Maintaining competition in recurrent procurement contracts: A case study on the London bus market. (March 2019)

• Record Type: Journal Article
• Authors: Iossa, Elisabetta; Waterson, Michael
• Is Part Of: Transport policy. Volume 75(2019)
• Page Start: 141
• Page End: 149
• Publication Date: 2019-03
• Subjects: L24 -- L92 -- L40; Dynamic competition -- Procurement and incumbent advantage; Transportation and state -- Periodicals; Transportation -- Rates -- Periodicals; 388
• DOI: 10.1016/j.tranpol.2017.02.012
• Languages: English
• ISSNs: 0967-070X

Abstract

Abstract: Under recurrent procurement, the awarding of a contract to a firm may put it in an advantageous position in future tenders, which may reduce competition over time. The objective of this paper is to study the dynamics of competition for tendered contracts, focusing on factors that may generate incumbent advantage. Particular attention is given to learning economies, sunk costs of entry and switching costs for the procurer. The paper then applies these insights to analyse empirically the evolution of competition in the market for local bus services in London. Highlights: The dynamics of competition for tendered contracts under recurrent procurement. What affects whether competition can be sustained over time. Analysis of over 400 bus routes tendered at least twice by Transport for London.