Renegotiations and Renewals of Public Contracts

Authors : Jean Beuve, Stéphane Saussier

Abstract :

This paper examines the impact of renegotiations on contract renewals. Using an original dataset of procurement contracts in the French car park sector, we show that there exists an optimal level of renegotiations that positively impacts the probability of renewing a contract with the same partner. This result holds only when public authorities have discretionary power during the awarding procedure. Such findings suggest that what is usually interpreted as a sign of weakness, i.e. frequent renegotiations, might well be good news indicating that the contracting parties can make contracts adaptable over time.

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