Scandinavian Working Papers in Economics

SITE Working Paper Series,
Stockholm School of Economics, Stockholm Institute of Transition Economics

No 41: Buyer Quality and Procurement Outcomes: Explorative Evidence From the US

Giancarlo Spagnolo (), Francesco Decarolis (), Elisabetta Iossa (), Vincenzo Mollisi () and Leonardo Giuffrida ()
Additional contact information
Giancarlo Spagnolo: SITE, EIEF & CEPR., Postal: SITE, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Francesco Decarolis: Boston University, EIEF & CEPR
Elisabetta Iossa: University of Rome Tor Vergata, CEPR, IEFE & EIEF
Vincenzo Mollisi: University of Rome Tor Vergata
Leonardo Giuffrida: University of Rome Tor Vergata

Abstract: We explore empirically the impact of buyer quality on public procurement outcomes. Using purchases data (Federal Procurement Data System) and survey data (Federal Employee Viewpoint Survey) from US federal agencies, we find that procurement quality is highly heterogeneous across different agencies and persistent over time. The qualitative aspect that better predicts procurement performance is the perceived degree of cooperation within the unit, followed by the presence of appropriate incentives. We then assess the main channels through which public procurer quality affects outcomes. We find that buyer quality improves the selection of suppliers and strengthens the association between the use of cost plus contracts and the negotiation procedure.

Keywords: Buyer Quality; Competence; Management practices; Procurement

JEL-codes: D44; H11; H57

42 pages, December 21, 2016

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