Ballesteros-Pérez, P; Skitmore, M; Das, R and Del Campo-Hitschfeld, M L (2015) Quick abnormal-bid-detection method for construction contract auctions. Journal of Construction Engineering and Management, 141(7): 4015010, ISSN 0733-9364
Abstract
Noncompetitive bids have recently become a major concern in both public and private sector construction contract auctions. Consequently, several models have been developed to help identify bidders potentially involved in collusive practices. However, most of these models require complex calculations and extensive information that is difficult to obtain. The aim of this paper is to utilize recent developments for detecting abnormal bids in capped auctions (auctions with an upper bid limit set by the auctioner) and extend them to the more conventional uncapped auctions (where no such limits are set). To accomplish this, a new method is developed for estimating the values of bid distribution supports by using the solution to what has become known as the German Tank problem. The model is then demonstrated and tested on a sample of real construction bid data, and shown to detect cover bids with high accuracy. This paper contributes to an improved understanding of abnormal bid behavior as an aid to detecting and monitoring potential collusive bid practices.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | abnormal bid; bid covering; bidding; collusion; construction auctions; contracting; German tank problem |
| Index terms: | construction contract, bidder, monitoring, private sector, estimating, bidding, accuracy, collusion |
| Subjects: | tendering, professional development, industry analysis, contract type, control systems, financial and cost management, bidding |
| Topics: | Site Management, Business Strategy, Cost Management, Information Management, Procurement |
| Descriptive scope: | 2 PC |
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