Elon Strömbäck (Umeå University):

“Contract Size and Small Firm Competition in Public Procurement”

Lieu : Centre Biopark – 8bis rue de la croix jarry
Date: Mardi 22 mars 2016 – 14h-16h

Speaker : Elon Strömbäck (Umeå University)

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Paper : “Contract Size and Small Firm Competition in Public Procurement”

Elon Strömbäck is a researcher from Sweden and holds a Ph.D degree in Economics from Umeå University. In his dissertation thesis Policy by Public Procurement: Opportunities and Pitfalls he evaluates public procurement as an environmental policy instrument and a business opportunity for small and medium sized enterprises (SMEs). The purpose of the thesis is to learn more about the incentives for various firms to undertake the investments necessary to become an eligible bidder in the tendering process. He currently works with market design and policy recommendations at the Swedish Energy Markets Inspectorate.

Abstract: The European Commission encourages public authorities to split procurement contracts into multiple contracts in order to increase the competiveness of small and medium sized enterprises (SMEs). In this paper, I use data from Swedish public procurement auctions for internal regular cleaning service contracts to study the effect of contract size and number of contracts on SME participation and the probability of submitting the winning bid. I found that SME participation is negatively related to both contract size and the number of contracts in the procurement. A possible interpretation is that reduced contract size in order to stimulate SME participation is counteracted by reduced incentives for them to enter into procurements with multiple contracts. Medium-sized firms are also more successful when bidding for smaller contracts relative to large firms. Nevertheless, the results indicate that the SMEs’ award rate is positively correlated with the number of contracts in the procurement.

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