Inefficient R&D in Public Procurement: Negative Consequences of a Separation between Award and Actual Contract

Dieter Bös

No 208, CESifo Working Paper Series from CESifo

Abstract: In public procur ement a temporal separation between award and actual contract allows private entrepreneurs who did not get the award to sue to become contractor. Hence, not only the award-winning entrepreneur, but also the losers will engage in relationship-specific investments. Unfortunately, in such a situation it is impossible to find fixed prices which guarantee the achievement of both efficient trade and efficient investment.

Keywords: Procurement; Incomplete Contracts (search for similar items in EconPapers)
Date: 1999
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