Price Adjustment Policies in Procurement Contracting: An Analysis of Bidding Behavior
研究政府采购合同中引入价格调整条款对投标行为的影响，发现该政策使投标更激进且分散度降低，对分项投标影响更明显。
The fluctuations in fuel prices over the past decade led a number of government agencies to introduce price adjustment clauses in procurement contracting. Those clauses were primarily designed to reduce contractors’ uncertainty without considering the impact of such initiatives on bidding and the budget. We analyze a newly constructed, detailed panel of observations on bids for construction contracts and compare bidding behavior across periods and projects, and across items within projects. Estimates from a difference‐in‐differences approach, indicate that bidding becomes more aggressive and less dispersed after the implementation of this policy. The difference is more pronounced when we consider itemized bids than overall project bids. Alternative techniques of regression discontinuity and nonparametric estimation are applied and yield consistent results.