The Role of In-House Procurement According to Finnish Municipalities' Purchase Invoice Data

TL;DR

This study analyzes Finnish municipalities' purchase invoice data to assess their reliance on in-house ICT procurement, highlighting the need to understand internal ICT capabilities and resource sharing in public procurement.

Contribution

It provides empirical insights into the extent of in-house ICT procurement among Finnish municipalities using actual purchase invoice data.

Findings

Municipalities show varying levels of dependence on in-house ICT procurement.

In-house companies may influence cost sharing and resource allocation.

Further examination needed on internal ICT units within municipalities.

Abstract

Public sector is a large consumer of ICT systems and services, used for various public services. Tendering for such systems is governed by laws aimed at eliminating unfair advantages and offering all possible parties equal opportunities to participate in the tendering process. In this article, we study in-house rpocurement, where the acquiring organization is an owner of the subcontractor that delivers the system or the service. Municipalities' purchase invoice data is used to determine how much municipalities in Finland depend on in-house procurement. In conclusion, the understanding if included municipalities have ICT service and development units within the organizations needs closer examination, as in-house companies may offer municipalities with limited resources divided costs in the public procurement process.