scholarly journals A real options model to determine the optimal contractual penalty for a BOT project

2021 ◽  
Author(s):  
João A. Ribeiro ◽  
Paulo J. Pereira ◽  
Elísio M. Brandão
Keyword(s):  
Public Procurement ◽  
Private Firm ◽  
Social Costs ◽  
Government Grants ◽  
Comparative Efficiency ◽  
Optimal Value ◽  
Efficiency Factors ◽  
Private Entity ◽  
The Government ◽  
Contract Form

Public-Private Partnerships (PPP) became one of the most common types of public procurement arrangements and Build-Own-Transfer (BOT) projects, awarded through adequate bidding competitions, have been increasingly promoted by governments. The theoretical model herein proposed is based on a contractual framework where the government grants leeway to the private entity regarding the timing for project implementation. However, the government is aware that delaying the beginning of operations will lead to the emergence of social costs, i.e., the costs that result from the corresponding loss of social welfare. This fact should motivate the government to include a contractual penalty in case the private firm does not implement the project immediately. The government also recognizes that the private entity is more efficient in constructing the project facility and also in running the subsequent operations. The model’s outcome is the optimal value for the legal penalty the government should include in the contract form. Sensitivity analysis reveals that there is a level for each of the comparative efficiency factors above which there is no need to impose a contractual penalty, for a given level of social costs. Finally, the effects of including a non-optimal penalty value in the contract form, which derives from overestimating or underestimating the selected bidder’s real comparative efficiency are examined, using a numerical example. Results demonstrate that overestimating (underestimating) the selected bidder’s real comparative efficiency leads to the inclusion of a below-optimal (above-optimal) value for the legal penalty in the contract and produces effects the government should prevent by estimating the comparative efficiency factors with full accurac.

scholarly journals Corporate Profit Tax and Strategic Corporate Social Responsibility Under Foreign Acquisition

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Lili Xu ◽  
Sang-Ho Lee
Keyword(s):  
Corporate Social Responsibility ◽  
Nash Equilibrium ◽  
Social Responsibility ◽  
Corporate Tax ◽  
Government Grants ◽  
Corporate Profit ◽  
Foreign Acquisition ◽  
Strategic Csr ◽  
The Government ◽  
Corporate Social

Abstract This study investigates government public policies facing competing firms’ strategic corporate social responsibility (CSR) activities and finds that the choice of CSR crucially depends on corporate profit tax. We demonstrate that strategic CSR decreases while social welfare increases with corporate tax. When the government grants uniform output subsidies, we show that bilateral CSR leads to a lower CSR level than under unilateral CSR but bilateral CSR is always beneficial to society. However, when the government grants discriminatory output subsidies which yield different levels of unilateral CSR, we show that domestic CSR leads to a lower CSR level than under foreign CSR. In an endogenous CSR choice game, domestic CSR (no CSR) is a Nash equilibrium when corporate tax is low (high) under the uniform subsidy, while foreign CSR could be a Nash equilibrium when corporate tax is low under the discriminatory subsidy.

scholarly journals Non-Price Criteria for the Evaluation of the Tender Offers in Public Procurement of Ukraine

2020 ◽  
Vol 8 (3) ◽  
pp. 44
Author(s):  
Alexander Baranovsky ◽  
Nataliia Tkachenko ◽  
Vladimer Glonti ◽  
Valentyna Levchenko ◽  
Kateryna Bogatyrova ◽  
...  
Keyword(s):  
Public Procurement ◽  
Well Being ◽  
Gdp Per Capita ◽  
Tender Offers ◽  
Product Categories ◽  
Per Capita ◽  
The Government ◽  
The Impact ◽  
Over Time ◽  
The Eu

