The impact of contractor selection method on transaction costs: a review

The basic premise of transaction-cost theory is that the decision to outsource, rather than to undertake work in-house, is determined by the relative costs incurred in each of these forms of economic organization. In construction the "make or buy" decision invariably leads to a contract. Reducing the costs of entering into a contractual relationship (transaction costs) raises the value of production and is therefore desirable. Commonly applied methods of contractor selection may not minimise the costs of contracting. Research evidence suggests that although competitive tendering typically results in the lowest bidder winning the contract this may not represent the lowest project cost after completion. Multi-parameter and quantitative models for contractor selection have been developed to identify the best (or least risky) among bidders. A major area in which research is still needed is in investigating the impact of different methods of contractor selection on the costs of entering into a contract and the decision to outsource.

Avaliação do potencial terapêutico de inibidores da Galectina-3 em modelo experimental de lesão hepática crônica

As lesões crônicas do fígado são resultantes de agressões persistentes, onde a desorganização e destruição do tecido podem desencadear processos de regeneração e fibrose. Para que a integridade e homeostase do órgão sejam restauradas, várias vias intracelulares e intercelulares são ativadas. Uma delas é a através da liberação de moléculas pró-fibrogênicas, a exemplo da lectina solúvel bgalactosídea, a galectina-3 (Gal-3). A alta expressão dessa lectina tem sido associada a fibrogênese no fígado. A descoberta de moléculas capazes de se ligar à Gal-3 e inibir a sua ação são importantes no desenvolvimento de terapias antifibrosantes. A pectina cítrica modificada (PCM) e a N-acetilactosamina (LacNAc) demonstraram ação benéfica no tratamento de doenças fibróticas, incluindo renais e cardíacas, contudo, pouco se sabe sobre suas eficácias na fibrose hepática. Diante disso, o objetivo deste estudo foi investigar os efeitos das administrações da PCM e LacNAc quanto aos níveis de Gal-3 e fibrose em modelo experimental de lesão hepática crônica. Inicialmente, a fibrose hepática foi induzida em camundongos C57BL/6 pela administração de tetracloreto de carbono a 20 por cento diluído em azeite de oliva. Grupos de camundongos com dois ou quatro meses de lesão foram tratados com PCM (1 por cento e 5 por cento, fornecida ad libitum) e com LacNAc, por via intraperitoneal. Adicionalmente, camundongos knockouts para o gene da Gal-3 (Gal-3-/-) foram utilizados como um controle. Subsequentemente às intervenções, análises morfométricas, bioquímicas, imunológicas e de biologia molecular foram realizadas. Na análise morfométrica, não se verificou alteração no percentual de tecido fibroso entre os grupos tratados com PCM (1 por cento e 5 por cento) ou LacNAc quando comparados com seus respectivos controles, o que foi confirmado pela dosagem dos níveis de hidroxiprolina. Adicionalmente, não foi observada alteração dos níveis de Gal-3, MMP-9 e TIMP-1 após tratamento com os inibidores. Os resultados obtidos indicaram que a PCM e a LacNAc não foram capazes de inibir a Gal-3 no fígado, e portanto, não interferiram na deposição de tecido fibroso nesse modelo experimental

Estratégias para o aprimoramento do diagnóstico molecular na leishmaniose visceral

