What Allotment and Subcontracting in Procurement Bidding

Allotment and subcontracting are the two alternative mechanisms enabling the participation of SMEs in procurement. We compare these two alternatives in the context of a procurement contract awarded by a first-price sealed-bid auction. When the winning large firm is constrained with respect to the degree of subcontracting, we show that only a reduction of the chosen SME's profit can reduce the expected cost of the contract. However, when the large firm is allowed to choose the subcontracting level, subcontracting can be a Pareto dominating mechanism, i.e. simultaneously increasing both firms' profits and reducing the expected total cost of the contract.allotment; subcontracting; procurement; bidding

The Sales of Small firms : a multidimensional analysis

Working Paper du GATE 2001-02This paper endogeneizes the security voting structure in an auction mechanism used to sell a small firm. The design of security voting structure allows the seller to choose between two objectives which are not mutually consistent. If the seller wants to maximize his revenue, he should retain some shares to benefit from the future dividends generated by the acquirer. At the opposite, if he wants to sell his firm to the most efficient candidate, he should sell all the shares.Ce papier étudie une procédure particulière de vente de PME, l'open-bid, dans laquelle nous endogénéisons la structure en droits de vote des actifs financiers. Cette procédure de vente se rapproche d'une enchère ascendante. Le vendeur peut avoir deux objectifs divergents: maximiser son revenu et assurer la pérennité de son entreprise. Le premier objectif est atteint si le vendeur conserve une partie des parts de l'entreprise afin de tirer bénéfices des dividendes futurs réalisés par le repreneur. Le second objectif implique la vente de la totalité des parts de l'entreprise

The Sales of Small firms : a multidimensional analysis

This paper endogeneizes the security voting structure in an auction mechanism used to sell a small firm. The design of security voting structure allows the seller to choose between two objectives which are not mutually consistent. If the seller wants to maximize his revenue, he should retain some shares to benefit from the future dividends generated by the acquirer. At the opposite, if he wants to sell his firm to the most efficient candidate, he should sell all the shares.auctions; security voting structure; small firms

Efficient procurement with quality concerns

In this paper, we design the optimal procurement mechanisms when bidders are privately informed on efficiency and on observable but neither verifiable nor contractible quality. We show that most of the optimal procurement institutions are mixed procedure implying both separation and pooling. Thus, the existing takc-it-or-leave-it offers and procurement auc-tion appear only as polar cases. Moreover, we show that separation and pooling may affect the allocative efficiency of the procurement in a counter-intuitive way, such that a less bunching niechanism can be a more inefficient one.Mechanism design, procurement, non-contractible quality

La commande publique par enchère électronique inversée

La récente réforme du Code des marchés publics prévoit l’usage de procédures d’enchères électroniques inversées. Sur la base des résultats récents de la littérature économique, cet article présente les avantages et inconvénients d’une telle réforme, en terme de prix de passation, d’efficacité allocative et de sensibilité à la collusion. En analysant à la fois le contexte d’une attribution d’un seul lot ou de plusieurs, selon le critère du prix ou de l’offre économiquement la plus avantageuse, cet article met en lumière l’importance d’une définition préalable rigoureuse des règles de l’enchère électronique inversée.The last reform of the French procurement regulation has introduced the possibility of awarding the contracts by means of electronic reverse auctions. According to recent literature, this article presents the benefits and drawbacks of electronic reverse auctions, in terms of expected costs and efficiency as well as the vulnerability to collusion. We consider different environments, single or multi-unit auctions and multi-attribute auctions. This article shows that the optimal design of electronic reverse auctions is very sensitive to details. This emphasizes the necessity to carefully design these auctions

Subsidy Bidding Wars and the Structure of Multi-Plant Firms

Governments spend large amounts of money to attract firms to their territory, often resulting from bidding wars against other regions. Previous papers show that such bidding wars can improve social welfare by allocating the investment to the regions that value it the most. In this paper, we depart from the usual assumption of exogenous, single-plant investment. We show that in this context, bidding wars incite the firm to allocate its investment strategically, by investing more and differentiating the plants. In turn, the firm receives larger subsidies. Despite these distortions, bidding wars may remain socially optimal, as in simpler models.nonPeerReviewe

L'enchère électronique inversée : analyse économique

National audienc

Les enchères électroniques et les marchés publics

National audienc

Accès des PME aux marchés publics: allotissement ou groupement?

International audienceno abstrac

SMEs and public procurement policy

International audienceno abstrac