Another One Bites the Dust: Recurrent Procurement Contracts in the Czech Republic

Abstract

This article deals with the phenomenon of repeated contracts, specifically the effect of trust in public contracts. Our main objective is to identify the factors that influence the concluding of repeated contracts and to verify whether repeated contracts lead to increases in prices. We use a complex dataset of public procurement of municipalities in the Czech Republic for the period of 2014-2017, which covers more than 4,000 public contracts. This range of data allows a larger number of variables to be applied, including specific independent variables concerning municipalities, such as the size of the municipality. The data allow us to study this subject by means of both a general model tested on all public contracts and a partial model applied to public works. The presented results of quantitative econometric models from the data obtained from the awards of public contracts in the municipalities of the Czech Republic show that the fact of whether it was a repeated contract or a contract performed by a new (unknown to a contracting authority) supplier affected the chance of winning a contract.

Keywords

public procurement recurrent contracts public works Czech Republic

Introduction

The Czech Republic ranks among the most decentralized Member States of the European Union (EU; cf. Nemec et al., 2017) and has one of the highest levels of municipality fragmentation: there are more than 6,250 municipalities in the Czech Republic. The share of gross domestic product (GDP) allocated through local government expenditure is approximately 10.7% (Eurostat, 2017). This expenditure is allocated mostly for the provision of public goods and services to the population. Under the current legislation, municipalities are obliged to oversee the general development of their territories and provide citizens with public goods and services. They must provide these public goods and services in accordance with the principles of sound and prudent management (Act No. 128/2000 Coll., on Municipalities) (Czech Republic, 2018a).

One significant method of providing such services is contracting out; the volume of the total public procurement market is EUR17.7 billion, with approximately 9.9% being the share awarded by municipalities (Ministry of Regional Development, 2017). The Czech Republic also has other forms of providing public goods and services, for example, privatization, public–private partnership (PPP), and semi PPP projects (Soukopová, Vaceková, & Klimovský, 2017). Public utilities such as water and sewage services are supplied in a noncompetitive environment by legal entities with various ownership structures; energy supply is a regulated service provided by a small number of suppliers using a common infrastructure and competing in the area of price. However, social services such as education and health care have been converted into a public–private civil sector mix of forms of supply (financing is predominantly public; Nemec & Soukopová, 2016).

Contracting out prevails over other forms because it shows better results, for example, in the field of waste management (cf. Soukopová et al., 2017), and due to negative residual effects from the transformation period that are mostly associated with the notion of privatization (Vacekov� et al., 2019) or with failures related to the initial phase of the implementation of PPP projects (Transparency International, 2009).

Our research deals with a specific part of contracting out represented by repeated contracts, that is, situations in which a single supplier repeatedly wins contracts from a contracting authority.

The issue of repeated contracts is addressed in the part of the scientific literature on public procurement that seeks to analyze bidding behavior (Jofre-Bonet & Pesendorfer, 2000) and bid rigging (Ishii, 2009), to define an optimal public procurement process with respect to former experiences with suppliers (Albano, Cesi, & Iozzi, 2017; Cesi & Albano, 2008), and to solve the complexity problem by auction or negotiation (Baldi, Botasso, Conti, & Picardo, 2016).

The empirical part of the literature aims to analyze the effect of repeated contracts on the price of contracts (Tkachenko, Yakovlev, & Kuznetsova, 2017) and to identify the factors that lead to the awarding of such contracts by a contracting authority (Iossa & Waterson, 2019).

Our study follows on from the results of the empirical branch of the research. It focuses on repeated contracts in the environment of municipalities in the Czech Republic. Our main objective is to identify the factors that influence the concluding of repeated contracts and verify whether repeated contracts lead to increases in prices, due to, for example, the monopolistic behavior of a supplier, corruption, or the effects of other contextual variables.

This article expands the current knowledge base because, in contrast to Tkachenko et al. (2017) and Iossa and Waterson (2019), whose research takes, more or less, the form of a case study from one industry (sugar procurement in the first study, and competitive tendering for the provision of bus services in London in the second), we use a complex dataset of public procurement of municipalities in the Czech Republic for the period of 2014-2017, which covers more than 4,000 public contracts. This range of data allows a larger number of variables to be applied, including specific independent variables concerning municipalities, such as the size of the municipality. The data allow us to study this subject by means of both a general model tested on all public contracts and a partial model applied to public works. The main reason for dividing sample data into a general model and a specific model for public works is that public works are long-term incomplete contracts (Bajari & Tadelis, 2006) and raise different theoretical issues because of the major role played by the execution stage, with differences in the relationship between firms and contracting authorities. This approach will help identify the factors specific to the Czech Republic that affect the concluding of repeated contracts and verify whether they have any effect on overpricing.

This article also provides new information about the results of contracting out in countries with specific conditions: the countries burdened with the legacy of communism (Ochrana, Plaček, & Křápek, 2019) in which the public administration contends with issues of limited accountability (Nemec et al., 2018; Plaček et al., 2019) and corruption, which is another significant issue related to contracting (Nemec et al., 2016), (Nemec & De Vries, 2018).

Our article also contributes to focusing the debate about the form of securing public services in countries with these specific conditions on a rational analysis rather than on an ideological bias, as is common in countries with a longer tradition of democracy (Bel, Fageda, & Warner, 2010; Gradus, Dijkgraaf, & Wassenaar, 2014).

This article is structured as follows. After a brief introduction, it defines the theoretical interface and conceptualizes the hypotheses. The hypotheses are conceptualized using contracting out and public procurement papers (Kutlina-Dimitrova & Lakatos, 2016; Locatelli, Mariani, Sainati, & Greco, 2017; McLean, 2017; Meehan, Ludbrook, & Mason, 2016). An empirical strategy is introduced to verify the formulated hypotheses. Logit regression is used to identify the factors having an effect on concluding repeated contracts and the ordinary least squares (OLS) model to analyze overpricing. In the “Results” section, the results of the hypotheses testing are presented. These results are subsequently discussed within the current discourse. This article concludes by offering a conceptual innovation on the issue based on empirical research providing a basis for a viewpoint on trends and imperatives regarding public policy implications.

Theoretical Grounds and Formulated Hypotheses

The present research is based on papers (Iossa & Waterson, 2019; Tkachenko et al., 2017). That clearly show the variances in the research of repeated contracts in different social contexts. Main differences are described in Table 1.

Table 1.

The variances in the research of repeated contracts in different social contexts.

