Competition effects in EU external aid supply tenders funded with the Pre-accession and Neighbourhood instruments

Abstract

This paper investigates empirically the competition effects on procurement costs for Europe Aid funded supply tenders in countries benefiting from the EU Pre-accession (IPA) and Neighbourhood (ENI) financial instruments. We use a dataset created and curated by us from supply tender dossiers published by Europe Aid. We determine a reference price for each procured lot based on the contracting authority’s requirement to establish a participation tender guarantee. We estimate controlling for potential endogeneity how the entry of new bidders in the tendering procedure affects procurement cost savings regarding this reference price. Finally, we discuss the expected additional savings in the management of these funds that may be obtained by further promoting competition.