Optimizing the Size of Public Road Contracts
Procurement packaging has important effects on not only the bidders' bidding behavior, but also contractors' performance. By changing the size of public contracts, procurers can encourage (or discourage) market competition and improve con...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2012/04/16209005/optimizing-size-public-road-contracts http://hdl.handle.net/10986/6030 |
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okr-10986-60302021-04-23T14:02:24Z Optimizing the Size of Public Road Contracts Iimi, Atsushi Benamghar, Radia AUCTION AUCTIONS BANK POLICY BID EVALUATION BID OPENING BIDDER BIDDERS BIDDING DOCUMENTS BIDS CAPACITY CONSTRAINTS CIVIL WORKS CLAUSE COMPETITIVE BIDDING COMPLEX PROJECTS CONTRACT DESIGN CONTRACT PERFORMANCE CONTRACTOR CONTRACTORS COST ESTIMATE CREDIBILITY DECENTRALIZATION DESIGNING CONTRACT DEVELOPING COUNTRIES DUMMY VARIABLE ECONOMIES OF SCALE ENTRY BARRIER EQUIPMENT EVALUATION PROCESS GOVERNMENT EXPENDITURE GOVERNMENT PROCUREMENT GROSS DOMESTIC PRODUCT HIGHWAY IBRD INFRASTRUCTURE CONCESSIONS INFRASTRUCTURE PROJECTS INSTRUMENT INTERNATIONAL BANK LANES LENGTH OF ROAD LENGTH OF ROADS LOCAL CONTRACTORS LOCAL INFRASTRUCTURE MARKET COMPETITION MINISTRY OF ENVIRONMENT NATIONS ORIGINAL CONTRACT PIERS POLITICAL ECONOMY PROCUREMENT PROCUREMENT CONTRACTS PROCUREMENT PLAN PROCUREMENT PLANNING PROCUREMENT PRACTICES PROCUREMENTS PROJECT IMPLEMENTATION PUBLIC PUBLIC CONTRACT PUBLIC CONTRACTS PUBLIC OFFICIALS PUBLIC PROCUREMENT PUBLIC ROAD PUBLIC TENDERS PUBLIC WORKS RECONSTRUCTION REHABILITATION RELEVANT CONTRACTS RENEGOTIATION RESERVE ROAD NETWORK ROAD PROJECTS ROAD SECTOR ROAD STANDARDS RURAL ROADS SANITATION TRANSACTION TRANSACTION COST TRANSPARENCY TRANSPORT TRANSPORT INFRASTRUCTURE TRANSPORT PROJECTS TRANSPORT SECTOR UNEXPECTED EVENTS WINNING BID Procurement packaging has important effects on not only the bidders' bidding behavior, but also contractors' performance. By changing the size of public contracts, procurers can encourage (or discourage) market competition and improve contract performance, avoiding unnecessary cost overruns and project delays. In practice, there is no single solution about how to package public contracts. With procurement data from road projects in Nepal, this paper examines the optimal size of road contracts in rural areas. The optimum varies depending on policy objectives. To maximize the bidder participation, the length of road should be about 11 kilometers. To minimize cost overruns and delays, the contracts should be much larger at 17 and 21 kilometers, respectively. Compared with the current procurement practices, the findings suggest that procurers take more advantage of enlarging road packages, although contracts that are too large may increase the risk of discouraging firms from participating in public tenders. 2012-04-27T07:44:03Z 2012-04-27T07:44:03Z 2012-04 http://documents.worldbank.org/curated/en/2012/04/16209005/optimizing-size-public-road-contracts http://hdl.handle.net/10986/6030 English Policy Research Working Paper ; No. 6028 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia Nepal |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AUCTION AUCTIONS BANK POLICY BID EVALUATION BID OPENING BIDDER BIDDERS BIDDING DOCUMENTS BIDS CAPACITY CONSTRAINTS CIVIL WORKS CLAUSE COMPETITIVE BIDDING COMPLEX PROJECTS CONTRACT DESIGN CONTRACT PERFORMANCE CONTRACTOR CONTRACTORS COST ESTIMATE CREDIBILITY DECENTRALIZATION DESIGNING CONTRACT DEVELOPING COUNTRIES DUMMY VARIABLE ECONOMIES OF SCALE ENTRY BARRIER EQUIPMENT EVALUATION PROCESS GOVERNMENT EXPENDITURE GOVERNMENT PROCUREMENT GROSS DOMESTIC PRODUCT HIGHWAY IBRD INFRASTRUCTURE CONCESSIONS INFRASTRUCTURE PROJECTS INSTRUMENT INTERNATIONAL BANK LANES LENGTH OF ROAD LENGTH OF ROADS LOCAL CONTRACTORS LOCAL INFRASTRUCTURE