	Tkachenko et al. (2017)	Iossa and Waterson (2019)
Social context	Russia	United Kingdom
Behavioral models	Assumption of opportunistic behavior versus effects of honest behavior	No focus on any unfair behavior
Dataset	Procurement of a simple homogeneous good in the form of granulated sugar 2011-2013	Bus routes tendered at least twice by TfL 2003-2015
Types of relations	Repeated procurement and connections based on the state ownership of suppliers	Tenders under essentially the same rules of competition
Main results	Private suppliers: Prices of repeated contracts lower than one-time deals when procured through more transparent procedures and higher when using nontransparent procedures State-owned suppliers: Significant overpricing for nontransparent procedures compared to private suppliers	Tender performance and outcomes are worsening slightly, with higher prices being observed over time There may be learning effects, sunk costs asymmetries, and activism effect, as the incumbents win significantly more often than entrants

Tkachenko et al. (2017) provided a price analysis of simple homogeneous goods, demonstrating an opportunity to identify corrupt behavior by comparing the prices of repeated contracts with the prices of one-time deals. According to Tkachenko et al. (2017), repeated contracts may lead to lower prices as a result of decreases in transaction costs, mutual exchange of information, trust building, and elimination of uncertainty regarding the supplied quality, provided that the behavior between the buyer and the seller is fair. Unfair behavior, which usually has the nature of corruption, leads to overpricing of contracts. The mechanism of overpricing operates mostly through nontransparent contracts that allow for favoring existing suppliers. Based on this, they hypothesize that where public procurements are performed in more competitive ways (through e-auctions), the price per unit of homogeneous products in repeated contracts would be lower than in one-time deals, and where a more restrictive form of the tendering procedure is applied, the opposite effect would arise.

This article also verifies whether the intensity of such effects increases when the bidder is a state-owned enterprise (Tkachenko et al., 2017, p. 55). According to its conclusions for nontransparent procedures, the prices of suppliers under repeated contracts are 17% to 21% higher than the Russian average. In repeated contracts where the supplier is a state-owned enterprise for nontransparent procedures, the contract prices of suppliers are 16% to 20% higher than the Russian average retail prices of private suppliers. This result can be considered to be an indicator of corruption (Tkachenko et al., 2017). Tkachenko comes to similar conclusions when analyzing gasoline procurements (Yakovlev, Vyglovskiy, Demidova, & Bashlyk, 2016).

In contrast to Tkachenko et al. (2017), Iossa and Waterson (2019) do not assume any unfair behavior in their analysis. They focus on analyzing the evolution of competition in the market for local bus services in London. Using a dataset of more than 400 bus routes tendered at least twice by Transport for London (TfL) under essentially the same rules of competition, they obtained information on all tenders from 2003 to 2015 (Iossa & Waterson, 2019). The authors see the advantages for incumbents in positive learning, in which incumbents can optimize their operational costs through experience obtained during their existing contract and subsequently can submit a more competitive bid in the next tendering procedure. However, this is not necessarily the case when a contract is less open. The resulting impact of the positive learning effect is influenced by two mostly opposing partial effects. The first is “fierce competition” for earlier contracts, in which potential suppliers apply penetration pricing in the beginning, while benefiting from learning economies in the long run, enabling them to keep their prices low. The second effect is the locking in by existing suppliers on later contracts. In the long run, a supplier can use its profits to advantage over other competitors, possibly leading to the extreme situation in which competitors are not able to compete (Iossa & Waterson, 2019).

After positive learning, the second factor is sunk costs. Sunk costs mean that an incumbent will likely be in a privileged bidding position due to its ownership of specific assets already in place (Iossa & Waterson, 2019). The sunk costs are low for a contract holder only for the contract term. If the contract holder loses its market position, the costs grow, which requires corporate activism and attempts to ensure that the contract lasts. Another factor is switching costs, which are the costs incurred by a contracting authority in the event of a change in suppliers. Iossa and Waterson (2019) observe that these costs are typical in particular for such specific industries as information technology (IT). The last factor is capacity constraints (Iossa & Waterson, 2019). If two firms have a symmetric capacity in a period prior to the auction, when the winner is committed, it will be more constrained than the loser, and the higher profits it gains from winning the current auction will lead to lower profits in the future.

Iossa and Waterson (2019) also confirmed these hypotheses in an empirical analysis of bus service contracts, when existing providers won contracts more often. The average price of all contracts was increasing. Nevertheless, the highest increases in comparison with the expected prices were noticed in relation to new entrants. New entrants that won tenders entered with a 4.20% price increase over the expected price; this is even higher than the 3.41% with incumbents. These observations confirm the hypotheses. Alternately, the results may be explained by an increase in the quality of the services being supplied (Iossa & Waterson, 2019).

We carry out a synthesis of these conclusions and add an analysis of further factors characteristic for contracting in the environment of Czech municipalities. We have formulated the following set of hypotheses that we verify with respect to the whole sector of municipality public procurements and the submodel of public works contracts.

Hypothesis 1 (H1): Any previous public contract obtained from the same contracting authority increases the probability of obtaining a repeated contract.

In formulating this hypothesis, we follow on from the theory defined above. Several motives that can be classified as positive and negative are expected to play a role here. One motive classified as positive is the effort to meet the objectives of public procurements in the best possible manner. Such objectives may be considered to include the achievement of the “3E”—economy, efficiency, and effectiveness defined by the Act on Financial Control (Czech Republik, 2018b) or more precisely the Ministry of Finance (2016). For this reason, contracting authorities may be motivated to choose bidders with whom they have positive experience or who have proved to be reliable partners.

A negative motive can be seen in the effort to avoid potential risks, which means that officials repeatedly select the bidders they have had positive experiences with. This is the “soft option” allowing the officials to fulfill their assignment in the easiest possible way when they do not want to risk potential complications (Plaček & Ochrana, 2018).

Another negative motive may be corrupt behavior, which is characteristic for the public sector; Fazekas & Toth, 2018; Ochrana & Stehlik, 2015; Owusu & Chan, 2019; Popa, 2018; Stehlík, 2018; Verhelst, 2018).

Hypothesis 2 (H2): Less transparent (less open) forms of public procurement auctions lead to a higher probability of obtaining a repeated contract.

Plaček, Ochrana, Schmidt, Křápek, and Půček (2017) and Palguta and Pertold (2017) observe that less open tendering procedures are used to give preference to a specific supplier and result in higher final prices. This situation corresponds more with negative motives, when a contracting authority reduces competition by means of a less open tendering procedure with the aim of maximally increasing the chances of the supplier who is connected with the contracting authority in some way. The contracting authority proceeds in this way so as to either eliminate the risk of failure of a public procurement as much as possible or to obtain corrupt benefits.

Hypothesis 3 (H3): Repeated contracts are more expensive than one-time purchases.

