Quick abnormal-bid-detection method for construction contract auctions

Ballesteros-Pérez, Pablo, Skitmore, Martin, Das, Raj, & del Campo-Hitschfeld, Maria Luisa (2015) Quick abnormal-bid-detection method for construction contract auctions. Journal of Construction Engineering and Management, 141(7), Article Number-04015010.

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Non-competitive 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 work contributes to an improved understanding of abnormal bid behavior as an aid to detecting and monitoring potential collusive bid practices.

Impact and interest:

3 citations in Scopus
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2 citations in Web of Science®

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ID Code: 92532
Item Type: Journal Article
Refereed: Yes
Keywords: bidding, abnormal bid, bid covering, collusion, German tank problem, construction auctions
DOI: 10.1061/(ASCE)CO.1943-7862.0000978
ISSN: 1943-7862
Subjects: Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200)
Divisions: Current > Schools > School of Civil Engineering & Built Environment
Current > QUT Faculties and Divisions > Science & Engineering Faculty
Copyright Owner: Copyright 2015 ASCE
Deposited On: 03 Feb 2016 00:12
Last Modified: 05 Feb 2016 12:40

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