Traditionally, public procurement has been associated with the measurement of achieving savings. However, recent research shows that the economic impact of public procurement is not limited only to savings, but by measuring the impact of four capitals—natural, human, social, and economic—on sustainable well-being over time. Ukraine is a country with a very low gross domestic product (GDP) per capita, which exacerbates the problem of the impact of public procurement results on the population’s welfare. Ukrainian public procurement legislation allows customers to apply non-price criteria (the share of non-price criteria cannot be more than 70%), which, together, are taken into account in the formula of the quoted price. The studies show that the effect of the use of non-price criteria depends on the relevance of the method of the evaluation of non-price criteria. The most important non-price criteria for Ukrainian customers by product categories and the methods of their evaluation are analyzed according to the Bi.prozorro.org analytics module. Therefore, it is concluded that the quoted price method, which is used in Ukrainian practice, is not relevant in comparison with the method used in the EU. A survey of the government buyers on the practice of applying non-price criteria was conducted, and the areas of their use were identified.

The framework of data-driven and multi-criteria decision-making for detecting unbalanced bidding

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Huimin Li ◽  
Limin Su ◽  
Jian Zuo ◽  
Xiaowei An ◽  
Guanghua Dong ◽  
...  
Keyword(s):  
Decision Making ◽  
Distance Measure ◽  
Public Procurement ◽  
Unit Price ◽  
Data Driven ◽  
Relative Distance ◽  
Multi Criteria Decision Making ◽  
Ideal Solution ◽  
Content Type ◽  
The Government

PurposeUnbalanced bidding can seriously imposed the government from obtaining the best value for the taxpayers' money in public procurement since it increases the owner's cost and decreases the fairness of the competitive bidding process. How to detect an unbalanced bid is a challenging task faced by theoretical researchers and practical actors. This study aims to develop an identification method of unbalanced bidding in the construction industry.Design/methodology/approachThe identification of unbalanced bidding is considered as a multi-criteria decision-making (MCDM) problem. A data-driven unit price database from the historical bidding document is built to present the reference unit prices as benchmarks. According to the proposed extended TOPSIS method, the data-driven unit price is chosen as the positive ideal solution, and the unit price that has the furthest absolute distance measure as the negative ideal solution. The concept of relative distance is introduced to measure the distances between positive and negative ideal solutions and each bidding unit price. The unbalanced bidding degree is ranked by means of relative distance.FindingsThe proposed model can be used for the quantitative evaluation of unbalanced bidding from a decision-making perspective. The identification process is developed according to the decision-making process. The finding shows that the model will support owners to efficiently and effectively identify unbalanced bidding in the bid evaluation stage.Originality/valueThe data-driven reference unit prices improve the accuracy of the benchmark to evaluate the unbalanced bidding. The extended TOPSIS model is applied to identify unbalanced bidding; the owners can undertake objective decision-making to identify and prevent unbalanced bidding at the stage of procurement.

Ökologische Aspekte im öffentlich-rechtlichen Beschaffungswesen

2021 ◽  
Author(s):  
Felix Steengrafe
Keyword(s):  
International Law ◽  
Public Procurement ◽  
German Law ◽  
Government Procurement ◽  
Environmental Concerns ◽  
European Law ◽  
Environmental Criteria ◽  
The Government ◽  
Model Law ◽  
The Government Procurement

The awarding of public contracts is of considerable economic importance and for this reason can be used to promote environmental concerns. The present work examines whether environmental criteria may be taken into account in the context of public procurement. To answer this question, the Government Procurement Agreement and the UNICTRAL Model Law on Public Procurement are considered at the level of international law. In European law, the primary as well as the relevant secondary law requirements and, in German law, the Cartel and Budget Procurement Law are assessed. This analysis also includes the interactions between the three levels.

