Paper Type
Complete
Abstract
This study examines whether quantity flexibility in public procurement carries a price premium. Using 2.87 million cleaned Brazilian procurement bid records from 2020 to 2024, it compares the Sistema de Registro de Preços (SRP), which does not guarantee purchase quantities, with the Pregão Eletrônico (PE), which reflects higher quantity commitment. Comparable items were matched through text normalization, embeddings, and similarity clustering. Descriptive comparisons, item-level statistical tests, and a log-linear regression with robust standard errors were then used to estimate the SRP premium. The results show that SRP is associated with systematically higher unit prices, consistent with suppliers pricing quantity uncertainty. A comparative cost exercise further suggests that this flexibility can generate substantial additional expenditure. The findings indicate that procurement modality should be aligned with demand predictability and forecasting quality.
Paper Number
1236
Recommended Citation
do Nascimento Vieira, Luiz Fernando and Moulik, Sanjoy, "How Contract Design Shapes Public Prices: The Cost of Quantity Non-Commitment in Brazil’s Procurement (SRP Framework Agreements vs. PE)" (2026). AMCIS 2026 Proceedings. 2.
https://aisel.aisnet.org/amcis2026/egov/sig_egov/2
How Contract Design Shapes Public Prices: The Cost of Quantity Non-Commitment in Brazil’s Procurement (SRP Framework Agreements vs. PE)
This study examines whether quantity flexibility in public procurement carries a price premium. Using 2.87 million cleaned Brazilian procurement bid records from 2020 to 2024, it compares the Sistema de Registro de Preços (SRP), which does not guarantee purchase quantities, with the Pregão Eletrônico (PE), which reflects higher quantity commitment. Comparable items were matched through text normalization, embeddings, and similarity clustering. Descriptive comparisons, item-level statistical tests, and a log-linear regression with robust standard errors were then used to estimate the SRP premium. The results show that SRP is associated with systematically higher unit prices, consistent with suppliers pricing quantity uncertainty. A comparative cost exercise further suggests that this flexibility can generate substantial additional expenditure. The findings indicate that procurement modality should be aligned with demand predictability and forecasting quality.
Comments
SIG E-GOV