Overpricing in public contracts is a frequent problem in the Central and Eastern European (CEE) countries (Ochrana & Pavel, 2013; Plaček et al., 2019). The existing research in this area has focused mostly on analyzing the competitive effect (Pavel & Kubík, 2011). According to the classic theory of contracts, a higher level of competition has an impact on the contract price (Halonen, 2016; Pavel & Slavík, 2018; Takano, 2017). We suppose that repeated contracts are more expensive than one-time purchases.

Institutional Context

The Czech Republic is a unitary state. The Constitution from 1993 establishes two levels of local governments: regions and municipalities. Municipalities are the basic territorial self-governing communities, that is, public corporations acting sui juris in legal relations and responsible for the results of these relations (Nemec et al., 2016). There are currently about 6,250 municipalities in the country, and with this, the Czech Republic belongs to the group of countries with very high territorial fragmentation (Nemec et al., 2016).

Table 2 shows that in terms of the number of municipalities and the shares of the population, population has a major role to play in populations of up to 10,000.

Table 2.

Structure of Municipalities in the Czech Republic by Population.

Municipality	No. of municipalities	Population	Population share in %
Up to 199 inhabitants	1,449	180,093	1.7
From 200 to 499 inhabitants	1,997	651,475	6.2
From 500 to 999 inhabitants	1,378	973,247	9.2
From 1,000 to 1,999 inhabitants	745	1,042,569	9.9
From 2,000 to 4,999 inhabitants	417	1,262,911	12.0
From 5,000 to 9,999 inhabitants	141	964,031	9.1
From 10,000 to 19,999 inhabitants	69	970,075	9.2
From 20,000 to 49,999 inhabitants	44	1,324,522	12.6
From 50,000 to 99,999 inhabitants	12	874,462	8.3
More than 100,000 inhabitants	6	2,310,458	21.9

Source. Czech Statistical Office (2016).

Table 3 shows overview of independent variables—probability of winning a contract.

Table 3.

Overview of Independent Variables—Probability of Winning a Contract.

Variable	Category	Description	Type	M	SD	Minimum	Maximum	Reflection in literature	Behavior hypothesis
Winning bid	Dependent variable	The bidder won in a public procurement auction	Binary	0.226	0.418	0	1	Iossa and Waterson (2019)
Selected at a specific contracting authority	The nominal independent variable to test Hypothesis 1	Number of prior winning contracts at the same contracting authority	Discrete	0.424	1.183	0	12	Tkachenko, Yakovlev, and Kuznetsova (2017), Yakovlev, Vyglovskiy, Demidova, and Bashlyk (2016).	Increases the percentage of the chance of winning a public procurement auction
Management type	The nominal independent variable to test Hypothesis 2	Open procedures, restricted procedures, negotiated procedures with prior publication, negotiated procedures without prior publication, simplified below-threshold procedures, and small-scale public contracts.	Nominal	—	—	1	6	Strand, Ramada, and Canton (2011), Pavel and Kubík (2011)	Open procedure—decreases the percentage of the chance of winning a public procurement auction. Restricted procedures, negotiated procedures with prior publication, negotiated procedures without prior publication, simplified below-threshold procedures, and small-scale public contracts increase the percentage of the chance of winning a public procurement auction.
Selected	Independent variable	Number of prior winning contracts at all contracting authorities	Discrete	1.411	4.491	0	44	Tkachenko et al. (2017), Yakovlev et al. (2016).	Increases the percentage of the chance of winning a public procurement auction
Number of bids	Independent variable	Number of bidders	Discrete	7.393	4.567	1	26	Pertold and Palguta (2017), Borowiec (2017), Loader (2007), Moe, Newman, and Sein (2017)	Decreases the percentage of chances to win in a public procurement auction
Population	Independent variable	The logarithm of the number of inhabitants in the municipality awarding a public contract	Discrete	9.815	2.328	4.700	14.04	Guccio, Pignataro, and Rizzo (2014), Baldi, Botasso, Conti, and Picardo (2016)	Increases the percentage of the chance of winning a public procurement auction
Public contract type	Independent variable	Supply, service, or construction works contracts	Nominal	—	—	1	3	Baldi et al. (2016)	Supply and service contracts increase the percentage of the chance of winning a public procurement auction. Construction works contracts increase the percentage of the chance of winning a public procurement auction.

The role of municipalities is defined in the Law on Municipalities (Act No. 128/2000 Coll.; Nemec et al., 2016). Local governments are subject to numerous other acts that either regulate their management, such as Budgetary Rules for Territorial Entities (Act No. 250/2000 Coll.), the Law on Tax Assignment (Act No. 243/2000 Coll.), the Law on Accounting (Act No. 563/1991 Coll.), and the Law on Local Government Audit (Act No. 240/2004 Coll.), or specify their responsibilities, such as the Law on Education (Act No. 561/2004Coll.) and the Law on Roads (Act No. 13/1997 Coll.; Nemec et al., 2016).

Local government revenues in the Czech Republic amounted to 11.5% of GDP in 2017. The EU average is 10.7% of GDP and 9.8% of GDP in the Eurozone (Eurostat, 2017). Local government revenues in the Czech Republic consist mainly of shared taxes. The highest share is the value-added tax.

According to the latest Eurostat data of 2017, local governments spend 10.7% of GDP on public spending. The EU-wide average was 10.6% of GDP in 2017, and the share of the Eurozone countries was 9.6% (Eurostat, 2017).

A municipality must provide certain defined services in the self-administration provision, including elementary schools, kindergartens, children’s homes, nursing homes, social housing, theaters, libraries, museums, free-time activities facilities, water quality and delivery, gas and electricity delivery, public space cleaning, cemeteries, public roads, public lighting, public transport, municipal police, and firefighters (Nemec et al., 2016). The highest share of municipal expenditures is on capital expenditure, administration, transportation, education, environment, housing, and shared services (Nemec et al., 2016).

Contracting out is the prevailing method of public spending execution in this field (Soukopová et al., 2017). Contracting out is regulated by the Public Procurement Act (Act No. 134/2016 Coll.). Table 4 shows the types of procurement procedures applied by municipalities. Table 5 shows overview of independent variables.

Table 4.

The Types of Procurement Procedures Applied by Municipalities.

