Pre- and Post-award outsourcing: Temporary Partnership vs Subcontracting in public procurement (СInSt Research Seminar)

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Please note that the address of CInSt research events has changed to 4 Slavyanskaya Square, building 2.

 PRE- AND POST-AWARD OUTSOURCING: TEMPORARY PARTNERSHIP VS SUBCONTRACTING IN PUBLIC PROCUREMENT

Paola Valbonesi, University of Padova (Italy) and Higher School of Economics (Moscow)

This paper studies the impact of qualification rules to entry public procurement auctions on firm bids and contract execution, contributing to the debate about which regulations may foster the efficient participation of SMEs. Using rich and detailed microdata on all contracts awarded by the Regional Government of Valle d’Aosta from 2000 to 2008, we investigate the differences between ex-ante outsourcing by Temporary Partnerships (TPs) and ex-post outsourcing by firms in optional or mandatory subcontracting. We find that both outsourcing status and firm size affect bids (hence price) and the probability of time and cost overrun. TPs bid lower prices than both large “optional” and “mandatory” firms and also do well in contract execution, similar to small optional firms, while mandatory firms are more likely to exceed expected cost and no better in timely delivery. Evidence holds when we disentangle horizontal and vertical subcontracting. Our results highlight TPs advantage of being free to choose the economic size and the technical boundaries before entering the auction.

Language: English
Date and time: May 18, 2017; 16:00
Place: 4 Slavyanskaya Square, building 2, room 101-102.

Free entrance. If you don't have an HSE ID, please send your name and surname to lovakov@hse.ru before 13:00, May 18.