The Economics of Procurement Contract Awarding: Problems and Solutions in Theory and Practice

The main aim of this paper is to review some of the newest and most promising advances in auction theory with an eye to applications to procurement practice. Here we focus in particular on four topics related to multidimensional auctions: 1) how to define a proper scoring rule when the awarding bodies lack the necessary information regarding its own preferences and suppliers’ technology; 2) how to cope with the information disclosure policy regarding the discretional evaluation of some aspects of each contractual proposal; 3) how to use contractors’ reputations based on their past performance in the awarding process; 4) how to control the risk of collusion and corruption in the awarding phase.