Can We Have Both? The Challenges of Efficiency Outcomes in a Public Procurement System and Reaching the Strategic Goals of Procurement

Abstract

This article explores the cost efficiency of public procurement procedures, techniques and strategic policies. Member States in the EU spend large sums of money on the procurement of various items, yet public procurement in the EU struggles with issues of competitiveness, efficiency and overlapping goals. The competitiveness and efficiency of various factors, procedures, techniques and sustainable measures employed in public procurement procedures that influence cost efficiency were examined in this study using data from Slovenian public procurement over the past eight years. The analysis employed a binary logit model that facilitates the efficient utilization of public funds and predicts substantial price reductions in public procurement procedures. The findings underscore the significance of transparency and open markets. The optimal cost-efficiency outcomes are achieved through combinations of transparent procedures and an undisclosed market environment during the tendering phase, complemented by less binding secondary procurement objectives. Conversely, procurement techniques that tend to disclose more information about competitors in the procurement process are found to be less cost-effective. Non-mandatory sustainable policies in public procurement tend to lead to better results in terms of cost efficiency than those imposed by an obligatory legal framework.