What explains delays in public procurement decisions?

He, Chusu; Milne, Alistair and Ataullah, Ali (2023). What explains delays in public procurement decisions? Economic Modelling, article no. 106201.

DOI: https://doi.org/10.1016/j.econmod.2023.106201

Abstract

Delays in contractor selection are widespread and often costly in public procurement. This paper is the first thorough empirical examination of a common view held by practitioners and in the theoretical literature that negotiation as a selection process causes delay. We adapt an established framework of decision-making process in the wider organisation literature to identify the determinants of decision speed in public procurement. Employing data for all UK public procurement contracts during 2009-2015, our results using both logit models and duration analysis suggest that organisational factors (e.g. the centralisation of procurement) and contract features (e.g. contract complexity) account better for delay. We also find that the choice of simpler procurement procedures, whether these involve negotiation or not, can reduce the decision time. Such time efficiency further justifies the use of negotiation for complex contracts, where this procedure has been proved cost-efficient.

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