Cost Efficiency of Public Procurement at Local Level: Chances for Improvement of Local Self-government and Public Enterprises in Serbia

Abstract

This paper analyses cost efficiency of the public procurement process at local level. Data is gathered in the Serbian environment, and our main hypothesis is that efficiency of public procurement can be improved significantly by the practices of organizational design and external benchmarking, measured by transaction costs. In order to prove this hypothesis, we have described case of major inefficiencies during public procurement process, and then analyzed efficiency of public procurement process, measured in hours per public procurement on a basis of 185.305 directly invested hours, during 18 months period in eight public enterprises. We have shown by statistical analysis that very wide, statistically significant (p

Public Procurement Transaction Costs: A Country-Level Assessment Based on Microdata

“…Pavel (2018) evaluated the private transaction costs of participating in tenders and the main factors impacting their value, based on questionnaire results (804 observations). An attempt to analyse the cost efficiency of the public procurement process at local level was made on Serbian data (Jasko et al, 2015). Administrative cost savings with the use of micro data is measured in Singer et al (2009) for analysing the efficiency of a new electronic system of public procurement in Chile.…”

“…Notwithstanding the increased recognition of the importance and relevance of the issue of public procurement costs, few empirical studies have been conducted to explore it. Most of the existing ones focused on assessment of the costs of an organization or project (see, e.g., Gardenal, 2013;Jasko, Jovanovic and Cudanov, 2015;Costantino et al, 2012, Balaeva andYakovlev, 2017).…”

Fiscal Decentralization – City of Belgrade Case Study

“…Transaction costs may be defined as costs related to the activity that need to be performed to transfer a specific product or service from one organizational system into another (Jaško, Čudanov, Jevtić & Krivokapić, 2013), and in case of public procurement, from bidder to contracting authority (Jaško, Jovanović & Čudanov, 2015).…”

Estimation of costs in the Russian public procurement system

“…In accordance for this model the elapsed time per procedure (in working days) is the KPI for measuring the efficiency of purchasing and HR employed per procedure is the KPI for measuring the effectiveness. The Serbian authors (Jasko et al, 2015) analyse the cost efficiency of the public procurement process at local level. The efficiency measured in hours per public procurement on a basis of directly invested hours in the public Serbian enterprises.…”

“…While the benefits have been the focus of attention, the administrative costs borne by the main participants in the procurement process -customers, suppliers, and regulators -have been disregarded. Meanwhile, conducting the public procurement policy requires knowledge on these costs, and identifying the biggest generators of costs, in order to take measures aimed at reducing the costs and increasing the costeffectiveness of public procurement procedures (Jasko et al, 2015). Experts argue, however, that such costs can be high, making some procurement procedures inefficient (especially for small purchases).…”