Abstract

The objective of this paper is to examine factors affecting the price reduction range in biddings in Ca Mau province by bidding organizers. Based on theory of asymmetric information by Acerola (1970), we employed multiple regression model on data of 500 bid packages in Ca Mau from 2009 to 2016 to test hypotheses. The results indicate the number of participating bidders (N), funds allocated for bid packages (C), owner (O), and the total investment (TI) are positively related to the reduction range (RR). In addition, bid decider (D)and contracting time (CT) are negatively related to the reduction range (RR) while type of project (GP) has no impact. The paper offers some policy implications to improve the efficiency of the bidding activities and suggestions to authorities concerning legal framework on public investment so as to better manage public investment.