TESIS PARA OPTAR AL GRADO DE MAGÍSTER EN ECONOMÍA / Data from Chile's public procurement system shows that auctions become less competitive toward the end of the scal year as the number of tenders increases because of use-it-or-lose-it budget provisions. A dynamic price-competition model with capacity constraints rationalizes this nding and has additional predictions that are con rmed by the data. In particular, rms infer a less competitive environment by the end of the year and frequently set their bids around the price cap. This result is driven by the possibility of becoming a single-bidder when competitors exhaust their capacity. Additionally, high-capacity rms usually skew their victories toward the end of the year, while smaller rms win more tenders in earlier periods.