MARKET COMPETITION MINISTRY OF ENVIRONMENT NATIONS ORIGINAL CONTRACT PIERS POLITICAL ECONOMY PROCUREMENT PROCUREMENT CONTRACTS PROCUREMENT PLAN PROCUREMENT PLANNING PROCUREMENT PRACTICES PROCUREMENTS PROJECT IMPLEMENTATION PUBLIC PUBLIC CONTRACT PUBLIC CONTRACTS PUBLIC OFFICIALS PUBLIC PROCUREMENT PUBLIC ROAD PUBLIC TENDERS PUBLIC WORKS RECONSTRUCTION REHABILITATION RELEVANT CONTRACTS RENEGOTIATION RESERVE ROAD NETWORK ROAD PROJECTS ROAD SECTOR ROAD STANDARDS RURAL ROADS SANITATION TRANSACTION TRANSACTION COST TRANSPARENCY TRANSPORT TRANSPORT INFRASTRUCTURE TRANSPORT PROJECTS TRANSPORT SECTOR UNEXPECTED EVENTS WINNING BID |
| spellingShingle |
AUCTION AUCTIONS BANK POLICY BID EVALUATION BID OPENING BIDDER BIDDERS BIDDING DOCUMENTS BIDS CAPACITY CONSTRAINTS CIVIL WORKS CLAUSE COMPETITIVE BIDDING COMPLEX PROJECTS CONTRACT DESIGN CONTRACT PERFORMANCE CONTRACTOR CONTRACTORS COST ESTIMATE CREDIBILITY DECENTRALIZATION DESIGNING CONTRACT DEVELOPING COUNTRIES DUMMY VARIABLE ECONOMIES OF SCALE ENTRY BARRIER EQUIPMENT EVALUATION PROCESS GOVERNMENT EXPENDITURE GOVERNMENT PROCUREMENT GROSS DOMESTIC PRODUCT HIGHWAY IBRD INFRASTRUCTURE CONCESSIONS INFRASTRUCTURE PROJECTS INSTRUMENT INTERNATIONAL BANK LANES LENGTH OF ROAD LENGTH OF ROADS LOCAL CONTRACTORS LOCAL INFRASTRUCTURE MARKET COMPETITION MINISTRY OF ENVIRONMENT NATIONS ORIGINAL CONTRACT PIERS POLITICAL ECONOMY PROCUREMENT PROCUREMENT CONTRACTS PROCUREMENT PLAN PROCUREMENT PLANNING PROCUREMENT PRACTICES PROCUREMENTS PROJECT IMPLEMENTATION PUBLIC PUBLIC CONTRACT PUBLIC CONTRACTS PUBLIC OFFICIALS PUBLIC PROCUREMENT PUBLIC ROAD PUBLIC TENDERS PUBLIC WORKS RECONSTRUCTION REHABILITATION RELEVANT CONTRACTS RENEGOTIATION RESERVE ROAD NETWORK ROAD PROJECTS ROAD SECTOR ROAD STANDARDS RURAL ROADS SANITATION TRANSACTION TRANSACTION COST TRANSPARENCY TRANSPORT TRANSPORT INFRASTRUCTURE TRANSPORT PROJECTS TRANSPORT SECTOR UNEXPECTED EVENTS WINNING BID Iimi, Atsushi Benamghar, Radia Optimizing the Size of Public Road Contracts |
| geographic_facet |
South Asia Nepal |
| relation |
Policy Research Working Paper ; No. 6028 |
| description |
Procurement packaging has important
effects on not only the bidders' bidding behavior, but
also contractors' performance. By changing the size of
public contracts, procurers can encourage (or discourage)
market competition and improve contract performance,
avoiding unnecessary cost overruns and project delays. In
practice, there is no single solution about how to package
public contracts. With procurement data from road projects
in Nepal, this paper examines the optimal size of road
contracts in rural areas. The optimum varies depending on
policy objectives. To maximize the bidder participation, the
length of road should be about 11 kilometers. To minimize
cost overruns and delays, the contracts should be much
larger at 17 and 21 kilometers, respectively. Compared with
the current procurement practices, the findings suggest that
procurers take more advantage of enlarging road packages,
although contracts that are too large may increase the risk
of discouraging firms from participating in public tenders. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Iimi, Atsushi Benamghar, Radia |
| author_facet |
Iimi, Atsushi Benamghar, Radia |
| author_sort |
Iimi, Atsushi |
| title |
Optimizing the Size of Public Road Contracts |
| title_short |
Optimizing the Size of Public Road Contracts |
| title_full |
Optimizing the Size of Public Road Contracts |
| title_fullStr |
Optimizing the Size of Public Road Contracts |
| title_full_unstemmed |
Optimizing the Size of Public Road Contracts |
| title_sort |
optimizing the size of public road contracts |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2012/04/16209005/optimizing-size-public-road-contracts http://hdl.handle.net/10986/6030 |
| _version_ |
1764397164684902400 |