Currently, public purchasing by European entities accounts for approximately 14% of GDP. Within the European Union (EU) and larger European Economic Area (EEA), numerous performance measures are used to assess public procurement processes across countries. The goal of these performance measures, in part, is to understand how efficient and effective certain processes—and thus certain countries—are within the larger paradigm of championing European powers and European integration. With the United Kingdom leaving the EU this past year, effective public purchasing across European countries is arguably now more important than ever.
One such performance measure is transaction time (TT) or the time it takes from the closing of a bid to the awarding of a contract. In 2011, the EU underwent a study on decision speed or purchasing transaction time to find that, on average, a contract did not formally conclude until 180 after its initial bid. Juxtapose this number to the “golden standard” of 120 days, the question remains: why do governments take so long to award contracts across these member state countries?
To answer this question, this research proposes that country context matters. Individual member states are required to transpose and harmonize minimum standards of public procurement processes as outlined by hegemonic Directives. The numerous Directives are designed to—and, as scholarship recognizes, achieves—lower transaction costs, increase transparency, buttress cooperation and collaboration, and overall decrease barriers to trading whether domestic or, especially, cross-border to countries which differ in culture, languages, and country legal standards. Thus, might a contract’s overall transaction time reflect the differences across countries legal frameworks or the extent to which countries share similar processes? Theoretically, contracts should have similar TTs across the united member states who have standardized public procurement processes, as defined by EU Directives. However, this is a lofty and idealized goal; countries are almost undoubtedly going to differ in the degree of their standardization. The question is (1) how much and (2) what are the variables which mediate differences?
In general, the following research question is proposed: “what are the variables which influence differential purchasing transaction time across sampled member state countries?”. To analyze purchasing transaction time across a sample of countries, this study uses multilevel modeling to ascertain if country context is the key determinant for differential TTs. Preliminary OLS models are used to determine the extent of MLM usage, showing if the identified variables do in fact present potential significance. The preliminary null model provides evidence via three statistics (an estimated grand mean for countries’ TT outcomes, the intraclass correlation statistic, and the variance intercept) that supports the fact that there are within-group and between-group variations of variables that may account for differential transaction times across countries. In fact, the preliminary model supports the fact that 33.6% of the total variability in TT outcomes lies between countries.
Please note this project is a collaborative venture with Dr. Eric Prier and Dr. Clifford McCue from Florida Atlantic University. The above analysis looks at the award criteria and contracting authority entity used for medical supply contracts awarded via the open procedure across the years 2010 – 2019 from open-data published annually in the Official Journal of the European Union’s online data portal Tenders Electronic Daily (TED).
Emily Boykin is a first-year Ph.D. student in Public Administration and Policy. Her current research interests explore topics in public procurement, public budgeting and finance, social justice and equity policy, and performance measurement. You can learn more about Emily here.