Out of sight, out of mind? Supplier spatial proximity in French public procurement

Abstract

Purpose – The purpose of this paper is to study the impact of spatial proximity on supplier selection in the French public sector. While French public procurement legislation forbids consideration of supplier location in the procurement process, public contractors may still rely on spatial proximity for complex transactions necessitating mutual adjustments with suppliers. Design/methodology/approach – Using French Official Journals (BOAMP), the authors compiled 565,557 transactions completed on three public procurement markets between 6,182 contractors and 26,570 suppliers, over a period of six years (between 2006 and 2011). The authors conducted a two-level hierarchical linear auto-regression analysis and a feature evaluation analysis for all transactions. Findings – The paper finds significant variation between the transactions on different markets: a negative effect of spatial proximity on the number of contract notices in the public market and a positive effect of spatial proximity on the number of notices in the services and supplies markets. The difference lies in the levels of mutual adjustment required to optimally manage the relationship between public contractor and supplier. Research limitations/implications – The research is based on an econometric analysis conducted uniquely in the French context, which calls into question the external validity of the results obtained. The study also rests on segmentation into three aggregate markets, which might be considered too general. Originality/value – Rather than analyze public contractors’ perceptions of the importance of the criterion of spatial proximity, the paper examines 565,557 actual transactions. The results point to the emergence of a new type of relationship with certain suppliers, which should lead public contractors to integrate relationship management competencies, in addition to legal and economic competencies, in the organization of calls for tenders.

Local economic development opportunities from NHS spending: Evidence from Wales

“…Figure 2 shows a greater probability of regional purchasing outside of these specialist demand areas, in food and drink, printing and publishing, utilities, construction (operational not capital spending here), hotels and catering, transport and communications and other services. This result is consistent with research by Mamavi et al (2014), although note that Mamavi et al investigated the numbers of contracts in spatial proximity, compared with this analysis of expenditure values. An issue of economic development interest is the likelihood of reducing import dependence in selected sectors in Figure 2, and how far the import propensities exemplify real supply gaps in the local and regional economy.…”

“…Examples of these packages include, buffer rails, entrance canopies and audiology. Whilst closer working relationships might be expected with suppliers in this sector (Mamavi et al, 2014), this illustrates that in some cases, and depending on the nature of products required, the drive for cost savings may outweigh any benefits of spatial proximity.…”

“…The sectoral or market dimension was also significant in the work of Mamavi et al (2014), who examined spatial proximity in supplier selection in French public procurement. They examined whether proximity was important in procurement decision-making, with proximity considered an ‘important dimension of supplier relationship management’ (Mamavi et al, 2014: 490).…”

“…The sectoral or market dimension was also significant in the work of Mamavi et al (2014), who examined spatial proximity in supplier selection in French public procurement. They examined whether proximity was important in procurement decision-making, with proximity considered an ‘important dimension of supplier relationship management’ (Mamavi et al, 2014: 490). Mamavi et al assert that there has been some rediscovery of the ‘virtues of spatial proximity in effective governance of inter-organisational relationship’ (Mamavi et al, 2014: 492).…”

“…They examined whether proximity was important in procurement decision-making, with proximity considered an ‘important dimension of supplier relationship management’ (Mamavi et al, 2014: 490). Mamavi et al assert that there has been some rediscovery of the ‘virtues of spatial proximity in effective governance of inter-organisational relationship’ (Mamavi et al, 2014: 492). The proximity issue was tied to the degree of flexibility and adjustments needed in the management of the supplier and public contractor relationship.…”