Contract enforcement and discretion: an application to public procurement.

Authors
  • CHEVER Lisa
  • SAUSSIER Stephane
  • JUILLET Annick
  • QUELIN Bertrand
  • STAROPOLI Carine
  • DEFFAINS Bruno
  • PLUNKET Anne
Publication date
2013
Publication type
Thesis
Summary This thesis makes an empirical contribution to two problems facing public procurement: the insufficient implementation of contracts and the choice of whether or not to increase the discretionary margins of public authorities in awarding procedures. The traditional economic approach and regulation have sought to define modes of awarding contracts to the 'lowest bidder', in which the risks of manipulation are assumed to be limited. However, this approach must be questioned in terms of its overall impact on the efficiency of public procurement. Indeed, several recent studies show that contracts are often not rigorously implemented or are incomplete. In such a situation, the lowest bid, ex ante, can be a strategic response that incorporates the possibility of extracting rents ex post, via a lower quality than promised and/or a renegotiation of the initial agreement. The first part of this thesis highlights the difficulties associated with the implementation of contracts, while the second part focuses on the solutions that increased discretion can bring. Thus, we first place ourselves in the regulatory framework of reference, i.e. as it is most often presented to European public purchasers: open tendering is mandatory and only a rigorous implementation of the contract can align ex post the interests of the parties. Despite the existence of incentive clauses, we show that quality problems persist. We suggest several reasons for this persistence: the non-verifiability of efforts (chapter 1) and contractual incompleteness (chapter 2). In this second case, we show that solutions can be developed. Nevertheless, they are only suitable for specific cases. We then depart from the reference framework to study a situation where the public party's room for maneuver increases: it is no longer subject to the obligation to use open tendering. Chapters 3 and 4 successively analyze the interest of negotiated procedures and restricted auctions, both of which increase the buyer's discretionary power. We interpret the capacity of both to improve the efficiency of procurement as a sign that greater freedom in awarding contracts can be a relevant tool for optimizing public purchasing.
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