Projects per year
Abstract
Litigation and reputation are not independent of each other. Public
procurement court proceedings take months, if not years, resulting in
significant costs for all parties concerned: the contracting authority,
the appellant and also for the winning tenderer. The fear of post-award
litigation is one of the main reasons that contracting authorities tend
to avoid taking risks in contract awards. On the other hand, the risk of
being regarded as litigious can influence tenderers’ decision-making if
they assume that such a reputation may affect their success in future
procurement procedures. Access to remedies is an integral part of
well-functioning public procurement. The purpose of this article is to
analyse the significance of possible reputational factors in tenderers’
decision-making regarding whether or not to litigate. In behavioral law
theory, reputational factors have in fact been considered as
non-monetary (dis)incentives, which may affect company’s decisions. This
is further supported by recently published empirical economics research
suggesting that contracting authorities have indeed a tendency to avoid
tenderers with bad reputation. This article analyses the connection
between reputation and litigation in public procurement context using
empirical methods and data collected via survey from companies that have
withdrawn their complaints to the Finnish Market Court in 2020 and
2021. The survey shall be conducted in February-March 2022 and thus the
conclusions of the empirical part of the research are still unknown.
Nonetheless, and on the basis of earlier legal research, we submit that
reputational factors indeed play an important role in economic
operators’ decisions on initiating court proceedings.
Original language | English |
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Pages (from-to) | 171-185 |
Number of pages | 15 |
Journal | Public Procurement Law Review |
Issue number | 4 |
Publication status | Published - 2023 |
MoEC publication type | A1 Journal article-refereed |
Keywords
- contracting authorities
- dispute resolution
- Finland
- ligitation
- public procurement
- reputation
- tenderers
Field of science
- Law
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Dive into the research topics of 'Is It All Worth It? Litigation Risks in Public Procurement and Role of Reputation in Particular: Evidence from Finland'. Together they form a unique fingerprint.Projects
- 1 Active
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Comp_Eff_PP: Enhancing competition and efficiency in public procurements
Halonen, K.-M. (Principal Investigator) & Heikkinen, P. (Collaborative Investigator)
01.09.2021 → 31.08.2025
Project: Co-funded project
Activities
- 1 Public or invited talk
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Is it all worth it? Litigation risks in public procurement and role of reputation in particular. Evidence from Finland.
Heikkinen, P. (Speaker)
2 Jun 2022Activity: Presentation › Public or invited talk
Press/Media
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Liian vilkas valtiolle -podcast: 1 Jakso "Hipaisu hankintoihin"
01.09.2023
1 item of Media coverage
Media contents: Research