Public procurement is a complex activity that while respecting legal requirements can be performed poorly or well. Public buyers need to identify and explicitly formulate their needs, balance risks and incentives in the contract, as well as monitor the contractor and manage the contract during the execution phase, which is often long and paved with unforeseen events. If handled badly, public procurement can lead to substantial cost overrun, as well as deficits in the quality of the goods and services provided, some of which are crucial to long-term economic growth.
This report aims at informing the policy debate on what economic research suggests are the most likely causes and most effective remedies for public procurement failures. The author, Giancarlo Spagnolo, professor in economics at Stockholm Institute of Transition Economics (SITE), concludes by offering practical recommendations on how to improve and sustain the level of procurement competence in Sweden.
Cost Overrun and Procurement Competence in Sweden is published as part of SNS research project Sustainable Urban and Rural Planning.