Factors Determining the Efficiency of Slovak Public Procurement

Abstract

Abstract Many studies analyse factors (such as corruption, competitiveness, transaction costs), which are influencing public procurement efficiency. The purpose of this paper is to find out, what the main factors are in Slovakia that are influencing public procurement efficiency, and based on our analysis, we will also estimate what is the impact of each factor on the efficiency of public procurement in Slovakia. The research for this paper was executed in three stages. We began with a small number of face-to-face in-depth interviews with specialist procurement advisors to contracting authorities. In the second stage, we created draft questionnaires for contracting authorities and for suppliers, and once we tested questionnaires, it was sent to 13,571 suppliers and to 4,300 contracting authorities. In the last stage, we used various types of analyses to examine identified factors. There is significant agreement between suppliers and contractors that the two main factors causing inefficiencies are excessive bureaucracy and corruption or other ethical shortcomings. It is shown that insufficient competition, and the excessive use of the lowest price criterion for selecting winning bids, add further inefficiencies. Savings are greatest when there are between 6 and 8 bidders. E-auctions generally produce larger savings than more traditional methods, but Slovak procurement procedures are costly, compared to most other EU states. This paper contributes to the understanding of what are the core factors which may influence public procurement efficiency. It also provides valuable information for government officials on how to change public procurement rules in order to achieve higher efficiency.