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Working Group on Auction Design and Competitive Issues

Working Group on Auction Design and Competitive Issues. Rome, December 13 th 2004. Matteo Zanza, Consip. Agenda. Final Report already presented in Stockholm 31 Institutions 19 sent back the Questionnaire Some deeper information and new points: Governance of Institutions

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Working Group on Auction Design and Competitive Issues

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  1. Working Group on Auction Design and Competitive Issues Rome, December 13th 2004 Matteo Zanza, Consip

  2. Agenda • Final Report already presented in Stockholm • 31 Institutions 19 sent back the Questionnaire • Some deeper information and new points: • Governance of Institutions • Analysis of Purchased Value over Total Public Procurement • Online Auctions • Abnormally Low Offers

  3. Institutions classified

  4. Purchased Value as percentage of Total Public Procurement To compare different Purchasing Bodies on the basis of their activity SKI A/S (Denmark) (Austria) (Belgium) (Germany) (Italy) (Sweden) (UK) Fonts: GDP: Eurostat; Total Public Procurement as % of GDP: EU Report 2004; Purchased Value: Questionnaires

  5. Online Auctions 7 institutions applied this procedure Three different formats have been applied Sealed Bid auction Descending auction (reverse auction) Multiple round descending auction Below or above thresholds? 5 Institutions performed them both below or above the thresholds Useful tool to improve the procurement performances

  6. Abnormally Low Tender 1/2 Article 51 of the 2004 EU Directive states that “If, for a given contract, tenders appear to be abnormally low in relation to the goods, works or services, the contracting authority shall, before it may reject those tenders, request in writing details of the constituent elements of the tender which it considers relevant”. The Directive defines then which details should be taken into account by the contracting authority. When a tender presents an abnormally low price compared to others tenders, market prices or institution own costs estimation. The contracting authority shall be obliged to invite the tenderer to explain his price quotation. If the firm is not able to justify its offer the latter is considered abnormally low and so rejected.

  7. Abnormally Low Tender 2/2 BESCHA, Consip and the Turkish Public Procurement Authority follow three different additional criteria to identify those firms that have to motivate their offer. If the offer presents a discount lower than 20% of the arithmetical mean of the all discounts considered valid. Consip If the offer presents more than 20% deviation from the second best price. BESCHA If the offer is below of a defined Boundary value obtained multiplying a certain value “K” by the “Estimated cost” of the contract. To have the “K” value, the contracting authority has to calculate the ratio between the arithmetical mean of the tenders (tenders 120% above or 40% below of the “estimated cost” are not taken into account) and the “Estimated cost”. To any value of this ratio between 1.2 and 0.4 there is a correspondent “K” value. Turkish Public Procurement Authority (work contracts)

  8. Back-Up

  9. Turkish Formula Tenders which are over 120% and under 40% of estimated cost are not taken into concentration while calculating the means of the tenders. 1. By dividing the mean by estimated cost the value “C” is obtained 2. By using the table below, “K” is obtained 3. By multiplying the “K” by estimated value, we obtain the boundary value AT = The arithmetic mean of valid tenders EC = Estimated cost calculated by the contracting entity C = AT /EC Boundary Value = K*EC

  10. Domestic GDP

  11. Total Public Procurement I.e. Purchasing of goods, services and works by governments

  12. Purchased Value

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