Stimulating the Use of Informal Contract Mechanisms in the Public Procurement System in Russia (HSE University, April 7–8, 2010)

Abstract

The Russian public procurement system places serious restrictions on the choice of competitive procedure, form of the contract and enforcement strategy applied by the procurer. In this paper we present a theoretical model of a sealed bid fi rst price auction that refl ects these restrictions. Our model implies that the procurer oft en may reach an effi cient result of the competitive procedure only by breaking the restrictions forced to it by law, either by eliminating the suppliers with the low bids or using additional information about the supplier’s type in the bid assessment process.