Cutting Corners in Green Spaces : Opportunism in Public Procurement. Evidence from Swedish Municipalities on Challenges in Procurement of Park and Outdoor Maintenance

Sammanfattning

According to market theory, adding market-like competition to public services should result in better quality and a lower price. However, previous studies indicate that procurement of park and outdoor maintenance is complex and risks leading to opportunistic behaviour, such as moral hazard, and non-ethical work conditions. Multiple studies also show that too much emphasis on competition in the bidding process risks lowering performance quality. Therefore, our study aimed to shed light on how Swedish municipalities perceive challenges related to opportunism during and after the procurement process, their ability to act when problems occur, and whether their experiences differ depending on the population size of municipalities. Our investigation was also based on two hypotheses: 1) larger municipalities are expected to have greater competition and consequently greater difficulty monitoring performance, and 2) smaller municipalities have less competition and fewer issues with opportunistic behaviours and compliance. We conducted semi-structured interviews with 16 procurers and purchasers, specifically in the departments for park and outdoor maintenance, representing a total of 23 Swedish municipalities of varying population sizes and locations. A thematic analysis was performed, and the results were compared to established theories and previous studies. The results show that there are varied levels of competition in the interviewed municipalities and that there are significant differences depending on the population size of the municipality. Further, many of the municipalities experience abnormally (infeasibly) low bids and problems with rejecting them. There are varied opinions on the compatibility between low price and high quality, and the lack of competency in the sector enhances the difficulties of procuring services of high quality. In addition, the contracts need constant refinement to ensure better outcomes in the next procurement, a task that is time-consuming and not always fruitful as unserious firms seems to find loopholes regardless. Further, municipalities face significant difficulties when monitoring the contractors, which allows a multitude of opportunistic behaviours, such as non-performance and the use of equipment without correct environmental classification, or employees without proper knowledge. Sanctions do not deter these behaviours and are difficult to carry out as the municipality needs to provide thorough evidence and is exposed to the contractor’s right to appeal. As a result, the municipalities often hesitate to impose them as it is uncomfortable, risks damaging the municipality-contractor relationship, and could potentially leave the municipality without a provider. Our findings suggest that promoting competition does not provide the best outcomes in the procurement of park and outdoor maintenance. Multiple problems are caused by the very efforts trying to facilitate competition, meaning that the current regime is insufficient. We also conclude that there are differences between the municipalities based on their population size, confirming our hypotheses. We conclude by providing five suggestions for revisions of the current procurement regulations to ensure that it is adjusted according to the problems we discovered in our study.