We provide a general framework in which to determine the optimal penalty fee inducing the contractor to respect the contracted delivery date in public procurement contracts (PPCs). We do this by developing a real option model that enables us to investigate the contractor's value of investment...

Disputes over penalties for breach of contract are often solved in court. A simple model shows how inefficient courts may induce public buyers to refrain from enforcing penalties for late delivery to avoid litigation, inducing sellers to delay. Using a large dataset on Italian public...

This paper provides a general framework to determine the optimal penalty fee to induce a contractor to respect the contracted delivery date in public procurement contracts (PPCs). We did this by i) developing a real option model to evaluate the investment timing flexibility that the inclusion of...

We investigate the relationship between the time politicians stay in office and the functioning of public procurement. To this purpose, we collect a data set on the Italian municipal governments and all the procurement auctions they administered between 2000 and 2005. Identification is achieved...

Aggregation of public demand may have positive effects on the demand for green and socially conscious goods. The exemplary role of procuring entities in fostering sustainable procurement is automatically accentuated by the mass of aggregated procurement. The economies of scale possible through...

We investigate how the functioning of public procurement is affected by the time politicians have stayed in office. We match a data set on public procurement auctions by Italian municipalities to a data set on the politics of municipal governments. For each municipality, we relate the mayor's...

This paper contributes to the analysis of quantitative indicators (i.e., red flags or screens) to detect corruption in public procurement. Expanding the set of commonly discussed indicators in the literature to new ones derived from the operating practices of police forces and the judiciary,...

While e-procurement is widely advocated as an effective tool to promote participation of SMEs in public procurement markets, little evidence exists as to what factors may influence the allocation of contracts to differently sized firms. We analyze transactions – below the EU-thresholds –...

Although it is widely recognized that public procurement may act as a “pull” mechanism for development and employment, serious concerns are constantly voiced as to the friendliness of public procurement processes towards small and medium enterprises (SMEs), arguably the most vital sector of...