Economics and management of national economy

Effect of competition among suppliers on public procurement efficiency

Economic Annals-XXI

Economic Annals-ХХI: Volume 159, Issue 5-6, Pages: 38-42

Citation information:
Janke, F., & Packova, M. (2016). Effect of competition among suppliers on public procurement efficiency. Economic Annals-XXI, 159(5-6), 38-42. doi: https://doi.org/10.21003/ea.V159-08

View Full-TextDownload PDF

Frantisek Janke
PhD (Economics),
Assistant Professor,
Faculty of Economics,
Technical University of Kosice
32 B. Nemcovej Str., Kosice, 040 01, Slovak Republic
frantisek.janke@tuke.sk

Miroslava Packova
PhD (Economics),
Researcher,
Faculty of Economics,
Technical University of Kosice
32 B. Nemcovej Str., Kosice, 040 01, Slovak Republic
miroslava.packova@tuke.sk

Effect of competition among suppliers on public procurement efficiency

Abstract. Electronic reverse auctions (eRA) have grown popular in the procurement communities recently. This trend is expected to continue as its benefits have been proved by the results in the companies across many fields. Their results depend on the actual market conditions while the literature emphasises the importance of the number of bidders in eRA for its result. In the paper, we present the evidence of the impact of competition among suppliers biding within eRA on the efficiency of the tender, assessed via savings calculated as a difference between the Initial price and the Contract price. For this purpose, the method of correlation and regression analysis on the public procurement data provided by Electronic Contracting System has been applied. Moreover, we provide an analysis focused on a distinction between the savings caused by higher competition in goods and services, where our expectations of higher savings in services have been confirmed.

Keywords: Procurement; Competition; Electronic Reverse Auction; Savings; Slovak Republic

JEL Classification: H57; D44; Q55

Acknowledgement. This paper is the result of the project «Financial health of companies and its importance in the context of supplier-customer relations» supported by Scientific Grant Agency VEGA (Grant agreement number 1/0978/16).

