Tender Design Factors and Bidder Competition: An Analysis of German Public Procurement of IT Consulting Services

Abstract

This master’s thesis identifies key tender design factors influencing bidder participation in German public procurement for IT consulting services, analysing Contract Award Notices from 2024 from Tenders Electronic Daily (TED). Utilizing AI-assisted data extraction and negative binomial regression on 820 tenders, the study reveals statistically significant impacts of specific design choices. The results show that increasing price weighting by one percentage point increased expected bids by 1.2%. Dividing contracts into additional lots had a substantial effect, increasing bids by 20.9% per lot. Most notably, providing tender documents in English was associated with a 53.0% increase in expected bids. Significant interaction effects were also found, most prominently that restricted procedures displayed the strongest positive bidder response to increased price weighting. Longer contract durations only modestly increased the number of bids and renewal options as well as framework agreements did not show statistically significant effects. These findings demonstrate that German contracting authorities can actively enhance competition in IT consulting procurement by strategically emphasizing price weightings, utilizing lotting, and ensuring linguistic accessibility.