Abstract
We show how institutional and procedural characteristics affect the final price in public procurement. In order to obtain comparable unit prices, our analysis only examines public procurement of homogeneous goods.
We examine two Czech commodity markets: electricity and natural gas, which enables us to use a private market price as a benchmark metric. The regression analysis is based on the standard ordinary least squares method.
On a dataset of 277 tenders, we find that the final unit price of the procurement is sensitive to movements in both commodity market price and price estimated ex ante by the procurer. Moreover, we identify that the final price is reduced when the procurer uses an open procedure, an electronic auction, or attracts more competitors.