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Recherches Économiques de Louvain/ Louvain Economic Review Recherches Économiques de Louvain/ Louvain Economic Review

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Small business participation procurement policy: Subcontracting vs Allotment

Published online by Cambridge University Press:  09 January 2015

undefined François Maréchal  and
Pierre-Henri Morand
undefined François Maréchal
Affiliation:
CRESE, University of Franche-Comté, francois.marechal@univ-fcomte.fr
Corresponding
E-mail address:
francois.marechal@univ-fcomte.fr
pierre-henri.morand@univ-fcomte.fr
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Summary

Allotment and subcontracting are the two procedures enabling small businesses to participate in procurement. We compare these two procedures in the context of a procurement contract awarded by a first-price sealed-bid auction. We assume that the public buyer wishes to fulfil two different goals: to minimize expected costs of the contract for the public buyer and to maximize small businesses' profit. We show that, under specific cost-technology conditions we determine, the allotment procedure not only enables extensive participation by small businesses but also can achieve the goal of minimizing expected total costs for the public buyer.

Keywords

small business auction procurement D44 L51 PME enchères marchés publics D44 L51
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 78 , Issue 2 , June 2012 , pp. 5 - 23
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2012

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References

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