23(34)
The large variations found among the procuring entities can be explained
by differences in efficiency. The municipality of Jönköping has rationalized
procurement management and it applies electronic procurement without
exception. The municipality of Örebro also supplied a detailed
decomposition of costs, which makes the lower bound of approximately
2 000 EUR credible.
Based on the last-mentioned decomposition, it is also possible to estimate
the additional cost from the procurement regulatory framework. Recall that
some of the costs reported are incurred even in the absence of such a
framework, given that any purchase of services or goods requires that the
object to be purchased must be specified with regard to quality, quantity,
time of delivery, and so on. By focusing on the simplest possible
procurement, the municipality estimated that one half, that is 1 000 EUR,
is a basic cost associated with direct procurement, while the other half is
caused by the procurement framework.
A background report for the Public Commission on Public Procurement
working in Sweden between 2010 and 2013 makes similar estimates based
on a broader survey (Holm 2011). The response frequency was 36.4
percent, which raises some doubt about whether the result is biased.
However, there is another, deeper source of doubt in the fact that the
agencies and municipalities now recognize that their answers will be used in
the preparation of a possibly new threshold value and that they therefore
exaggerate their costs. Anyhow, the average additional cost emerging from
this survey, computed as the difference between the cost of direct
procurement and the cost of the simplified procedure, is about 1 400 EUR.
In summary, these estimates are not too different from that obtained in the
present limited survey, given that the cited figure pertains to projects that
are on average larger and that the two surveys were carried out a few
years apart.
The costs among
suppliers
were estimated based on a questionnaire
answered by 100 companies in four sectors (IT services, facilities
management, medical equipment, and general consultancy), with the
number of employees ranging between 3 and 30. The financial cost ranges
from typically 2 700 EUR for simple tenders to 9 300 EUR for more
demanding ones. In relation to the contract value, the costs are typically of
the order of 1 percent, but they may be substantially higher if the tenderer
is very interested and also feels reasonably sure of winning the contract.
The argument for including supplier costs in the analysis is weak, however.
Firms taking part in procurement competition regard the costs associated
with tendering as part of normal business. That some expenditure items are
not associated with immediate revenues is typical and firms adapt their
pricing to overall costs.
Costs in the
supervising agency
are small in relation to the total
procurement volume. The same can be said for the costs of
legal
procedures
, given that only a small proportion of all procurements are
taken to court.