A leishmaniose visceral (LV) é uma doença infecto-parasitária causada por protozoários do gênero Leishmania. O trabalho teve como objetivo avaliar estratégias para o aprimoramento do diagnóstico molecular na LV, que compreenderam a avaliação da eficiência de diferentes métodos de extração de DNA em amostras de urina; a análise do uso da Reação em Cadeia da Polimerase quantitativa em tempo real (qPCR) como ferramenta para a detecção do DNA de Leishmania infantum na referida amostra; e a padronização de uma reação duplex qPCR para a detecção simultânea do DNA de L. infantum e do gene G3PD (controle endógeno). Depois da escolha do protocolo de extração de DNA mais apropriado, e após a otimização e a análise de reprodutibilidade, uma qPCR em urina foi padronizada. Em paralelo, após o desenho e a síntese de sondas TaqMan® compatíveis com os sistemas LINF 1B e G3PD1, após otimização e análise de reprodutibilidade, uma duplex qPCR em sangue também foi padronizada. Para avaliação dos protocolos desenvolvidos foram utilizadas técnicas de estatística descritiva. Para análise comparativa com técnicas clássicas de diagnóstico da LV utilizou-se Teste Qui Quadrado de independência ou Teste Exato de Fisher (p<0,05 e p<0,01, respectivamente). Como resultados, após otimização, o limite de detecção alcançado pela qPCR em urina utilizando o protocolo de extração selecionado (kit comercial) foi de 5 fg/microlitros de amostra 0,034 parasitos) A duplex qPCR em sangue alcançou um limite de detecção de 2x102 fg/microlitros de amostra 1,4 (ou ~ 1,4 parasito), após a otimização. A partir dos dados estatísticos obtidos, pôde-se analisar alta concordância percentual entre a qPCR e urina e o conjunto de critérios diagnósticos (sorologia rK39 + qPCR em sangue), bem como entre a duplex qPCR em sangue e a qPCR em sangue, para os Grupos 01 (pacientes com suspeita de LV) e 02 (pacientes HIV positivos co-infectados ou não). Como um conjunto de critérios, os dois novos ensaios obtiveram excelentes concordâncias com o conjunto de técnicas clássicas: 88,89 por cento e 94,74 por cento para os Grupos 01 e 02, respectivamente. Não houve diferenças estatísticas significativas entre os testes. Pôde-se concluir que ambos os ensaios mostraram bom potencial para a incorporação, após validação, ao diagnóstico da LV; em conjunto ou individualmente (quando necessário), trazendo mais conforto, praticidade, confiabilidade e rapidez ao diagnóstico definitivo da patologia

Discounted cash flow: accounting for uncertainty

Valuation is the process of estimating price. The methods used to determine value attempt to model the thought processes of the market and thus estimate price by reference to observed historic data. This can be done using either an explicit model, that models the worth calculation of the most likely bidder, or an implicit model, that that uses historic data suitably adjusted as a short cut to determine value by reference to previous similar sales. The former is generally referred to as the Discounted Cash Flow (DCF) model and the latter as the capitalisation (or All Risk Yield) model. However, regardless of the technique used, the valuation will be affected by uncertainties. Uncertainty in the comparable data available; uncertainty in the current and future market conditions and uncertainty in the specific inputs for the subject property. These input uncertainties will translate into an uncertainty with the output figure, the estimate of price. In a previous paper, we have considered the way in which uncertainty is allowed for in the capitalisation model in the UK. In this paper, we extend the analysis to look at the way in which uncertainty can be incorporated into the explicit DCF model. This is done by recognising that the input variables are uncertain and will have a probability distribution pertaining to each of them. Thus buy utilising a probability-based valuation model (using Crystal Ball) it is possible to incorporate uncertainty into the analysis and address the shortcomings of the current model. Although the capitalisation model is discussed, the paper concentrates upon the application of Crystal Ball to the Discounted Cash Flow approach.

Centennial variations in sunspot number, open solar flux and streamer belt width: 1. correction of the sunspot number record since 1874

