Detection of unbalanced bids: A case study

Abstract

An unbalanced bid can be defined as a bid price that does not accurately reflect reasonable cost, contractor's profit, general overhead cost and other indirect costs. Selecting an unbalanced bidder as the contractor may lead to significant increases in the contract price. Therefore, detecting the unbalanced bids is a critical issue for owners. There are two main types of unbalanced bid, which consists of front-end loaded and quantity error exploitation. This study mainly focuses on the second type, namely quantity error exploitation, in which a contractor tends to increase the unit prices of items that are underestimated and reduce the unit prices of items that are overestimated because of errors in the estimated quantities. If an owner can detect the unbalanced bids during the awarding stage, a fair competition environment can be achieved. This study aims to provide owners with a model, which may assist them in detecting unbalanced bids. The proposed model uses five different grading systems. Owners may assign different weights to these grading systems and thereby the final score of each bidder can be calculated. All bidders can be evaluated based on the calculated final scores as well as the offered bid prices. The applicability of the proposed approach is demonstrated in an illustrative example. The findings of this study revealed that the proposed approach can be a useful tool for owners in detecting unbalanced bids.

Improved Unbalanced Bid Detection Model

“…The main aim of this study is to propose an improved version of the unbalanced bid detection model developed by Polat et al (2018). The proposed model uses eight different grading systems.…”

“…Polat et al, (2018) described the existing grading systems for detection of unbalanced bids. The modified approach proposed in this study adopts the same grading systems used by Polat et al, (2018), but the following grading systems are added for detection of unbalanced bids.…”

“…Therefore, this study focused on the detection of unbalanced bids created by quantity error exploitation in unit price contracts. For this purpose, after reviewing the existing models in the literature, an advanced unbalanced bid detection model was proposed by improving the model developed by Polat et al, (2018) [10]. The proposed model uses eight different grading systems in detection of unbalanced bids, whereas the previous model consisted of five grading systems.…”

The framework of data-driven and multi-criteria decision-making for detecting unbalanced bidding

“…Unascertained mathematics (An et al, 2018) and fuzzy logic (Su et al, 2020a) were used to measure the degree of unbalanced for every unit price. Polat et al (2018Polat et al ( , 2019 proposed an unbalanced bid detection model, including eight grading systems. In this system, the owners may assign weights to each grading system according to the characteristics of their projects.…”

“…, 2020a) were used to measure the degree of unbalanced for every unit price. Polat et al. (2018, 2019) proposed an unbalanced bid detection model, including eight grading systems.…”