Procurement (and concession) contracts are agreements granting the right to construct public works, operate and provide a service/good. Themain advantage of a procurement contract is that it passes full responsibility for investment and operations to the private sector and consequentlyprovides...

We study the competition to operate an infrastructure service bydeveloping a model where firms must report a two-dimensional sealedbid: the price to consumers and the concession fee paid to the government. Two bidding rules are considered in this paper. One ruleconsists of awarding the...