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Regulating Joint Bidding In Public Procurement

Author

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  • Gian L. Albano
  • Giancarlo Spagnolo
  • Matteo Zanza

Abstract

Joint bidding is the practice of two or more independent suppliers submitting a single bid, a widespread practice in private and public procurement. This practice may generate efficiencies through synergies and information sharing, but may also be abused to reduce the number of competitors or—even worse—to facilitate or enforce collusion among them; therefore, it is often regulated. In this paper, we first present results from a survey on the regulation of joint bidding in European public procurement, documenting how the existence and the type of regulation differ across countries, and that—where present—regulation is often related to the ability of an individual firm to be admitted as a solo bidder. Borrowing from the theories of joint bidding in auctions and of horizontal mergers and joint ventures in oligopoly, we then review the basic economics of bidding consortia and the effects that these can have in terms of bidding competition, coordination among firms, risk management, exploitation of other synergies, and entry. Finally, we assess the relative degrees of restrictiveness of several practical criteria that could be used to create consistent regulatory requirements for bidding consortia in public procurement. The only strong conclusion that we can draw is that there is an urgent need for further theoretical and empirical or experimental research on this very important issue for public procurement.

Suggested Citation

  • Gian L. Albano & Giancarlo Spagnolo & Matteo Zanza, 2009. "Regulating Joint Bidding In Public Procurement," Journal of Competition Law and Economics, Oxford University Press, vol. 5(2), pages 335-360.
  • Handle: RePEc:oup:jcomle:v:5:y:2009:i:2:p:335-360.
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    File URL: http://hdl.handle.net/10.1093/joclec/nhn022
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    Citations

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    Cited by:

    1. Nicola Branzoli & Francesco Decarolis, 2015. "Entry and Subcontracting in Public Procurement Auctions," Management Science, INFORMS, vol. 61(12), pages 2945-2962, December.
    2. Bouckaert, Jan & Van Moer, Geert, 2021. "Joint bidding and horizontal subcontracting," International Journal of Industrial Organization, Elsevier, vol. 76(C).
    3. Ari Van Assche & Ali Arsalan Pasha & Lucian Cernat & Hinrich Voss, 2024. "From the editor – Governments as buyers: the international business implications of public procurement," Journal of International Business Policy, Palgrave Macmillan, vol. 7(2), pages 133-146, June.
    4. Laura Rondi & Paola Valbonesi, 2017. "Pre- and post-award outsourcing: Temporary partnership versus subcontracting in public procurement," "Marco Fanno" Working Papers 0211, Dipartimento di Scienze Economiche "Marco Fanno".

    More about this item

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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