Type of procurement procedure	Characteristics of the procurement procedure
Open	The most open type of procurement procedure. It is published and there is no limit on the number of economic operators who can participate in it.
Restricted	The contracting authority commences a procurement procedure by publishing an invitation by means of which it invites an unlimited number of economic operators to submit requests to participate. On the basis of such requests, the contracting authority subsequently selects the candidates who have met the qualification requirements and invites only such candidates to submit their bid. No one else may submit a bid.
Negotiated procedure with prior publication (incl. the competitive dialogue procedure)	The contracting authority commences a negotiated procedure with prior publication by means of a notice, which is also an invitation to participate in the negotiated procedure with prior publication. On the basis of this notice, candidates submit their request to participate along with documents proving their qualification. Subsequently, the contracting authority commences negotiations with candidates about the final version of their bids.
Negotiated procedure without prior publication	The contracting authority commences a negotiated procedure without prior publication by sending an invitation to negotiate or an invitation to submit a bid or by commencing negotiations with an economic operator. In this manner, the contracting authority addresses only a limited number of candidates.
Simplified below-threshold procedure	At its own discretion, the contracting authority will send an invitation to tender to at least five candidates and publish the invitation concurrently. The level of openness of this procurement procedure type is very low because the determining of the circle of potential economic operators fully depends on the will of the contracting authority.
Small-scale public contracts (incl. mini-tenders)	In these cases, contracting authorities need not proceed according to the rules of a procurement procedure, although they certainly must comply with the fundamental principles of the Public Procurement Act. Therefore, such tenders do not appear in the Journal of Public Procurement but in various sources, which most frequently include the profile of a contracting authority and official notice boards.

Source. Oživení (2018).

Table 5.

Overview of Variables—Effect on the Price.

Variable	Category	Description	Type	M	SD	Minimum	Maximum	Reflection in literature	Assumption about behavior
Standardized price (the contract price of a public contract divided by the anticipated value)	Dependent variable	The final price of a contract	Continuous	0.828	0.220	0.100	4.105	Tkachenko, Yakovlev, and Kuznetsova (2017), Yakovlev, Vyglovskiy, Demidova, and Bashlyk (2016).
Selected at a contracting authority	Nominal independent variable for H3	Number of prior winning contracts at the same contracting authority	Discrete	0.971	2.763	0	41	Tkachenko et al. (2017), Yakovlev et al. (2016)	Increases overcharging
Number of bids	Independent variable	Number of bidders	Discrete	4.977	3.936	1	37	Burget and Che (2004), Pavel (2010), Jurčík (2007, 2012)	Decreases overcharging
Divided into parts	Independent variable	Contract is divided to multiple parts	Binary	0.145	0.352	0	1	Iossa and Waterson (2019)	Increases overcharging
Application of an electronic auction	Independent variable	The contract was tendered in the form of an electronic auction	Binary	0.039	0.194	0	1	Lewis-Faupel, Neggers, Olken, and Pande (2016), Soudek and Skuhrovec (2016)	Decreases overcharging
Selected	Independent variable	Number of prior winning contracts at all contracting authorities	Discrete	29.64	80.31	0	740	Tkachenko et al. (2017), Yakovlev et al. (2016).	Increases overcharging
Public contract category	Independent variable	Supplies, services, construction works	Nominal	—	—	1	3	Plaček, Ochrana, Schmidt, Křápek, and Půček (2017), Plaček et al. (2018)	Supplies and services increase overcharging. Construction works decrease overcharging
Type of public procurement auctions	Independent variable	Open procedures, restricted procedures, negotiated procedures without prior publication, negotiated procedures without prior publication, and simplified below-threshold procedures	Nominal	—	—	1	5	Tkachenko et al. (2017), Yakovlev et al. (2016).	Open procedures decrease overcharging. Restricted procedures, negotiated procedures with prior publication, negotiated procedures without prior publication, simplified below-threshold procedures increase overcharging.
Population	Independent variable	The logarithm of the number of inhabitants in the municipality awarding a public contract	Discrete	9.558	2.324	3.892	14.04	Guccio, Pignataro, and Rizzo (2014), Baldi, Botasso, Conti, and Picardo (2016)	Increases overcharging
The anticipated value of a contract	Independent variable	The logarithm of the anticipated value	Discrete	15.40	1.596	9.210	21.19	Bajari, McMillan, and Tadelis (2009), Guccio, Pignataro, and Rizzo (2012)	Increases overcharging

According to the Ministry of Regional Development (2017), public contracts are awarded through open tenders (48.3%), simplified under-the-threshold procedures (37.4%), negotiated procedures without publication (7.5%), restricted procedures (6.0%), negotiated procedures with publication (0.6%), and competitive dialogue procedure (0.1%).

The number of submitted bids for tenders is an interesting indicator. In 2017, unlike in other years, this number reached the minimum (Ministry of Regional Development, 2017). For all public contracts, this indicator reached 2.17 bids; for construction works, this was even more significant, as the average number of bids was 2.03. The number of construction orders awarded on the basis of one bid increased to 80%.

Table 6 shows the frequency of submitted bids by the procurement procedure type for 2014-2017.

Table 6.

The Frequency of Submitted Bids by Procurement Procedure Type for 2014-2017.

Type of procurement procedure	All contracts	Construction public works contracts	Supply contracts	Services contracts
Open	1,549	1,345	97	107
Restricted	122	121	1	0
Negotiated procedure with prior publication (incl. the competitive dialogue procedure)	13	1	6	6
Negotiated procedure without prior publication	27	19	4	4
Simplified procedure	2,137	1,687	147	303
Small-scale public contracts (incl. mini-tenders)	23	20	2	1
Missing information	48	0	6	0
Total	3,925	3,193	263	421

Source. Authors.

Data and Method

Data and Sources

We use the data on the public contracts awarded in the Czech Republic in 2014-2017; the data for 2013 were used for the initial setting of parameters. Altogether, these are 4,134 records about the bids submitted to public procurement auctions announced by municipalities. The data originate from individual profiles of contracting authorities (decentralized websites for storing documents and other data during public procurement auctions) and are combined with records in the Journal of Public Procurement (the central website).

Construction contracts are considered to be a good indicator of the efficiency of local government activities, and their “local” dimension is quite relevant when considering the extent of the benefits they provide (Guccio, Pignataro, & Rizzo, 2014).

Method

The formulated hypotheses are verified by means of logistic and linear regression: first on a general model implemented on all public contracts and subsequently on a model focused on public works contracts. Apart from nominal variables used to test the hypotheses, we add to the model other control variables that are typical for the environment of Czech municipalities and the character of the studied issue.

Model to test H1 and H2

Logistic regression (the logit model) is applied for estimating the effects of individual parameters. The dependent variable “winning bid” represents the fact of whether a specific bidder was selected to implement a public contract. This variable is determined by the following factors, which were defined as independent variables (see the model below).

