Does e-procurement save the state money?

Abstract

Scientific literature reports scarce evidence of whether Internetbased procurement systems improve the efficiency of State purchases. We propose a methodology to estimate savings in: (i) the centralization of administrative tasks, and (ii) price differentials due to a larger number of contractors and suppliers bidding on contracts. We test our methods with ChileCompra, the Chilean e-procurement agency. During 2007, 885 Chilean State agencies used this system to purchase US$4.5 billion in products and services. Our preliminary results show price reductions of 2.65% and administrative cost savings of 0.28%-0.38% between 2006 and 2007.

Citation

Singer, M., Konstantinidis, G., Roubik, E. and Beffermann, E. (2009), "Does e-procurement save the state money?", Journal of Public Procurement, Vol. 9 No. 1, pp. 58-78. https://doi.org/10.1108/JOPP-09-01-2009-B002