The role of firms' qualification in public contracts execution: An empirical assessment

Abstract

According to the Italian regulation firms must qualify to bid in auctions for public work contracts worth more than 150,000 euros. In this paper, we investigate the link between the efficiency of infrastructure provision, and the Italian regulation concerning the firm's entry and qualification system, employing a large dataset on Italian public works contracts for roads and highways. First, firm's efficiency in public contracts' execution is estimated using a smoothed data envelopment analysis (DEA) bootstrap procedure. Then, the effects of the qualification system on firm's efficiency is evaluated using a semi-parametric technique that produces a robust inference for an unknown serial correlation between efficiency scores. Our analysis shows that fully qualified firms perform better than partially qualified firms.