DOI: https://doi.org/10.21003/ea.V159-08

References

  1. Amelinckx, I., Muylle, S., & Lievens, A. (2008). Extending electronic sourcing theory: An exploratory study of electronic reverse auction outcomes. Electronic Commerce Reseacrh and Applications, 7(1), 199-133.
    doi: http://dx.doi.org/10.1016/j.elerap.2007.11.003
  2. Bacik, R., Gavurova, B., & Fedorko, I. (2015). The Analysis of the Impact of Selected Marketing Communication Factors on the Online Consumer Behavior. Journal of Applied Economic Sciences, X, 7(37), 999-1004.
    Retrieved from http://cesmaa.eu/journals/jaes/files/7(37)%20Winter%202015%20JAES%20online.pdf
  3. Beall. S., et al. (2003). The role of reverse auctions in strategic sourcing. Tempe, Arizona: CAPS Research.
  4. Delina, R. (2012). Perspectives of enterprise networking for single e-market. Proceedings of the 20th Interdisciplinary information management talks – IDIMT 2012, Austria, 41, 327-336.
    Retrieved from http://www.idimt.org/sites/default/files/idimt_proceedings_2012_0.pdf
  5. Delina, R., & Pridavok, M. (2013). Smart requirements for B2B reverse auction procurement. Proceedings of 21st Interdisciplinary Information Management Talks – IDIMT 2013, Austria, 42, 207-216.
    Retrieved from http://www.idimt.org/sites/default/files/IDIMT_2013_proceedings_final.pdf
  6. Gavurova, B., Soltes, V., & Novacek, M. (2014). Mobile Camera System for Ensuring Transport Security. Proceedings of the 14th international multidiscilinary scientific geoconference – SGEM 2014, Bulgaria, 249-257.
    doi: http://dx.doi.org/10.5593/sgem2014/b21/s7.032
  7. Jap, S. (2002). Online reverse auctions: issues, themes and prospects for the future. Journal of the Academy of Marketing Science, 30(4), 506-525.
    doi: http://dx.doi.org/10.1177/009207002236925
  8. Klezl, V., & Kubacka, M. (2015). Type of e-auction as a factor influencing its result. Proceedings of the 23rd Interdisciplinary Information Management Talks – IDIMT 2015, Austria, 44, 263-270.
    Retrieved from http://www.idimt.org/sites/default/files/IDIMT_proceedings_2015.pdf
  9. Koblen, I., Szabo, S., & Krnacova, K., (2013). Selected Information on European Union Research and Development Programmes and Projects focused on Reducing Emissions from Air Transport, Nase More – Our Sea, International Journal of Maritime Science & Technology, 60(5-6), 113-122.
    Retrieved from http://www.nasemore.com/web/attachments/article/345/4.%20I.
    Koblen,S.Szabo,K.Krnacova60(5-6)2013,pp.113-122.pdf
  10. Lancioni, R., Smith, M., & Jensen, S. (2003). Strategic internet application trends in supply chain management. Industrial Marketing Management, 32(3), 199-210.
    doi: http://dx.doi.org/10.1016/S0019-8501(02)00264-X
  11. Onur, I., Ozcan, R., & Tas, B. K. O. (2012). Public Procurement Auctions and Competition in Turkey. Review of industrial organization, 40, 207-223.
    doi: http://dx.doi.org/10.1007/s11151-011-9299-3
  12. Onyije, L. E., & Opara, J. A. (2013). Information and Communication Technologies (ICT): A Panacea to Achieving Effective Goals in Institutional Administration. Mediterranean Journal of Social Sciences, 4(13), 227-230.
    Retrieved from http://www.idosi.org/mejsr/mejsr18(9)13/22.pdf doi: 10.5829/idosi.mejsr.2013.18.9.11935
  13. Pavel J., & Sicakova-Beblava, E. (2013). Do e-auctions really improve efficiency of public procurement? The case of the Slovak municipalities. Prague Economic Papers, 22(1), 111-124.
    doi: http://dx.doi.org/10.18267/j.pep.443
  14. Pridavok, M., & Delina, R. (2013). Effective spend management through electronic reverse auction configurations. Quality Innovation Prosperity, 17(1), 1-8.
    doi: http://dx.doi.org/10.12776/qip.v17i1.151
  15. Schoenherr,T., & Mabert, V. A. (2007). Online Reverse Auctions: Common Myths Versus Evolving Reality. Business Horizons, 50, 373-384.
    doi: http://dx.doi.org/10.1016%2Fj.bushor.2007.03.003
  16. Singer, M., Konstantinidis, G., Roubik, E., & Beffermann, E. (2009). Does e-Procurement Save the State Money? Journal of Public Procurement, 9(1), 58-78.
    Retrieved from https://www.academia.edu/25442436/Journal_of_Public_Procurement_Volume_9_Issue_1_58-78_2009
  17. Sipos, G., & Turcek, M. (2015). Trends in Public Procurement in 2014. Bratislava, Slovakia: Transparency International Slovakia (in Slovak).
  18. Soltes, V., Balloni, A. J., Gavurova, B., & Soltes, M. (2014). Economic Aspects of a Health System Electronization. In: Moumtzoglou, A., Kastania, A., Archondakis, S. (Eds.), Laboratory Management Information Systems: Current Requirements and Future Perspectives (pp. 32-50). USA: IGI Global, 32-50,
    doi: http://dx.doi.org/10.1016%2Fj.bushor.2007.03.003
  19. Stefko, R., Habanik, J., & Butoracova Sindleryova, I. (2010). Marketing Instrumentary in the Process of Project Acceptation within the Acceleration of Back-warded Regions Development. Ekonomicki casopis, 58(5), 512-526.
  20. Stefko, R., Fedorko, R., & Bacik, R. (2014). The Significance of Internet Marketing Tools in Terms of Building a Positive Image of an Higher Education Institution. Proceedings of the 24th International Business Information Management Association – IBIMA 2014, Italy, 1764-1772.
  21. Stefko, R.,& Nowak, S. (2014). Cooperation shrines of europe in regional management and development. Polish Journal of Management Studies, 10(2), 209-215.
    Retrieved from http://www.pjms.zim.pcz.pl/cooperation-shrines-of-europe-in-regional-management-and-development.html
  22. Stefanescu, A., Stefanescu, L., & Ciora, I. L. (2009). Intelligent tools and techniques for modern management. Chinese Business Review, 8(2), 46-55.
    Retrieved from http://www.davidpublishing.com/show.html?9723
  23. Swaminathan, M., & Tayur, S. (2008). Models for Supply Chains in E-Business, Management Science, 49(10), 1387-1406.
    doi: http://dx.doi.org/10.1287/mnsc.49.10.1387.17309
  24. Wagner, S. M., & Schwab, P. A. (2004). Setting the Stage for Successful Electronic Reverse Auctions. Journal of Purchasing & Supply Management, 10(1), 11-26.
    doi: http://dx.doi.org/10.1016%2Fj.pursup.2003.11.001
  25. Yilmaz, M. (2014). Auctioning a discrete public good under incomplete information. Theory and Decision, 78, 471-500.
    doi: http://dx.doi.org/10.1007/s11238-014-9433-4

Received 30.04.2016

View Full-TextDownload PDF
In, , , ,

More Papers