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Centralizing Public Procurement Purchases: Suggestions towards Competitiveness

Ignacio Herrera-Anchustegui

Centralized purchasing may be beneficial for contracting authorities and society in general as it may lead to the reduction of purchasing prices, administrative economies of scale, reduced transaction costs, and may help towards the specialization of procurement officers across Member States. Directive 2014/24 reinforces the impulse given to centralized purchasing techniques due its popularity and establishes two different types of bodies: either pure wholesalers, or mere intermediaries that carry out procurement on behalf of other contracting authorities. However, the competitive benefits that may be generated by centralization can also be eroded by its abuse and inadequate implementation. The paper addresses the benefits and concerns derived from centralized purchasing from both a microeconomic and legal perspective. Additionally, it holds that centralization should be carried out in a pro-competitive and efficient manner. To do so, central purchasing bodies and their purchasing power should be regulated by a two-fold mechanism: public procurement law or competition-law-like clauses, and public procurement "best-practices" guaranteeing that buyer power is not abused and the competition principle is complied with.

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