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Public Procurement and the Risk of Severe Weather Events

Andrea Bafundi (), Riccardo Camboni (), Edoardo Grillo () and Paola Valbonesi ()
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Andrea Bafundi: University of Padova
Riccardo Camboni: University of Padova
Edoardo Grillo: University of Padova
Paola Valbonesi: University of Padova

No 303, "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno"

Abstract: This paper studies how severe weather events (SWEs) affect the awarding procedures of public procurement contracts. We draw on a large dataset of Italian public procurement tenders for the construction and the maintenance of buildings and roads in the period 2008-2021. We find that municipalities previously hit by SWEs during the execution of procurement works are more likely to adopt procurement procedures that give them discretion in the selection of participating firms. When the firm winning the contract has already worked with the municipality in the past, such discretion reduces the likelihood of time overruns in work completion. Relational contracts aimed at overcoming the contractual incompleteness caused by SWEs can explain the previous findings. In a simple theoretical setting, we show that the public buyer can reward firms that handled past SWEs well by selecting them as participants in future tenders.

Keywords: Public procurement; relational contract; severe weather events (search for similar items in EconPapers)
Pages: 42 pages
Date: 2023-05
New Economics Papers: this item is included in nep-cta, nep-env and nep-eur
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