• Case study of open data about payments in public procurement.
  
• Late payments affects providers.
  
• Extra cost for the administration

We estimated the financial cost of the delays in public procurement payments and identified variables that can affect the delays.

• Reports about the problem of arrears
• Cost and impact of late payments: payment delays reduce economic growth, increase the likelihood of bankruptcies and reduce profits
• Inefficiencies in public procurement

• Data of the contracting procedure
  
• Invoice data
  
• Institutional data
  
• Period: 2011-2017

The final dataset had 315.973 observations + 61.537 observations with extreme values.

Survival analysis is a statistical method used to analyze and model the data when the outcome variable is the time until the occurrence of a specific event. In our case, the event of interest is the date of payment of an invoice.

We also estimated the effect of covariates in payment time.

\(C = P * i * d\)

where,

C= estimated cost for firms
P=amount of each payment in guaranies
i= annual average lending rate
d= delay expressed as a fraction of a year

We adjusted by inflation using the GDP deflator (2017=100) and used the 2017 average exchange rate.

• Lack of exact invoice due date
  
• Information about the providers
  
• Institutional data availability

• A one percent increase in the invoice amount shortens survival time by 0.97 times, this means that larger invoices are paid faster.
  
• Using Treasury funds to pay the invoice, increases survival time (payment takes longer) by 1.31 times in comparison to using institutional or Public credit funds.
• Institutions with more than 10,000 employees extends survival time by 1.43 times in comparison to smaller entities with a payroll of less than 1,000.
• Invoices related to services purchases are paid faster than purchases for investment or goods and materials.

Between 2011 and 2017, the total cost of late payments was of $142.29 million (0.48% of 2017 nominal GDP).

• Between 2011 and 2017, was of $142.29 million, equivalent to 0.48% of Paraguay’s 2017 Gross Domestic Product.
  
• Procuring entities take 55 days on average to pay invoices, while the international optimal deadlines are stablished in 30 days.
• Health and Public Works, concentrate 67% of the total cost, so the corrective efforts should concentrate in these entities.
• The first step of the payment procedure (invoice stage), which is not regulated, is the one that takes longer. If a deadline of 15 days is met, costs could be reduced by 48%.
• If the total payment deadline is established in 45 or 30 days since the invoice issuance, the cost could be reduced by 42% or 52%, respectively