Model to test H3

To verify the formulated hypotheses concerning the effect on the contract prices awarded in public procurement auctions, similarly as with the previous models, we used data on the public contracts awarded in 2014-2017; the data for 2013 were used for the initial setting of parameters. Data directly from the Journal of Public Procurement were used because no records about participation of unselected suppliers are required to monitor the effect of repeated contracts on a price. The model included the total number of 8,831 public contracts or their separate parts awarded in 2014-2017. These are only the contracts awarded by municipalities.

The dependent variable is the contract price of a public contract divided by the anticipated value. An estimate of the effect of individual factors was performed by means of linear regression applying the OLS method (the reason for the occurrence of heteroskedasticity is used to estimate the robust standard error toward heteroskedasticity—variant HC1). Variance inflation factors did not indicate a multicollinearity issue. The presence of endogeneity (e.g., correlation of explanatory variable with the error term) that may cause OLS estimator bias due to simultaneity (reversed causality) was also tested. The Wu–Hausman test did not reject hypothesis of exogeneity of variables that may depend on contract price (i.e., included within dependent variable)—number of bids and anticipated value. Therefore, and because the dependent variable is not the contract price but only its relative price change, we do not consider endogeneity an issue that would have a significant impact on the parameters’ estimates.

Results

In the following section, we present the results of the hypothesis testing.

Verification of H1 and H2

After performing the estimation of parameters, the following effects of factors on the winning of public contracts were obtained; models for all contracts and construction works contracts were performed separately (there was a high proportion of contracts for road maintenance and reconstruction of sewage and water supply systems).

Hypothesis 1: Any previous public contract obtained from the same contracting authority increases the probability of obtaining a repeated contract

The formulated hypothesis was confirmed on the basis of the econometric model (see Table 7). It is clear from the data that both with the aggregate model including all public contracts and with the construction works contracts, there was a demonstrated effect of the number of contracts performed in the past (or the selections of the same supplier made in the past) on whether the supplier would also be selected in the concerned contract. On average, the chance to win is increased by the previous implementation of a public contract for a contracting authority by 147% (the percentage of chances is 2.4). The effect is thus higher than for a contract implemented at a different contracting authority, which also increases the chance to win but only by 4%.

Table 7.

Results of Testing Hypotheses 1 and 2.

Model	All	Construction
Invariable	1.77944***	1.39019***
Previously selected by the contracting authority (number of)	0.903877***	0.830610***
Previously selected by any authority (number of)	0.0461326***	0.0344230***
Number of bids	−0.304171***	−0.277422***
Negotiated procedures without prior publication	1.31083***	1.07379**
Simplified below-threshold procedures	−0.320402***	−0.283701**
Construction contract	−0.372721***
Number of inhabitants (log)	−0.133594***	−0.142788***
Number of observations	3,755	3,268
McFadden R²	.288733	.259900
Akaike criterion	2,871.196	2,240.402

Note. Dependent variable—the winning bid.

***

Statistical significance at a confidence level of 1%. **Statistical significance at a confidence level of 5%.

It is interesting to note that there are very small differences between the general model and the construction works model. Given the theoretical assumptions (Bajari & Tadelis, 2006), it would be assumed that for construction works, given the general public works characteristics, the chances of recovering the contract would be higher. However, this assumption was not confirmed.

Hypothesis 2: Less transparent or open forms of public procurement auctions lead to a higher probability of obtaining a repeated contract

The formulated hypothesis was confirmed for the model of all public procurements. Here, the application of the negotiated procedure without prior publication means nearly a 4 times higher chance of obtaining a contract (the percentage of chances 3.71). This is based on the principle of the negotiated procedure without prior publication, which serves in awarding additional work to the same supplier, among other things.

Even in the evaluation of this hypothesis, we have to state that the share of chances of re-contracting with less transparent forms of management is not greater for public works than for the general model.

The other results are also interesting. The variable of the number of bids, which is an expression of the competitive effect, decreases the probability of winning a contract for both the general model and the construction works model. Furthermore, the size of a municipality as an authorized contractor is worth noting; the chance of winning a public contract is on average lower for larger municipalities/contractors. We attribute this fact to lower competition for contracts awarded by smaller municipalities; typically, they are contracts with a lower value. Repeated contracts occur frequently in monopoly and bilateral monopoly markets. Small municipalities in the Czech Republic frequently face only one supplier willing to provide the service in their area and there is no other choice (water supply and sewage, water cleaning, garbage collection).

Table 8 shows result of testing hypothesis 3.

Table 8.

Result of Testing Hypothesis 3.

Model	All	Construction
Invariable	1.07516***	0.938709***
Number of bids	−0.0216825***	−0.0185290***
Divided into parts	−0.0271134***	−0.0646807***
E-auction		0.0837851***
Selected at a contracting authority	0.00166636*	−0.00314497***
Selected	−9.1525e−05***	−8.9248e−05***
Services	−0.116351***
Construction works	−0.0404069***
Restricted procedure	0.120622***	0.130976***
Negotiated procedures without prior publication	0.0621097***	0.0971447***
Number of inhabitants (log)	−0.00470130***	−0.00331654***
The anticipated value (log)	−0.00392310**
Number of observations	8,589	4,764
R ²	.237125	.321760
Akaike criterion	−4,028.955	−4,150.368

Note. Dependent variable—standardized contract price. Verification of Hypothesis 3. The effects of individual factors on the bid price were estimated. After estimating the parameters, the following values were obtained; models for all contracts and the contracts for construction works were performed individually.

***

Statistical significance at a confidence level of 1%. **Statistical significance at a confidence level of 5%. *Statistical significance at a confidence level of 10%; for the type of public procurement auctions, it is measured against the open procedure, for the public contract category against the supply contracts.

Hypothesis 3: Repeated contracts are more expensive than one-time purchases

The performed econometric models show that for the aggregate model capturing all types of public contracts, the experience of a contracting authority with a specific supplier (a repeated contract) does not have a statistically significant effect on increasing the price. For construction contracts, this factor rather leads to decreasing the price.

The effect on overpricing was proved more for some less open and transparent forms of public procurement auctions. At a general level, the formulated hypothesis was not confirmed.

From the other results, the effect of the size of the municipality is interesting: the number of inhabitants can decrease the bidding price as well as the size of a contract. As with the testing of the previous hypotheses, this result can be attributed to the higher level of competition that exists when awarding contracts to municipalities with larger populations.

Discussion

In this section, we provide a comparison of the achieved results with previously published papers, focusing on Tkachenko et al. (2017) and Iossa and Waterson (2019).

