Analysis of the effect of lowest price criterion in the selection process of public procurement

Blahová, Alexandra

Public procurement in the Czech Republic is a complex process directly settled by the legal procurement framework which defines various contract-awarding procedures. This study focuses on the part of selection process when procurers can decide between using lowest price criterion or most economically advantageous tender (MEAT). We found an evidence of preference of lowest price criterion, especially in the recent years. The main goal of the study is therefore to provide a comprehensive analysis of the leading drivers of selection of specific criteria and their consequential effects. Taking into account various characteristics of public procurement processes, we found out that in general lowest price criterion is preferred by public contracting authorities and by procurers with larger number of employees. This type of selection process also consequently provides an interesting trade-off between higher competition in terms of number of bidders, higher stability in terms of less interventions by the Office for the Protection of Competition (OPC) but also higher probability of consequent extraworks.

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