The “Surge Phenomenon” of Macro Economy in Developing Countries from the Perspective of Tobacco Economy

2021 ◽  
Vol 7 (4) ◽  
pp. 663-673
Author(s):  
Lulu Liu
Keyword(s):  
Developing Countries ◽  
Tobacco Industry ◽  
Investment Decision ◽  
Relevant Literature ◽  
Economic Benefits ◽  
Social Costs ◽  
Advantages And Disadvantages ◽  
The Social ◽  
The Government ◽  
The Impact

Objectives: Starting from the tobacco economy, this paper studies the “surge phenomenon” of macro-economy in developing countries. Methods: This paper studies the impact of tobacco industry on Anhui economy by using the relevant theories of industrial economics, econometrics and regulatory economics, combined with the actual situation of tobacco industry. Based on the analysis of the overall development of tobacco industry, this paper empirically analyzes the relationship between tobacco industry and Anhui economic growth. This paper combs the relevant literature of the existing research results of this theory. Combined with the special fact that government investment accounts for a large proportion in China’s current economic construction, this paper redefines the hypothesis of the investor in the theory of principles. On this basis, the expected equilibrium results of enterprise investment decision-making under government led and market led modes are compared and analyzed by using incomplete information static game model. Results: When the output value of tobacco industry increases by 1%, it will drive the GDP to increase by 0.373%. Secondly, by comparing the economic benefits of tobacco with the social costs of tobacco, it is found that with the economic development, the social costs caused by tobacco increase year by year, but the economic benefits are slightly greater than the social costs. The difference between the two is also increasing year by year. Conclusion: In the context of tobacco control, we should fully consider the advantages and disadvantages of developing the tobacco industry. Under the excessive intervention of the government, the manifestation of the surge phenomenon is more intense, and the final consequence of overcapacity is more serious than that under the market-oriented mode..

scholarly journals FOREIGN EXPERIENCE IN REGULATING THE PUBLIC PROCUREMENT SYSTEM

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Yernur Mukhtar ◽  
Yuri Toluev
Keyword(s):  
System Analysis ◽  
Public Procurement ◽  
Economic Assessment ◽  
Developed Countries ◽  
Scientific Article ◽  
Regional Institutions ◽  
The Public ◽  
Foreign Experience ◽  
The Government ◽  
Procurement System

The relevance of this research topic lies in the fact that public procurement requires in-depth consideration and comprehensive analysis, including the scientific and methodological level of analysis. The use of special legal documents in public procurement and the specific procedure for the execution of these documents is not a factor in the full understanding of this direction, including the economic assessment of the entire process. An economic and statistical approach using system analysis is required, which was used by the authors of the scientific article as the proposed research methodology. One of the main parts of the progressive process of commodity exchange in the economies of the analyzed countries is the mechanism for building public procurement. Currently, the problem of material and technical support of public needs in developed countries is solved as a result of logistics processes in the system of public procurement through the acquisition and supply of goods, works, and services, tangible and intangible resources. The article submits a review of foreign experience in building a public procurement system with special features characteristic of this region of the world, presented as an object of research. Country aspects in the object under study and allowed the authors to formulate the relevant main results and conclusions concerning various parties in the public procurement system, which determined the further strategy to improve the procurement system of the government and international integration union. Key words: public procurement (PP), regulation of the public procurement system, government orders, entrepreneurship, international regional institutions, regulation of the public procurement system, procurement, USA, European Union (EU), Poland, Germany, World Bank.

scholarly journals Issue to the Legal Protection of the Use of the State Budget to Handling Covid-19

2021 ◽  
Vol 4 (1) ◽  
pp. 1168-1177
Author(s):  
Soesi Idayanti
Keyword(s):  
Legal Protection ◽  
The State ◽  
Government Policies ◽  
Economic Sectors ◽  
Financial Policies ◽  
State Budget ◽  
Government Grants ◽  
The Government ◽  
Precarious Situation

