Joint Procurement: An Economics and Management Perspective

This chapter introduces the general concept of joint procurement from an economics and management perspective. The aim of this chapter is to provide general insights regarding how choices made by contracting authorities regarding different forms of joint procurement affect contracting authorities, suppliers and markets. To this end, we first describe impediments, advantages and disadvantages of joint procurement in terms of economies of scale, economies of process, and economies of knowledge or information. Next, we describe different forms of joint procurement and we discuss the concept of competition between joint procurement initiatives. Allowing competition is important to prevent market inefficiencies and to stimulate optimal quality delivery by the joint initiatives. But preferably, joint procurement initiatives are not competing on the level of individual tenders. We conclude that there seems to be a large potential in the EU for more joint procurement, either in the form of CPBs or in other forms of joint procurement.