Quick abnormal-bid-detection method for construction contract auctions

Pablo Ballesteros-Pérez*, Martin Skitmore, Raj Das, Maria Luisa Del Campo-Hitschfeld

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

21 Citations (Scopus)
1 Downloads (Pure)

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.

Original languageEnglish
Article number4015010
JournalJournal of Construction Engineering and Management
Volume141
Issue number7
DOIs
Publication statusPublished - 1 Jul 2015
Externally publishedYes

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