ThispaperpresentsacomparisonmechanismforasimpleprocurementauctionandgeneralizedNashbargainingsolutioninaprocurementcircumstance.Thebuyerwhohopestofulfillaprojecthastwooptions.First,shemayawardtheprojecttotheoldproviderwithanefficientqualitybybargaining.Second,shemaygivetheprojecttothefirmwhosubmitsthelowestbidthroughasimpleprocurementsecond-pricesealed-bidauctionwithapre-fixedquality.Wecomparetheexpectedrevenueintheauctionwiththedeterministicprofitofthebargaining.Indifferentparameterscases,wefindtheborderlinefunctionsbetweenthetwooptionswithrespecttothebuyer’sbargainingpowerandtheamountofbidders.Wealsocompareoursimpleprocurementauction(SPA)withtheoptimalmultidimensionalbidauctionbyChe(1993),andfindourmodelprotectsthebuyer’sprivatevaluationinformationbyforfeitingsomeprofits.Somepropertiesofthedifferencebetweenthetwoauctionsareproposed,especiallythereisnorevenuedifferencewhentheamountofbiddersapproachesinfinity.
