Abstract
There is a lack of competition in public procurement in the European Union and the situation has become worse in recent years. I use a comprehensive data set of public procurement auctions in Finland between 2017 and 2025 to estimate the cost of low competition relative to more competitive auctions. Using matching, I find that having two or more bidders instead of one is associated with a 15% decrease in procurement costs. Having just one additional bidder in single-bid auctions could reduce costs by 9%. These estimates are robust to different specifications, showing that stimulating competition in public procurement is likely to lead to huge savings for the public sector and taxpayers. Back of the envelope calculations suggest annual savings between 144 and 176 million euros if more bidders were attracted.