Our results confirmed the assumption (Iossa & Waterson, 2019) about how the learning effect operates on the side of a contractor. The likelihood of obtaining a contract is increased by any contract previously implemented for a given contracting authority and also any public contract previously implemented for the public sector. The potential contractor thereby gains experience enabling the effective preparation of a tender. Regarding the impact of less transparent procedures, the negotiated procedure without prior publication increases the likelihood of obtaining a contract, which confirms the assumptions of both Iossa and Waterson (2019) and Tkachenko et al. (2017).

The issue of motivation remains open. If we assume that such a result is caused by dishonest behavior by a contracting authority, it is surprising that the prices awarded for these repeated contracts do not increase. According to Fazekas, Cingolami, and Tóth (2018), who studied the possibility of using various indicators to identify corruption practices in public procurement, individual indicators such as overpricing or restricted nature of a procedure cannot be applied separately but always in combination to increase measurement reliability and provide a richer picture. Spagnolo (2012) stated that overpricing is often mentioned as an indicator for the initial analysis; however, dishonest behavior can acquire forms that are not detectable by means of this indicator. A classic example of this is increasing a price through supplements, or very poor quality of a delivery. Dishonest behavior can involve a situation in which a contracting authority subsequently fails to claim any contractual sanctions from a contractor. Despite these doubts, Spagnolo (2012) does not assume that repeated contracts are always a result of corruption practices. He considers them to be a result of the reputation mechanism that has a considerable impact on the selection of a contractor.

Another view is based on the analysis of the papers focused on countries with specific conditions (e.g., Nemec et al., 2016; Nemec et al., 2018; Ochrana et al., 2019; Plaček et al., 2018; Spagnolo, 2012); these papers identify a very strong inclination of contracting authorities toward the strategy of eliminating the risk of a failure of a contract or a review by a regulator. This translates into excessive application of the criterion of the lowest price as the main evaluation criterion. This means that there is also pressure on the price for any existing contractors, who have to offer lower prices if they want to win further contracts. Spagnolo et al. (2012) also explained the option of less open procedures as the efforts of the contracting authority to eliminate contractors with poor past performance. The situation when a contracting authority uses a less open tender procedure to eliminate the tenderers who compete through low prices and poor quality can lead to increases in final prices.

When we assess public procurement on the local level, it is impossible not to mention the accountability factor, which is often described as a positive effect connected with decentralization. According to the analysis of the impacts of administrative decentralization on the public procurement in the Czech Republic (Plaček, Schmidt, Ochrana, & Půček, 2016), overpricing at the level of local governments is lower than overpricing at the level of the central government. In our paper, we used the indicator of the number of inhabitants in a municipality. We found that a higher number of inhabitants in a municipality have a negative impact both on the percentage of chances that the same contracting authority will be selected repeatedly and on the overpricing of contracts. In our opinion, this is caused by the number of potential tenderers for public contracts, which is generally higher than in bigger cities.

This article outlines the need for further research (e.g., focus groups and/or other techniques of qualitative research to test the motives and incentives resulting in the observed behavior) and its importance for the development of science, society, or practice (including public policy implications). Our analysis dealt with the phase of the selection of tenderers for a public contract. To obtain a more complex view and prove or disprove the assumptions or motives, it is necessary to study also the other phases of the public procurement procedure, in particular the ex-post evaluation of a contract, which lies in the analysis of the final price of a contract and the quality of a delivery.

From a public policy perspective, we raise an important issue regarding the opportunity to transfer mechanisms that work in the private sector and are based on creating trust between procurers and suppliers. According to Stuart, Verville, and Taskin (2009), Smeltzer (2006), and Crotts, Alderson Coppage, and Andibo (2001), trust between a supplier and a consumer can replace a variety of costly governance mechanisms, including complex legislation, superfluous quality assurance, time-consuming communication, forecasting, and replenishment. For the public sector, the implication of this mechanism implies the need to make changes in social relationship and embedded ties, institutional processes, and economic incentive alignments (Stuart et al., 2009).

Concluding Remarks

This article deals with the phenomenon of repeated contracts, that is, the effect of trust in public contracts. The presented results of quantitative econometric models from the data obtained from the awards of public contracts in the municipalities of the Czech Republic show that the fact of whether it was a repeated contract or a contract performed by a new (unknown to a contracting authority) supplier affected the chance of winning a contract. Taking into account the resulting price of a contract, we can explain a winning bid more by the factors that are defined by Iossa and Waterson (2019), that is, the learning effect, sunk cost risk, and corporate activism. However, it turns out that the openness and transparency of public procurement auctions still has a critical effect on the price in the Czech environment. Regarding public policy implications, it is necessary to strike a balance between the discretionary power of individual contracting authorities and the requirements for transparency and accountability that are part of the EU-wide legislation. For the Czech Republic, it is necessary to bridge the gap between the formal possibility to take into account the indicators of quality and past performance in preparing a public procurement procedure and the application of these indicators in practice by individual contracting authorities.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This contribution was supported by the Czech Science Foundation (GAČR) No. GA19-06020S.

ORCID iD

Michal Plaček

Author Biographies

Michal Plaček is an associate professor at Ambis College and Charles University. His research is focused on public procurement, corruption and efficiency.

Jana Soukopová is an associate professor at Masaryk University. Her research deals with green economy, public procurement and efficiency.

Gabriela Vaceková is an associate professor at Masaryk University. Her research is focused to nonprofit sector.

František Ochrana is a full time professor at Charles University Prague. His reasearch deals with public procurement and public policy.

Martin Schmidt is a senior researcher at Charles University Prague. He is also practitioners in filed of public procurement.

References

Albano

L. A.

Cesi

Iozzi

(2017). Public procurement with unverifiable quality: The case for discriminatory competitive procedures. Journal of Public Economics, 145, 14-26.

Bajari

McMillan

Tadelis

(2009). Auctions versus negotiations in procurement: An empirical analysis. Journal of Law, Economics, & Organization, 25, 372-399.

Bajari

Tadelis

(2006). Incentives and award procedures: Competitive tendering vs. negotiations in procurement. In Dimitri

Piga

Spangnolo

(Eds.), Handbook of procurement (pp. 121-142). New York, NY: Cambridge University Press.

Baldi

Botasso

Conti

Picardo

(2016). To bid or not to bid: That is the question: Public procurement, project complexity and corruption. European Journal of Political Economy, 43, 89-106.

Bel

Fageda

Warner

M. E.

(2010). Is private production of public services cheaper than public production? A meta-regression analysis of solid waste and water services. Journal of Policy Analysis and Management, 2, 553-577.

Borowiec

, (2017). The impact of public procurement system on the development of competition in the economy in the light of empirical research. Oeconomia Copernicana, 8, 37-50.

Burguet

Che

Y. K.

, (2004). Competitive procurement with corruption. Rand Journal of Economics, 35, 50-68.

