ECONOMICS OF PROCUREMENT

Nicola Dimitri (Coordinator)

Start Day: Mon 31March

End Day:  Fri 04 April

Objectives

The module aims at exposing the students to the most important strategic aspects of procurement design. The focus will be mainly, though not exclusively, on the economics of procurement. The following are some of the main topics discussed in the module:

  • Strategic reasoning in procurements.
  • Procurement centralization.
  • Negotiations versus competitions.
  • Risk sharing and procurement contracting strategies.
  • Secret offer versus dynamic competitive tendering. 
  • Best value for money and scoring rules.
  • Procurement with multiple lots.
  • Abnormally low tenders.
  • Collusion and corruption in procurement.
  • Fostering participation in procurement competitions.
  • Reputation in procurement.

Students’ understanding of the module will be tested in two ways. They will have to discuss a small project on how to design the economics of a procurement call. Then, to further ascertain their knowledge, they will have to take a paper answering few specific questions.

At the end of the module students will be acquainted with the main economic elements of procurement design, and will be able to reason on how to provide the right incentives to deliver best value for money, in a dynamic perspective.

 

Lecturer 1

Nicola Dimitri

Date March 31, April 1,2 and 3: hours 10.00-1.00 and 2.00-5.00

Lecture Content

 

Lecturer 2

Gian Lugi Albano

Date April 4: 10.00- 1.00 and 2.00-5.00

Lecture Content

 

 

EXAM MODALITY:

Available Time:

3 hours (2 hours for Prof. Dimitri, 1 hour for Prof. Albano)

Date:

The exam will be held on May 24th, 2014.

 

The part of Prof. Dimitri will be made of 10 such questions

Note: Answers need a short explanation (in the space below the question, or if the space is not enough in the back of the sheet). Without (even a short) explanation the answer will not be considered valid.

During the exam it is possible to consult only the slides without any notes. Every translator devices are allowed.
 

3 SAMPLE QUESTIONS CONCERNING THE PART BY Prof. Nicola Dimitri                       

(Legenda: CA= contracting authority)

                             

Question 1

In a procurement contract, division in lots of a contract:

a) always discourages participation of SMEs;
b) always increase savings with respect to the maximum price specified in the public call;
c) always encourages participation of large firms;
d) can decrease efficiency and increase savings;
e) none of the above is correct. 


Question 2

In procurement competitive tendering the “second lowest price” Vickrey Auction:

a) always induces cautious price offers;
b) can induce bidders to reveal their own contract delivery costs;
c) always discourages firms to reveal their own contract delivery costs;
d) for the CA it is likely to produce always the same results as the lowest price auction;
e) none of the above is correct.

Question 3

Centralization of procurement contracts is recommended:

a) to increase quality but not price discounts;
b) with standardized goods-services to increase their quality;
c) with standardized goods-services to mitigate excess of price competition;
d) to increase price savings;
e) none of the above is correct.

 

Department of Economics and Finance
University of Rome "Tor Vergata"
Via Columbia 2, 00133 Roma

Director
Prof. Gustavo Piga
gustavo.piga@uniroma2.it

Executive Director
Prof. Annalisa Castelli
annalisa.castelli@uniroma2.it

Distance Learning Coordinator
Prof. Andrea Appolloni
andrea.appolloni@uniroma2.it

Secretariat
Cristina Cerri / Simona Rippo
cerri@economia.uniroma2.it
simona.rippo@uniroma2.it

Phone: +39 06 7259 5942
Fax: +39 06 2020 500
public.procurement@uniroma2.it.

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