We analyse the widely-used international/ Zürich sunspot number record, R, with a view to quantifying a suspected calibration discontinuity around 1945 (which has been termed the “Waldmeier discontinuity” [Svalgaard, 2011]). We compare R against the composite sunspot group data from the Royal Greenwich Observatory (RGO) network and the Solar Optical Observing Network (SOON), using both the number of sunspot groups, N{sub}G{\sub}, and the total area of the sunspots, A{sub}G{\sub}. In addition, we compare R with the recently developed interdiurnal variability geomagnetic indices IDV and IDV(1d). In all four cases, linearity of the relationship with R is not assumed and care is taken to ensure that the relationship of each with R is the same before and after the putative calibration change. It is shown the probability that a correction is not needed is of order 10{sup}−8{\sup} and that R is indeed too low before 1945. The optimum correction to R for values before 1945 is found to be 11.6%, 11.7%, 10.3% and 7.9% using A{sub}G{\sub}, N{sub)G{\sub}, IDV, and IDV(1d), respectively. The optimum value obtained by combining the sunspot group data is 11.6% with an uncertainty range 8.1-14.8% at the 2σ level. The geomagnetic indices provide an independent yet less stringent test but do give values that fall within the 2σ uncertainty band with optimum values are slightly lower than from the sunspot group data. The probability of the correction needed being as large as 20%, as advocated by Svalgaard [2011], is shown to be 1.6 × 10{sup}−5{\sup}.

Physiological and behavioral patterns of corruption

We study the behavior and emotional arousal of the participants in an experimental auction, leading to an asymmetric social dilemma involving an auctioneer and two bidders. An antisocial transfer (bribe) which is beneficial for the auctioneer (official) is paid, if promised, by the winner of the auction. Some pro-social behavior on both the auctioneers' and the bidders' sides is observed even in the absence of any punishment mechanism (Baseline, Treatment 0). However, pro-social behavior is adopted by the vast majority of subjects when the loser of the auction can inspect the transaction between the winner and the auctioneer (Inspection, Treatment 1). The inspection and punishment mechanism is such that, if a bribe is (not) revealed, both corrupt agents (the denouncing bidder) lose(s) this period's payoffs. This renders the inspection option unprofitable for the loser and is rarely used, especially towards the end of the session, when pro-social behavior becomes pervasive. Subjects' emotional arousal was obtained through skin conductance responses. Generally speaking, our findings suggest that stronger emotions are associated with decisions deviating from pure monetary reward maximization, rather than with (un)ethical behavior per se. In fact, using response times as a measure of the subject's reflection during the decision-making process, we can associate emotional arousal with the conflict between primary or instinctive and secondary or contemplative motivations and, more specifically, with deviations from the subject's pure monetary interest.

Tests of sunspot number sequences: 3. Effects of regression procedures on the calibration of historic sunspot data

We use sunspot group observations from the Royal Greenwich Observatory (RGO) to investigate the effects of intercalibrating data from observers with different visual acuities. The tests are made by counting the number of groups RB above a variable cut-off threshold of observed total whole-spot area (uncorrected for foreshortening) to simulate what a lower acuity observer would have seen. The synthesised annual means of RB are then re-scaled to the full observed RGO group number RA using a variety of regression techniques. It is found that a very high correlation between RA and RB (rAB > 0.98) does not prevent large errors in the intercalibration (for example sunspot maximum values can be over 30 % too large even for such levels of rAB). In generating the backbone sunspot number (RBB), Svalgaard and Schatten (2015, this issue) force regression fits to pass through the scatter plot origin which generates unreliable fits (the residuals do not form a normal distribution) and causes sunspot cycle amplitudes to be exaggerated in the intercalibrated data. It is demonstrated that the use of Quantile-Quantile (“Q  Q”) plots to test for a normal distribution is a useful indicator of erroneous and misleading regression fits. Ordinary least squares linear fits, not forced to pass through the origin, are sometimes reliable (although the optimum method used is shown to be different when matching peak and average sunspot group numbers). However, other fits are only reliable if non-linear regression is used. From these results it is entirely possible that the inflation of solar cycle amplitudes in the backbone group sunspot number as one goes back in time, relative to related solar-terrestrial parameters, is entirely caused by the use of inappropriate and non-robust regression techniques to calibrate the sunspot data.

The iso-Score Curve Graph. A new tool for competitive bidding

The present work describes a new tool that helps bidders improve their competitive bidding strategies. This new tool consists of an easy-to-use graphical tool that allows the use of more complex decision analysis tools in the field of Competitive Bidding. The graphic tool described here tries to move away from previous bidding models which attempt to describe the result of an auction or a tender process by means of studying each possible bidder with probability density functions. As an illustration, the tool is applied to three practical cases. Theoretical and practical conclusions on the great potential breadth of application of the tool are also presented.

