REPUTATION IN PUBLIC PROCUREMENT: REGULATORY FEATURES, KEY INDICATORS AND PERFORMANCE EVALUATIONS

Abstract

The article presents a literature review on reputation factor in public procurement. Reputation is one of the tools for solving the principal-agent problem, which is typical for contractual relations. In line with the spread of New Public Management theory in public procurement, alternative methods of supplier selection are being developed, in particular, based on suppliers’ reputation. In contrast to the private sector, public buyers’ ability to consider reputation when choosing a supplier is highly regulated. It is shown that in the world practice of public procurement the reputation of suppliers is considered to varying degrees, there is no single approach to indicators, mechanisms for providing information and procedural aspects. Therefore, it is timely to analyse the arguments for and against expanding the possibilities of reputational considerations in public procurement. To answer this question, a separate block focuses on the effects of reputational considerations in public procurement in terms of barriers to entry, public procurement efficiency, and building trust between procurers and suppliers. Conclusions about the positive effects of reputational considerations are of interest to procurers who decide on the choice of supplier evaluation criteria. Relevant aspects of reputational considerations for Russian regulation concerning reputation indicators and mechanisms for providing information are identified. The article differs from existing reviews on the topic of reputation by focusing on the specificity of public procurement. An original classification of sources is presented in accordance with the following parameters: definitions and indicators of reputation, possibilities and limitations of reputational considerations and their effects in public procurement. Poorly studied aspects of interest for further research are identified.