Cesi

Albano

L. G.

(2008, April). Past performance evaluation in repeated procurement: A simple model of handicapping (FEEM Working Paper No 19.2008). Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1105711

Crotts

J. C.

Alderson Coppage

C. M.

Andibo

(2001). Trust-commitment model of buyer-supplier relationships. Journal of Hospitality & Tourism Research, 25, 195-208.

10.

Czech Republic. (2018a) Zákon č. 128/2000, O obcích [Law nr. 128/2000, Municapal law].

11.

Czech Republic. (2018b) Zákon č. 320/2001, O finanční kontrole [Law nr. 320/2001, About financial control system].

12.

Czech Statistical Office. (2016) Malý lexikon obcí České republiky [Lexicon of Czech municipalities]. Retrieved from https://www.czso.cz/csu/czso/maly-lexikon-obci-ceske-republiky-2016

13.

Eurostat. (2017a). Local government expenditures. Retrieved from https://ec.europa.eu/eurostat/web/government-finance-statistics

14.

Eurostat. (2017b). Local government revenues. Retrieved from https://ec.europa.eu/eurostat/web/government-finance-statistics

15.

Fazekas

Cingolami

Tóth

(2018). Innovation in objectively measuring corruption in public procurement. In Enheier

K. H.

Haber

Kayser

A. M.

(Eds.), Governance indicators, approaches, progress, promise (pp. 154-187). Oxford, UK: Oxford University Press.

16.

Fazekas

Toth

(2018). The extent and cost of corruption in transport infrastructure. New evidence from Europe. Transportation Research Part A: Policy and Practice, 113, 35-54.

17.

Gradus

Dijkgraaf

Wassenaar

(2014). Understanding mixed forms of refuse collection, privatization, and its reverse in the Netherlands. International Public Management Journal, 17, 328-343.

18.

Guccio

Pignataro

Rizzo

(2012). Determinants of adaptation costs in procurement: An empirical estimation on Italian public works contracts. Applied Economics, 44, 1891-1909.

19.

Guccio

Pignataro

Rizzo

(2014). Do local governments do it better? Analysis of time performance in the execution of public works. European Journal of Political Economy, 34, 237-252.

20.

Halonen

K.-M.

(2016). Disclosure rules in EU public procurement: Balancing between competition and transparency. Journal of Public Procurement, 16, 528-553.

21.

Iossa

Waterson

(2019). Maintaining competition in recurrent procurement contracts: A case study on the London bus market. Transport Policy, 75, 141-149. Retrieved from https://www-sciencedirect-com-443.web.bisu.edu.cn/science/article/abs/pii/S0967070X16300762

22.

Ishii

(2009). Favor exchange in collusion: Empirical study of repeated procurement auctions in Japan. International Journal of Industrial Organization, 27, 137-144.

23.

Jofre-Bonet

Pesendorfer

(2000). Bidding behavior in a repeated procurement auction: A summary. European Economic Review, 44, 1006-1020.

24.

Jurčík

, (2007). The economic impact of the EC procurement policy. Agricultural EconomicsZemědělská ekonomika, 2007, 333-337.

25.

Jurčík

, (2012). Projednání ekonomických a právních dopadů novelizací velké transparentní novely účinné od 1. 4. 2012 a návrhů nových zadávacích směrnic v Evropské unii. (Discussion of the Economic and Legal Implications of the Big Transparent Amendment Effective from 1 4th 2012, and Proposals for New Directives on Public Procurement in the European Union.) Ekonomický časopis/Journal of Economics, 60, 766-768.

26.

Kutlina-Dimitrova

Lakatos

(2016). Determinants of direct cross-border public procurement in EU Member States. Review of World Economics, 152, 501-528.

27.

Lewis-Faupel

Neggers

Olken

B. A.

Pande

(2016). Can electronic procurement improve infrastructure provision? Evidence from public works in India and Indonesia. American Economic Journal: Economic Policy, 8, 258-283.

28.

Loader

(2007). The challenge of competitive procurement: Value for money versus small business support. Public Money & Management, 27, 307-314.

29.

Locatelli

Mariani

Sainati

Greco

(2017). Corruption in public projects and megaprojects: There is an elephant in the room! International Journal of Project Management, 35, 252-268.

30.

McLean

E. V.

(2017). The politics of contract allocation in the World Bank. Review of International Organizations, 12, 255-279.

31.

Meehan

Ludbrook

M. N.

Mason

C. J.

(2016). Collaborative public procurement: Institutional explanations of legitimised resistance. Journal of Purchasing and Supply Management, 22, 160-170.

32.

Michal

Milan

František

, (2019). Identifying corruption risk: A comparison of Bulgaria and the Czech Republic. Journal of Comparative Policy Analysis: Research and Practice, 21, 366-384.

33.

Ministry of Finance. (2016). Metodický pokyn CHj č.3 - Metodika veřejného nakupování. Retrieved from file:///C:/Users/micha/Downloads/Metodika_2016_Metodicky-pokyn-CHJ-c-3.pdf

34.

Ministry of Regional Development. (2017) Výroční zpráva o stavu veřejných zakázek v České republice za rok 2017 [Annual report about public procurement for year 2017]. Retrieved from http://www.portal-vz.cz/getmedia/d5527fdb-5d70-4573-977a-04da3ba5a582/Vyrocni-zprava-o-trhu-verejnych-zakazek-v-Ceske-Republice-za-rok-2017_schvalena-vladou.pdf

35.

Moe

C. R.

Newman

Sein

M. K.

(2017). The public procurement of information systems: Dialectics in requirements specification. European Journal of Information Systems, 26, 143-163.

36.

Nemec

De Vries

(2018). Factors and determinants of the quality of public administration in the CEE region. In Ongaro

van Thiel

(Eds.), The Palgrave handbook of public administration and management in Europe (pp. 865-880). London, England: Palgrave Macmillan.

37.

Nemec

Lenka

Milan

Daniel

, (2017). Economies of Scale on the Municipal Level: Fact or Fiction in the Czech Republic? NISPAcee Journal of Public Administration and Policy: the Network of Institutes and Schools of Public Administration in Central and Eastern Europe, NISPAcee – Network of Institutes and Schools of Public Administration in Central and Eastern Europe, 10, 39-59.

38.

Nemec

Markéta

Š.

Filip

Marta

Matúš

, (2016). Transaction costs in Czech and Slovak public procurement. In Sedmihradská

(Ed.), Theoretical and practical aspects of public finance (pp. 282-286). Praha: Oeconomica.

39.

