Quick abnormal-bid-detection method for construction contract auctions
journal contributionposted on 30.04.2018, 13:25 by Pablo Ballesteros-Perez, Martin Skitmore, Raj Das, Maria Luisa del Campo-Hitschfeld
© 2015 This work is made available under the terms of the Creative Commons Attribution 4.0 International license,. 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.
The research reported in this paper has been funded in Chile by Chilean National Commission of Scientific and Technologic Research under the Program Chilean National Fund of Scientific and Technologic Research Initiation into Research 2013 (Project 11130666).
- Architecture, Building and Civil Engineering