This paper aims to measure the cost of procurement because public procurement procedures prescribed by legislation not only enhance transparency and competition but also entail certain transaction costs for both customers and suppliers.
These costs are important to the efficiency of the procurement system. However, very few previous studies have focused on estimating procurement costs. This paper proposes a methodology for public procurement cost evaluation.
This paper shows how procurement costs can be calculated using a formalized survey of public customers. This methodology was tested with a representative group of public customers operating in one region of the Russian Federation.
The authors formulate the policy implications of this paper, as they relate to the improvement of public procurement regulations and argue that this methodological approach can be applied in other developing and transitioning economies.
This paper was prepared as part of the project “Efficient public procurements: incentives and barriers” and supported by the Basic Research Program of the Higher School of Economics in 2015-2016. The authors are grateful to three anonymous reviewers for their very valuable comments. Authors also would thank the specialists of the Kaluga Regional Ministry for Competition Policy for the information and organizational support they provided for our study.
Yakovlev, A., Balaeva, O. and Tkachenko, A. (2018), "Estimation of procurement costs incurred by public customers: a case study of a Russian region", Journal of Public Procurement, Vol. 18 No. 1, pp. 68-87. https://doi.org/10.1108/JOPP-03-2018-005Download as .RIS
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