The Economic Impacts of Applying the Act on Public Procurement as Seen from the Contractors’ Point of View
The Economic Impacts of Applying the Act on Public Procurement as Seen from the Contractors’ Point of View

Author(s): Miroslav Plevný, Radka Součková
Subject(s): Business Economy / Management, Public Finances
Published by: Masarykova univerzita nakladatelství
Keywords: public procurement; contract value; contractor; Czech Republic;
Summary/Abstract: A significant part of the GDP (about 24 billion EUR per year) is allocated through public procurement from public resources in the Czech Republic. There are some changes concerning the obligations of contracting authority as well as contractors after the new act on public procurement came into effect on October 1st 2016. The effort to decrease administrative demandingness is obvious. However, the volume of the contractors’ transaction costs is still quite significant. This article presents some findings regarding the economic impact of that law from the point of view of the contractor, i.e. the tenderer for a public contract. Attention is paid to the calculation of the costs of participation in the procurement procedure that is carried by the contractor and whose return depend on the winning the contract and its realization. The cost of participation in each tender in which the tenderer has failed must be credited to the following contract by the contractor. A sample of 321 public contracts in the Czech Republic dealing with building works has been chosen for the analysis.

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