Nemec

Plaček

Sedmihradská

Soukopová

(2016). Local government in the Czech Republic. In Sienkiewicz

M. W.

Kuc_Czajkowska

(Eds.), Local government in selected CEE countries: Experiences, reforms and determinants of development (pp. 1749-1758). Lublin, Poland: Maria Curie Sklodowska University Press.

40.

Nemec

Soukopová

(2016). Mixed system: Transformation and current trends in the provision of local public services in the Czech and Slovak Republics. In Wollmann

Koprić

Marcou

(Eds.), Public and social services in Europe: Governance and public management (pp. 151-168). London, England: Palgrave Macmillan.

41.

Nemec

Šumpíková

Orviská

Bušina

Grega

(2016). Transaction costs in the public procurement: Selected findings in Czech and Slovak conditions. In Loster

Pavelka

(Eds.), Proceeding of the 10th International Days of Statistics and Economics (pp. 1749-1758). Praha, Czech Republic: Melandrium.

42.

Ochrana

Pavel

(2013). Analysis of the impact of transparency, corruption, openness in competition and tender procedures on public procurement in the Czech Republic. Central European Journal of Public Policy, 7, 114-135.

43.

Ochrana

Plaček

Křápek

(2019). Ministerial staff of the Czech Republic 25 years after the “Velvet Revolution.” Teaching Public Administration, 37, 46-66. doi:10.1177/0144739418806547

44.

Ochrana

Stehlik

(2015). Overpricing of public procurement for construction works in the Czech Republic. Ekonomický časopis, 63, 227-238.

45.

Owusu

E. K.

Chan

A. P. C.

(2019). Barriers affecting effective application of anticorruption measures in infrastructure projects: Disparities between developed and developing countries. Journal of Management in Engineering, 35(1). Retrieved from https://ascelibrary.org/doi/10.1061/%28ASCE%29ME.1943- 5479.0000667

46.

Oživení. (2018). Public procurement. Retrieved from https://www.oziveni.cz/nase-temata/verejne-zakazky/

47.

Palguta

Pertold

(2017). Manipulation of procurement contracts: Evidence from the introduction of discretionary thresholds. American Economic Journal: Economic Policy, 9, 293-315.

48.

Pavel

, (2010). Analýza vlivu míry konkurence na cenu rozsáhlých staveb dopravní infrastruktury. (The Analysis of Influence Competition Factor on the Price of Large Transport Infrastructure.) Politická ekonomie, 58, 343-356.

49.

Pavel

Kubík

(2011). Faktory ovlivňující intenzitu konkurenčního efektu při zadávání veřejných zakázek na stavební práce v ČR [Factors influencing the impact of competitive effect in case of public works in Czech Republic]. In Kubátová

(Ed.), Proceedings of the XVI international scientific conference on Theoretical and Practical Aspects of Public Finance (pp. 3-10). Prague, Czech Republic: University of Economics Prague.

50.

Pavel

Slavík

(2018). The relationship between competition and efficiency of waste-collection services in the Czech Republic. Local Government Studies, 44, 275-296.

51.

Plaček

Ochrana

(2018). A comparison of selected characteristics of the senior civil service of the Czech Republic and the United Kingdom: A lesson for effective management of bureaucracy. Economic Research/ekonomska istrazivanja, 31, 880-898.

52.

Plaček

Ochrana

Schmidt

Křápek

Půček

(2017). Avoidance of risk from the contracting authorities: Public procurement case study. Ekonomický časopis, 65, 587-601.

53.

Plaček

Ochrana

Schmidt

Nemec

Půček

(2019). The factors causing delays in public procurement: The Czech Republic vs. the United Kingdom. Public Money & Management. Advance online publication. doi:10.1080/09540962.2019.1651034

54.

Plaček

Schmidt

Ochrana

Půček

(2016). Impact of selected factors regarding the efficiency of public procurement (the case of the Czech Republic) with an emphasis on decentralization. Ekonomický časopis, 64(1), 2-36.

55.

Popa

(2018). What do good governments actually do? An analysis using European procurement data. European Political Science Review, 10, 369-391.

56.

Smeltzer

L. R.

(2006). The meaning and origin of trust in buyer-supplier relationships. Journal of Supply Chain Management, 33, 440-448.

57.

Soudek

Skuhrovec

(2016). Procurement procedure, competition and final unit price: The case of commodities. Journal of Public Procurement, 16(1), 1-21.

58.

Soukopová

Vaceková

Klimovský

(2017). Local waste management in the Czech Republic: Limits and merits of public-private partnership and contracting out. Utilities Policy, 48, 201-209.

59.

Spagnolo

(2012). Reputation, competition, and entry in procurement. International Journal of Industrial Organization, 30, 291-296.

60.

Stehlík

(2018). The competitive effect on public procurement for public service contracts: The case of the Czech Republic. Ekonomický časopis, 66, 416-427.

61.

Strand

Ramada

Canton

(2011, March). Public procurement in Europe: Cost and effectiveness (A study on Procurement Regulation. Prepared for the European Commission). Retrieved from https://www.scribd.com/document/234610075/Public-Procurement-in-Europe-Cost-and-Effectiveness

62.

Stuart

Verville

Taskin

(2009). Trust in buyer-supplier relationships: Supplier competency, interpersonal relationships and outcomes. Retrieved from https://pdfs.semanticscholar.org/4740/4e890b48a53c757fbe37f647e7735cb2b645.pdf

63.

Takano

(2017). Public-private partnerships as rent-seeking opportunities: A case study on an unsolicited proposal in Lima, Peru. Utilities Policy, 48, 184-194.

64.

Tkachenko

Yakovlev

Kuznetsova

(2017). “Sweet deals”: State-owned enterprises, corruption and repeated contracts in public procurement. Economic Systems, 41, 52-67.

65.

Transparency International. (2009). Partnerství veřejného a soukromého sektoru v České republice [Public private partnership in the Czech Republic]. Prague, Czech Republic: University of Economics.

66.

Vaceková

Hana

Jana

, (2019). From the third sector to social enterprise: The transformation of civil society in the Czech Republic. In Billis

Rochester

(Eds.), Handbook on hybrid organisations (forthcoming). London, UK: Edward Elgar Publishing.

67.

Verhelst

(2018). Inside the municipal lobby: Explaining local government influence on the new EU public procurement directives. Lex Localis-Journal of Local Self-Government, 16, 193-214.

68.

Yakovlev

Vyglovskiy

Demidova

Bashlyk

(2016). Incentives for repeated contracts in public sector: Empirical study of gasoline procurement in Russia. International Journal of Procurement Management, 9(3). Retrieved from http://www.inderscience.com/offer.php?id=76305