Suppliers' collusion in public procurement: ex-ante determinants in zero initial contract price decrease auctions (the case of Russian healthcare) Online publication date: Thu, 04-May-2023
by Evgenii V. Gilenko; Andrei E. Ivanov; Anastasia A. Golubeva; Olga N. Bezhenar
International Journal of Procurement Management (IJPM), Vol. 17, No. 2, 2023
Abstract: In public procurement, awareness of the public buyer of the potential collusive behaviour of suppliers at auctions may help mitigate the risks of only a slight decrease of the initial contract price (ICP). In this research, we focus on a special case of zero ICP decrease auctions (due to suppliers' collusion) to identify the factors that significantly increase the probability of occurrence of such cases. A unique cross-sectional dataset on more than 42,000 electronic reverse (price) auctions conducted over 2014-2020 by public hospitals of St. Petersburg (Russia) was collected; of these auctions, only 0.4% constituted the class of auctions with zero ICP decrease. Even in the presence of such huge sample imbalance, our analysis allowed to identify a number of factors that statistically significantly influenced the probability of zero ICP decrease at auctions in the Russian healthcare. Appropriate policy recommendations are provided in the paper.
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