Procurement

About: Procurement is a research topic. Over the lifetime, 25669 publications have been published within this topic receiving 334145 citations.

Collective procurement management system

Abstract: A collective procurement management system which permits multiple potential purchasers of a specific item or service to submit orders for the item or service on an ongoing basis. As orders enter the system, they are grouped such that potential purchasers are may “cooperate” in generating a collective bulk order so that all participants may obtain discount/volume pricing. Once a threshold level of order volume is obtained as a result of multiple orders, the grouped order is submitted to the supplier for fulfillment. The order is then fulfilled at a volume pricing level although individual portions of the collective order are routed to a plurality of purchasers. The present invention also includes a Reverse Auction Process (RAP) which, in one embodiment, operates to allow potential purchasers to select a product or service and set a maximum price that they are willing to pay for the same. Following submission of this information to the system, possibly including orders for the same item from other potential buyers, potential vendors bid to supply the item to the relevant buyers requesting the item.

Reliability and Competitive Electricity Markets

Abstract: Despite all of the talk about “deregulation” of the electricity sector, a large number of non-market mechanisms have been imposed on emerging competitive wholesale and retail markets. These mechanisms include spot market price caps, operating reserve requirements, non-price rationing protocols, and administrative protocols for managing system emergencies. Many of these mechanisms have been carried over from the old regime of regulated monopoly and continue to be justified as necessary responses to market imperfections of various kinds and engineering requirements dictated by the special physical attributes of electric power networks. This paper seeks to bridge the gap between economists focused on designing competitive market mechanisms and engineers focused on the physical attributes and engineering requirements they perceive as being needed for operating a reliable electric power system. The paper starts by deriving the optimal prices and investment program when there are price-insensitive retail consumers, and their load serving entities can choose any level of rationing they prefer contingent on real time prices. It then examines the assumptions required for a competitive wholesale and retail market to achieve this optimal price and investment program. The paper analyses the implications of relaxing several of these assumptions. First, it analyzes the interrelationships between regulator-imposed price caps, capacity obligations, and system operator procurement, dispatch and compensation arrangements. It goes on to explore the implications of potential network collapses, the concomitant need for operating reserve requirements and whether market prices will provide incentives for investments consistent with these reserve requirements.

Awarding Price, Contract Performance, and Bids Screening: Evidence from Procurement Auctions †

Abstract: This paper presents evidence on the perverse trade-off that first price auctions induce between low prices at the awarding stage and poor ex post performance when bids are not binding commitments. By exploiting the different timing with which first price auctions were introduced in Italy to procure public works, this study finds that at least half of the cost savings from lower winning prices are lost because of ex post renegotiation. Screening the lowest price bid for its responsiveness prevents performance worsening but also reduces the initial cost savings by a third and induces delays in awarding the contract. (JEL D44, H54, H57, R42)