Zusammenfassung
Procurement is plagued by bankruptcy. In the United States more than 80,000 contractors went bankrupt between 1990 and 1997, leaving unfinished private and public construction projects with liabilities exceeding US 21 billion (Cited from Calveras et al., 2004). Bankruptcy is very costly for the buyer: the direct bankruptcy costs (e.g. administrative costs or lawyers) vary between 7.5% and 20% of the liquidation proceeds, indirect costs (e.g. delays and other losses) are estimated to be even larger (see White, 1989). Bankruptcy may arise when the payment (and therefore the winning bid) lies below the possible realized cost of the project. Why are suppliers willing to bid below possible realized cost of the project? There are three main answers to this question. (i) The winning supplier underestimates the cost and bids too optimistically. This effect is known as the winner's curse and is discussed in any standard auction theory book (see e.g. Krishna, 2002). (ii) The selected supplier expects to renegotiate the contract later on when it is very costly for the buyer to replace the incumbent contractor. This renegotiation generates cost overruns for the buyer and rents for the incumbent that are discounted in the bid.
This paper has drawn heavily upon material from Andreas Engel, Juan-Jose’ Ganuza, Esther Hauk and Achim Wambach, “Managing risky bids”, pp. 322-346, in Nicola Dimitri, Gustavo Piga, Giancarlo Spagnolo (eds), Handbook of Procurement, (2006) © Cambridge University Press 2006, reproduced with permission.
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Engel, A.R. (2009). Procurement Auctions and the Risk of Bankrupt Bidders. In: Bogaschewsky, R., Eßig, M., Lasch, R., Stölzle, W. (eds) Supply Management Research. Gabler. https://doi.org/10.1007/978-3-8349-8796-9_2
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