Mathematical relationships between scoring parameters in capped tendering

Mathematical relationships between Scoring Parameters can be used in Economic Scoring Formulas (ESF) in tendering to distribute the score among bidders in the economic part of a proposal. Each contracting authority must set an ESF when publishing tender specifications and the strategy of each bidder will differ depending on the ESF selected and the weight of the overall proposal scoring. This paper introduces the various mathematical relationships and density distributions that describe and inter-relate not only the main Scoring Parameters but the main Forecasting Parameters in any capped tender (those whose price is upper-limited). Forecasting Parameters, as variables that can be known in advance before the deadline of a tender is reached, together with Scoring Parameters constitute the basis of a future Bid Tender Forecasting Model.

On competitive bidding: scoring and position probability graphs

Iso-score curves graph (iSCG) and mathematical relationships between Scoring Parameters (SP) and Forecasting Parameters (FP) can be used in Economic Scoring Formulas (ESF) used in tendering to distribute the score among bidders in the economic part of a proposal. Each contracting authority must set an ESF when publishing tender specifications and the strategy of each bidder will differ depending on the ESF selected and the weight of the overall proposal scoring. The various mathematical relationships and density distributions that describe the main SPs and FPs, and the representation of tendering data by means of iSCGs, enable the generation of two new types of graphs that can be very useful for bidders who want to be more competitive: the scoring and position probability graphs.

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.

Modeling bidding competitiveness and position performance in multi-attribute construction auctions

Currently, multi-attribute auctions are becoming widespread awarding mechanisms for contracts in construction, and in these auctions, criteria other than price are taken into account for ranking bidder proposals. Therefore, being the lowest-price bidder is no longer a guarantee of being awarded, thus increasing the importance of measuring any bidder’s performance when not only the first position (lowest price) matters. Modeling position performance allows a tender manager to calculate the probability curves related to the more likely positions to be occupied by any bidder who enters a competitive auction irrespective of the actual number of future participating bidders. This paper details a practical methodology based on simple statistical calculations for modeling the performance of a single bidder or a group of bidders, constituting a useful resource for analyzing one’s own success while benchmarking potential bidding competitors.

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.

Analysis of the distribution of the number of bidders in construction contract auctions

The number of bidders, N, involved in a construction procurement auction is known to have an important effect on the value of the lowest bid and the mark-up applied by bidders. In practice, for example, it is important for a bidder to have a good estimate of N when bidding for a current contract. One approach, instigated by Friedman in 1956, is to make such an estimate by statistical analysis and modelling. Since then, however, finding a suitable model for N has been an enduring problem for researchers and, despite intensive research activity in the subsequent 30 years, little progress has been made, due principally to the absence of new ideas and perspectives. The debate is resumed by checking old assumptions, providing new evidence relating to concomitant variables and proposing a new model. In doing this and in order to ensure universality, a novel approach is developed and tested by using a unique set of 12 construction tender databases from four continents. This shows the new model provides a significant advancement on previous versions. Several new research questions are also posed and other approaches identified for future study.

Scoring rules and competitive behavior in best value construction auctions

This paper examines the extent to which engineers can influence the competitive behavior of bidders in Best Value or multi-attribute construction auctions, where both the (dollar) bid and technical non-price criteria are scored according to a scoring rule. From a sample of Spanish construction auctions with a variety of bid scoring rules, it is found that bidders are influenced by the auction rules in significant and predictable ways. The bid score weighting, bid scoring formula and abnormally low bid criterion are variables likely to influence the competitiveness of bidders in terms of both their aggressive/conservative bidding and concentration/dispersion of bids. Revealing the influence of the bid scoring rules and their magnitude on bidders’ competitive behavior opens the door for the engineer to condition bidder competitive behavior in such a way as to provide the balance needed to achieve the owner’s desired strategic outcomes.