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Economic Efficiency and the Division of Large Procurement Contracts Into Lots: An Analysis

Manuel Zimmermann


The article conducts a law and economics analysis of the regulation that obliges public procurers to divide large procurement contracts into lots, that is to determine the effect of this regulation on economic efficiency. At least the reasoning behind those provisions that are in force in some EU member states suggests that economic efficiency is increased. The type of regulation under discussion is one of several others worldwide (eg set-aside in the US) to promote small and medium sized enterprises (SMEs) through public procurement. The predominant reason to promote SMEs, in turn, is the assumption that a larger share of SMEs in the economy leads to the growth and prosperity of the economy. Since this effect on economic efficiency is only mediated through SME promotion and, in addition, relies on two assumptions, the actual effect on economic efficiency of the measure is distinctly unclear.The derived results of the analysis do also allow for comparative conclusions about different regulations on the obligation to divide procurement contracts in the EU. Consistent with EU directive provisions, some member states provide a rather strict obligation; others provide no such obligation at all. Which way is economically more desirable, or should regulations pursue a completely different approach? The conclusion includes a recommendation that provides for a Pareto improvement regarding both types of regulations.

Manuel Zimmermann, LLM (Haifa), EMLE is lawyer at Menold Bezler Rechtsanwälte Partnerschaft mbB, Stuttgart, Germany and lecturer for Public Procurement Law at the Administrative Academy Berlin (Verwaltungsakademie Berlin). He studied Law at the Universities of Mainz (Germany) and Speyer (Germany) and the Economic Analysis of Law (Law and Economics) within the European Master in Law and Economics programme at the Universities of Bologna (Italy), Rotterdam (The Netherlands) and Haifa (Israel). For Correspondence: <>


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