Determinants of participation and success of the micro and small enterprises in public procurement: An empirical analysis

Abstract

Based on the recent discussions on the relationship between strategy and performance in the public sector, this work analyzes the determinants of participation and success of micro and small enterprises (MSEs) in public procurement from changes in legislation, favoring such groups. We adopt a quantitative approach and develop a set of hypotheses, tested using a single database, with detailed information of 542 purchase contracts made by a public administration agency of the Brazilian federal government between 2005 and 2011. The results showed that the institutional changes promoted by new rules, significantly contributed for the increase in the participation of MSEs in the bidding processes of the studied agency, but did not change the success probability of these companies in bidding processes, putting into perspective the effectiveness of legislation. Additionally, the results suggested that strategic factors associated with competitive environment, transactional attributes and capabilities inherent to the participants influence their access and the chances of success in public procurement.