Corruption in delegated public procurement auctions

•Corruption in public procurement is a major problem.•Scoring auction is often used to award contracts in public procurement.•A corrupt political representative chooses the rules of the scoring auction.•Such corruption always leads to lower quality and lower price.•Higher bargaining power of the politician leads to higher price.

In this paper we theoretically analyse effects of corruption in public procurements within a scoring-auction framework. A corrupt politician, who acts on behalf of the public sector, receives a kickback from the winning bidder. The politician selects the scoring rule. The paper shows that such corruption always leads to lower quality and lower price. Given a level of corruption, a higher bargaining power of the politician in extracting bribes does not affect the quality but leads to higher price.