Procurement of Public-Private Partnerships: Does the procedure matter? An analysis of public-private partnerships in Denmark and the role of procurement procedures

Johanna Josefsdottir Jeppesen

Student thesis: Master thesis

Abstract

The tendering of public-private partnership (PPP) is subject to public procurement law. The academic literature on PPP presents only limited research on the relation between procurement procedures and PPP. The motive of this thesis is to fill this knowledge gap and investigate in the legal and economic implication of different procurement procedures on PPP. The aim is to create a better understanding of the perceptions and mechanisms behind PPP and procurement and contribute to the improvement of PPP practise. The thesis will investigate how the public and private participants in the Danish PPP sector perceive the relation between the choice of procurement procedure and PPPs and to what extent the procurement procedure can be used as a an instrument that contributes to PPPs with higher total welfare gains and lower total social costs. The analysis shows that central PPP aspects as risk allocation and standardization are perceived differently from the perspective of the public and the private sector. This difference might be explained by the different implied interest of the actors. However, this could also indicate a conflict within the Danish PPP sector which is interesting to investigate. In relation to procurement and PPP the findings indicate that the use of competitive dialogue results in better final PPP offers compared to restricted procedure. The dialogue between the private and the public actors ensures that the project proposals are aligned with expectation of the contracting authority. Even though competitive dialogue is resource demanding, among others because the public sector has to uphold legal principles such as equal treatment, the thesis findings indicate that the choice of procurement procedure do influence the PPP. The additional resources used in competitive dialogue may be well spend as the final offer better reflects the needs of the contracting authority, and thus expectantly would benefit society to a higher degree. An obstacle for the use of competitive dialogue in Denmark, is the Danish interpretation of the EU procurement directive, which is relatively strict and the risk of legal prosecution may restrain contracting authorities from further use of the procedure.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2013
Number of pages84