Vertical collusion in public procurement: Estimation based on data for R&D composite auctions8

One of the key problems in public procurement researchisidentifying violation signs, including vertical collusion. This paper discusses composite auctions (with a selection of a winner based not only on the price criterion) in the procurement for the results of research and development (R&D) work in Russia. Using the metric of interaction frequency, we identified suppliers that were potentially affiliated with customers. The results of econometric modeling suggest that potentially affiliated suppliers win with the final price closer to the initial maximum contract price (IMCP) than independent suppliers. This result is robust to specification changes and different evaluation methods. Potentially affiliated participants have higher quality scores in contests with potentially affiliated organizers. At the same time, independent participants receive lower scores in such auctions. Therefore, a potentially affiliated participant could set a higher price, winning due to an overstated quality criterion.