Yhteishankintojen kustannusvaikuttavuus

Translated title of the contribution: Cost-effectiveness of centralized procurement

Susmita Baulia, Kirsi-Maria Halonen*, Ari Hyytinen*, Heidi Kuusinen, Oskari Nokso-Koivisto, Matias Pousi, Essi Puhakainen, Markku Siikanen*, Janne Tukiainen*, Joosua Virtanen

*Corresponding author for this work

Research output: Book/ReportCommissioned report

Abstract

We evaluate the cost-effectiveness of centralized public procurement (CPP) in Finland using observational data and interviews. Standardized prices for CPP are slightly lower than in decentralized procurement, but the differences are relatively small and rarely statistically significant. CPP has more potential competition, but this is not reflected in the number of bids received. However, the study presents individual examples where CPP is clearly associated with lower prices, and increased competition or reduced favoritism. The results are in line with the previous literature: CPP can result in savings, but the benefits depend on the type of product. Due to data limitations, the statistical power of the analysis is weak. Moreover, comparable prices are rarely observed, and actual realized purchase prices are not observed at all. One of the key results of the study is the documentation of data deficiencies. Evaluating the efficiency and problems of CPP and public procurement is impossible without better data. The availability and utilization of data could be improved at relatively small costs. Based on interviews, CPP can save costs, but the benefits vary depending on the situation and procurement mechanism. Due to the small sample, the different procurement mechanisms cannot be ranked based on the interviews and on the basis of the procurement process costs they generate.
Translated title of the contributionCost-effectiveness of centralized procurement
Original languageFinnish
Place of PublicationHelsinki
PublisherValtioneuvoston kanslia
Number of pages150
ISBN (Electronic)978-952-383-444-6
Publication statusPublished - 2023
MoE publication typeD4 Published development or research report or study

Publication series

NameValtioneuvoston selvitys- ja tutkimustoiminnan julkaisusarja
No.2023:30
ISSN (Electronic)2342-6799

Keywords

  • 511 Economics

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Competition economics and service strategy - Quantitative consumer behaviour and competition economics

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  • Centralized Public Procurement

    Virtanen, J., Baulia, S. & Tukiainen, J.

    03.01.2022 → …

    Project: Externally funded project

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