of bids per contract, and facilitates market entry by new vendors. Following the open data initiative, procurement prices decrease and EU government agencies are more likely to award contracts to the lowest bidder. However, the increased competition comes at a cost ─ firms execute government contracts with more delays and ex-post price renegotiations. These effects are stronger for new vendors, complex procurement projects, and contracts awarded solely based on price. Overall, our results suggest that open procurement data facilitates competition and lowers ex-ante procurement prices but does not necessarily increase allocative efficiency in government contracting.

Keywords: Public Procurement; Transparency; Data Accessibility; Competition; Allocative Efficiency

JEL Classification: D61; G38; H57; M41

Suggested Citation

Duguay, Raphael and Rauter, Thomas and Samuels, Delphine, The Impact of Open Data on Public Procurement (November 22, 2019). Available at SSRN: https://ssrn.com/abstract=3483868 or http://dx.doi.org/10.2139/ssrn.3483868

Raphael Duguay

Yale School of Management ( email )

165 Whitney Ave
New Haven, CT 06511
United States

Thomas Rauter (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Delphine Samuels

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA) ( email )

77 Massachusetts Avenue
Cambridge, MA 02139-4307
United States

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