The Competitive Effect on Public Procurement for Public Service Contracts: The Case of the Czech Republic

The article focuses on a previously neglected public procurement research field regarding competitive effects on public service contracts. Current studies analysing the competitive effect primarily focus on the examination of public works contracts, or on examining the competitive effect of public procurement as a heterogeneous whole. The subject of this examination is a separate analysis of public service contracts. Below and above-threshold public service contracts awarded in the Czech Republic in 2014 were examined. The results of the examination of its own sample of 790 public contracts in open procedure show that, with each additional tenderer, the average price drops by 3.04%. This finding is in line with the studies that have dealt with the examination of the competitive effect in public procurement for public works contracts. The analysis also indicates a stronger existence of a competitive effect in open procedure types compared to other procedure types. The report also highlights some of the phenomena that may affect the resulting public contract price, where the higher final price does not necessarily mean inefficiency nor overpricing of the public contract (such as the difficulties with the anticipated price for IT service contracts).