Detecting abnormal and collusive bids in capped tendering

Recent developments in the area of Bid Tender Forecasting have enabled bidders to implement new types of easy-to-use tools for increasing their chances of winning contracts. Although these new tools (such as iso-Score Curve Graphs, Scoring Probability Graphs, and Position Probability Graphs) are designed for bidders in capped tendering (tenders with an upper price limit), some of their principles can also be applied by a Contracting Authority to detect which bidders do not follow a standard pattern, that is, their bids are extremely high or low. Since a collusive bid generally needs to be sufficiently high or low to make an impact on the bid distribution, any person in charge of supervising capped tenders can be alerted to any bidder that might be involved in a cartel after identifying the same abnormal behavior in a series of tenders through simple calculations and a new type of graph.

Estimating future bidding performance of competitor bidders in capped tenders

Research in Bid Tender Forecasting Models (BTFM) has been in progress since the 1950s. None of the developed models were easy-to-use tools for effective use by bidding practitioners because the advanced mathematical apparatus and massive data inputs required. This scenario began to change in 2012 with the development of the Smartbid BTFM, a quite simple model that presents a series of graphs that enables any project manager to study competitors using a relatively short historical tender dataset. However, despite the advantages of this new model, so far, it is still necessary to study all the auction participants as an indivisible group; that is, the original BTFM was not devised for analyzing the behavior of a single bidding competitor or a subgroup of them. The present paper tries to solve that flaw and presents a stand-alone methodology useful for estimating future competitors’ bidding behaviors separately.

Scoring rules and abnormally low bids criteria in construction tenders: a taxonomic review

In the global construction context, the best value or most economically advantageous tender is becoming a widespread approach for contractor selection, as an alternative to other traditional awarding criteria such as the lowest price. In these multi-attribute tenders, the owner or auctioneer solicits proposals containing both a price bid and additional technical features. Once the proposals are received, each bidder’s price bid is given an economic score according to a scoring rule, generally called an economic scoring formula (ESF) and a technical score according to pre-specified criteria. Eventually, the contract is awarded to the bidder with the highest weighted overall score (economic + technical). However, economic scoring formula selection by auctioneers is invariably and paradoxically a highly intuitive process in practice, involving few theoretical or empirical considerations, despite having been considered traditionally and mistakenly as objective, due to its mathematical nature. This paper provides a taxonomic classification of a wide variety of ESFs and abnormally low bids criteria (ALBC) gathered in several countries with different tendering approaches. Practical implications concern the optimal design of price scoring rules in construction contract tenders, as well as future analyses of the effects of the ESF and ALBC on competitive bidding behaviour.