Procurement Contracting Stategies

HANDBOOK OF PROCUREMENT, Chapter 4, N. Dimitri, G. Piga, and G. Spagnolo, eds., Cambridge University Press, 2006

41 Pages Posted: 30 Sep 2007

See all articles by Gian-Luigi Albano

Gian-Luigi Albano

University College London, Italian Procurement Agency (Consip S.p.A.)

Giacomo Calzolari

European University Institute - Economics Department (ECO); Centre for Economic Policy Research (CEPR); University of Bologna

Federico Dini

Italian Public Procurement Agency (Consip S.p.A.)

Elisabetta Iossa

University of Rome Tor Vergata; IEFE Bocconi University; Centre for Economic Policy Research (CEPR)

Giancarlo Spagnolo

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

Abstract

Quality and suppliers performance are essential for procurement. This Paper analyses these important issues from two perspectives. The first part deals with the topic of contracting. It describes the features of some common types of contracts that the buyer may choose according to the circumstances of the procurement. The central issue is how the procurer should choose and then design the contract to optimally balance the trade-off between incentives to limit the contractor's supply cost and the flexibility to ex-post adaptation to potential unforeseen events.

When important characteristics of the supply cannot be easily described in - and enforced within - the contract, the procurer must use other tools to ensure successful procurement. The second part of the Paper deals with this important problem, also known as non-contractible quality.

The part provides indications about the methods the procurer may use to obtain adequate quality and customer satisfaction and illustrates which method seems to fit better in the specific procurement context.

Keywords: procurement, contracts, contractible and non-contractible quality

JEL Classification: H57, D81, K12, K40

Suggested Citation

Albano, Gian-Luigi and Calzolari, Giacomo and Dini, Federico and Iossa, Elisabetta and Spagnolo, Giancarlo, Procurement Contracting Stategies. HANDBOOK OF PROCUREMENT, Chapter 4, N. Dimitri, G. Piga, and G. Spagnolo, eds., Cambridge University Press, 2006, Available at SSRN: https://ssrn.com/abstract=908220

Gian-Luigi Albano (Contact Author)

University College London, Italian Procurement Agency (Consip S.p.A.) ( email )

Gower Street
London
United Kingdom
+39 06 8544 9627 (Phone)

Giacomo Calzolari

European University Institute - Economics Department (ECO) ( email )

Villa la Fonte
Via delle fontanelle 18
San Domenico di Fiesole, Florence 50014
Italy

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

University of Bologna ( email )

Piazza Scaravilli 2
I-40126 Bologna
Italy

HOME PAGE: http://sites.google.com/view/giacomo-calzolari

Federico Dini

Italian Public Procurement Agency (Consip S.p.A.) ( email )

00198 Roma
Italy

Elisabetta Iossa

University of Rome Tor Vergata ( email )

Via Columbia n.2
Rome, 00133
Italy

IEFE Bocconi University ( email )

Via Roentgen 1
Milan, Milan 20136
Italy

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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

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