Sage Journals: Discover world-class research

Abstract

Public authorities promote transparent public procurement practices to increase competition and reduce public procurement costs. In this article, we focus on public procurement of the European Union (EU). We employ a multidisciplinary approach to analyse economic effects of information in public procurement. We quantify the information content of 2,390,630 EU public procurement notices published in 22 different languages using natural language processing techniques. Subsequently, we examine the impact of the information content on public procurement outcomes. We find that higher information levels have significant positive effects. Competition is considerably higher when notices contain more information. On average, contract prices would be 6%–8% lower if notices were to contain adequate information. EU governments could save up to $€$ 80 billion if all public procurement notices were to have detailed information. Based on our comprehensive analysis, we believe that authorities should regulate the information content of notices to promote competition and cost-effectiveness in public procurement.

Keywords

Economic analysis information retrieval natural language processing public procurement

Get full access to this article

View all access options for this article.

References

Bosio

Djankov

. How large is public procurement? In: World Bank Blogs, https://blogs.worldbank.org/developmenttalk/how-large-public-procurement

European Commission. European semester thematic factsheet public procurement, https://ec.europa.eu/info/sites/info/files/file_import/european-semester_thematic-factsheet_public-procurement_en_0.pdf

Onur Özcan

İR

Taş

BKO

. Public procurement auctions and competition in Turkey. Rev Ind Organ 2012; 40: 207–223.

Iimi

. Auction reforms for effective official development assistance. Rev Ind Organ 2006; 28: 109–128.

Directive 2014/24/EU of the European parliament and of the council on public procurement and repealing directive 2004/18/EC, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0024

Bajari

Hortacsu

. The winner’s curse, reserve prices, and endogenous entry: empirical insights from eBay auctions. RAND J Econ 2003; 34: 329–355.

Cernat

Kutlina-Dimitrova

. Public procurement: how open is the European union to US firms and beyond? CEPS Papers 26698, 4March 2020. Brussels: Centre for European Policy Studies.

Kutlina-Dimitrova

Lakatos

. Determinants of direct cross-border public procurement in EU member states. Rev World Econ 2016; 152: 501–528.

Taş

Dawar

Holmes

et al. Does the WTO government procurement agreement deliver what it promises? World Trade Rev 2019; 18(4): 609–634.

10.

Coviello

Guglielmo

Spagnolo

. The effect of discretion on procurement performance. Manag Sci 2018; 64: 715–738.

11.

Szucs

. Discretion and corruption in public procurement. Working paper, University of California, Berkeley, 8 November 2017, https://sites.google.com/view/ferencszucs/research

12.

De Silva

Dunne

Kosmopoulou

. An empirical analysis of entrant and incumbent bidding in road construction auctions. J Ind Econ 2003; 51: 295–316.

13.

De Silva

Kosmopoulou

Lamarche

. The effect of information on the bidding and survival of entrants in procurement auctions. J Public Econ 2009; 93: 56–72.

14.

Miroslav

Miloš

Velimir

et al. Semantic technologies on the mission: preventing corruption in public procurement. Comput Ind 2014; 65(5): 878–890.

15.

Soylu

Ahmet

Corcho

Elvesæter

et al. Enhancing public procurement in the European Union through constructing and exploiting an integrated knowledge graph. In: Proceedings of the 19th international semantic web conference, Athens, 2–6 November 2020, Vol. 12507, pp. 430–446. Berlin: Springer.

16.

Soylu

Ahmet

Corcho

Elvesæter

et al. TheyBuyForYou platform and knowledge graph: expanding horizons in public procurement with open linked data. Semant Web 2022; 13: 265–291.

17.

Muñoz-Soro

Esteban

Corcho

et al. PPROC, an ontology for transparency in public procurement. Semant Web 2016; 7(3): 295–309.

18.

Rodríguez

JMÁ

Labra

Cifuentes

et al. Towards a pan-European E-procurement platform to aggregate, publish and search public procurement notices powered by linked open data: the Moldeas approach. Int J Soft Eng Knowl Eng 2012; 22(3): 365–384.

19.

Basile

Caputo

Ciano

et al. SEPIR: a semantic and personalised information retrieval tool for the public administration based on distributional semantics. Int J Electron Gov 2017; 9: 132–155.

20.

Lops

Di Ciano

Lopane

et al. AI-based decision support systems for the management of E-procurement procedures 2022. IIR2022: 12th Italian Information Retrieval Workshop, June 29 - June 30th, 2022, Milan: Italy. Available at: https://ceur-ws.org/Vol-3177/paper3.pdf

21.

Soylu

Corcho

Elvesæter

et al. Data quality barriers for transparency in public procurement. Information 2022; 13(2): 99.

22.

Lima

Silva

de Souza Mendes

et al. Inferring about fraudulent collusion risk on Brazilian public works contracts in official texts using a Bi-LSTM approach. In: Findings of the association for computational linguistics: EMNLP 2020. Stroudsburg, PA: Association for Computational Linguistics, 2020, pp. 1580–1588.

23.

Rabuzin

Modrusan

. Prediction of public procurement corruption indices using machine learning methods. In: KMIS 2019 – 11th international conference on knowledge management and information systems, Vienna, 17–19 September 2019, pp. 333–340, https://www.scitepress.org/Papers/2019/83536/83536.pdf

Supplementary Material

Please find the following supplemental material available below.

For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.

For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.

0.00 MB

0.06 MB

Information is essential for competitive and cost-effective public procurement

Abstract

Keywords

Get full access to this article

References

Supplementary Material