The Covid-19 pandemic, which impacted the health, social, and economic sectors as a non-natural disaster, led the President to make efforts to handle it with state financial policies by stipulating Perpu Number 1 of 2020. Budget misuse during the Covid-19 pandemic should be punishable by the death penalty because carried out when the state is facing a precarious situation; however, in Perpu No.1/2020, the Government grants immunity rights state budget managers. This legal immunity needs to be studied as a standard-issue regarding the state budget to overcome the Covid-19 pandemic. This study aims to examine the pandemic's impact on state finances and how Government policies are in dealing with the Covid-19 pandemic. This study used a normative juridical approach with data obtained from the literature, and the results were analyzed qualitatively. The results showed that the Covid-19 pandemic resulted in the Government changing the output of the use of the state budget aimed at dealing with the pandemic and restoring the country's economic condition due to the pandemic; the legal solution is to stipulate Perpu Number 1 of 2020, which was then approved by the DPR and became Law Number 2 2020. At the technical, operational level, the Government has also issued various policy regulations as a follow-up to Law Number 2 of 2020, which is used as an effort to deal with precarious situations as a result of the Covid-19 pandemic, such as fiscal policy stimulus, taxes, social assistance, and policies. Adjustment of regional finances. The problem that was considered urgent due to the Covid-19 pandemic led the Government to stimulate immunity in Law Number 2 of 2020. However, this immunity is given following the principle of good faith for users of state finances

scholarly journals Menggagas Sistem Pengupahan dan Kesejahteraan Pekerja Outsourcing di Pemerintah dalam Pengadaan Publik

2018 ◽  
Vol 1 (4) ◽  
pp. 436-446
Author(s):  
Ajik Sujoko
Keyword(s):  
Selection Process ◽  
Public Procurement ◽  
Procurement Process ◽  
Labor Conditions ◽  
Labor Regulations ◽  
Private Participation ◽  
The Government ◽  
Uncertain Future ◽  
Ability And Willingness

AbstractAcceptance of wages and welfare of outsourcing workers in government an interesting thing to be discussed. The first, because wages and welfare in outsourcing are quite relevant issues for labor conditions. Second, through outsourcing, the government is able to accommodate outsourcing workers whose trends increase each year. Third, the government are not in the form of the company but are already used to implementing outsourcing practices. Fourth, the tendency of private participation to improve the performance of the government which is profit oriented. Of the four discussions and cases of outsourcing in some places, the attractive position of outsourcing workers is always in a weak position and an uncertain future, including in government. By reviewing the practice of procurement process of government goods/services, through this article contributes and encourages to government and outsourced employers has the ability and willingness to provide wages and welfare of outsourcing workers. How wages and welfare are enjoyed and accepted by outsourcing workers, through public procurement can be done adequacy of the procurement budget, provider selection process that follows labor regulations and contracting properly with the providerKeywords: Wages, Welfare, Outsourcing Workers, Procurement Of Goods/ServicesAbstrakPenerimaan upah dan kesejaheteraan pekerja outsourcing di pemerintah hal yang menarik untuk didiskusikan. Yang pertama, karena upah dan kesejahteraan dalam outsourcing merupakan masalah yang cukup relevan menggambarkan kondisi tenaga kerja. Kedua, melalui outsourcing pemerintah mampu menampung pekerja outsourcing yang cenderung naik tiap tahun. Ketiga, pemerintah bukan sebuah perusahaan, namun telah biasa menggunakan praktik outsourcing. Keempat, kecenderungan partisipasi swasta untuk meningkatkan kinerja pemerintah yang berorientasi pada keuntungan. Dari empat diskusi dan kasus outsourcing di sebagian tempat, menariknya posisi pekerja outsourcing selalu dalam posisi yang lemah dan masa depan yang tidak pasti, termasuk di pemerintahan. Dengan melihat praktek proses pengadaan barang/jasa pemerintah, melalui artikel ini diharapkan memberikan kontribusi dan dorongan kepada pemerintah dan pengusaha outsourcing memiliki kemampuan dan kemauan untuk menyediakan upah dan kesejahteraan pekerja outsourcing. Bagaimana upah dan kesejahteraan dapat dinikmati dan diterima oleh pekerja outsourcing melalui pengadaan publik, dapat dilakukan dengan menyediakan kecukupan dari anggaran pengadaan, proses pemilihan penyedia yang mengikuti peraturan ketenagakerjaan dan kontrak dengan penyedia secara benar.Kata kunci: Upah, Kesejahteraan, Pekerja Outsourcing, Pengadaan Barang/Jasa

