Long-Term Impacts of Competitive Tendering of Public Services on Market Structures

The EU intends to use calls for tenders to serve in the general economic interest, with a view to replacing administration by the market. Service providers and contracting authorities are expected to enter into lasting partnerships, based on incomplete contracts and flexible outputs. These partners in public service contracts are very different economic entities and to what extent calls for tenders will see the intended services delivered depends considerably on the partners' negotiating abilities and behaviour towards one another. Possible outcomes in different market situations are discussed under both static and dynamic circumstances