Companies convicted of economic crimes and their participation in government tender processes in South Africa: A comment on Namasthethu electrical (PTY) LTD v City of Cape Town and another (201/19) [2020] ZASCA 74 (29 JUNE 2020)

2021 ◽  
Vol 8 (1) ◽  
pp. 102-122
Author(s):  
Jamil Ddamulira Mujuzi
Keyword(s):  
South Africa ◽  
South African ◽  
Public Procurement ◽  
Cape Town ◽  
African Countries ◽  
The Public ◽  
South African Police Service ◽  
The Government ◽  
South African Police ◽  
Economic Crimes

In South Africa, persons or companies convicted of fraud or corruption or companies whose directors have been convicted are debarred from participating in bidding for government tenders. Although it is easy to establish whether or not a natural person has been convicted of an offence, because a certificate can be obtained from the South African Police Service to that effect, it is the opposite with juristic persons. This issue came up in the case of Namasthethu Electrical (Pty) Ltd v City of Cape Town and Another in which the appellant company was awarded a government tender although the company and its former director had been convicted of fraud and corruption. The purpose of this article is to analyse this judgment and show the challenges that the government is faced with when dealing with companies that have been convicted of offences that bid for government tenders. Because South Africa is in the process of enacting public procurement legislation, the Public Procurement Bill was published for comment in early 2020. One of the issues addressed in the Bill relates to debarring bidders who have been convicted of some offences from bidding for government tenders. Based on the facts of this case and legislation from other African countries, the author suggests ways in which the provisions of the Bill could be strengthened to address this issue.

The Framework of Factors for the Improvement of the Significant Clauses in the Standard Form of Contract for the IBS Construction Approach in Malaysia

2021 ◽  
Vol 12 (1) ◽  
Author(s):  
Mohd Ashraf Mohd Fateh ◽  
◽  
Mohammad Fadhil Mohammad ◽  
Keyword(s):  
Research Output ◽  
Standard Form ◽  
Strong Support ◽  
Extensive Literature ◽  
Structured Interviews ◽  
Standard Contract ◽  
Adoption And Implementation ◽  
Multi Method Approach ◽  
The Government ◽  
Contract Form

The Industrialised Building System (IBS) was introduced over 10 years ago in Malaysia, with well-documented benefits and strong support from the government. Apparently, the adoption and implementation of IBS is still low and below the government target. When adopting IBS, construction players mostly face different issues and challenges, particularly on contractual aspects, which contribute to the low adoption of IBS in Malaysia. There is also a lack of provision in the significant clauses of the Malaysian standard contract form to fit the development of IBS to date. The aim of this paper is thus to establish a system of factors underpinned by Deming's Theory for the improvement of the significant clauses in the standard contract form for IBS construction in Malaysia. A multi-method approach was used to achieve its aim, including an extensive literature review, findings from the previous study via document analysis, preliminary survey, questionnaire survey and semi-structured interviews. The research revealed that there are five significant clauses with important factors that can be improved in the existing Malaysian standard form of contract in relation to the IBS construction. The research also developed a framework that would be able to assist the policy and decision-makers in understanding what the improvement factors that need to be considered in the significant clauses in the standard form of contract in relation to the IBS construction. The research output (the framework) was validated by the prominent industry players on the practicality, suitability to its purposes for the related stakeholders. The developed framework would be able to accelerate the adoption of IBS construction in parallel with the initiatives (P3) in the Construction Industry Transformation Programme (CITP).

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