Review of collusion and bid rigging detection methods in the construction industry

Foremny, Andrzej

doi:10.3311/ccc2018-123

Cited by 3 publications

(4 citation statements)

References 24 publications

(26 reference statements)

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“…OECD (Organization for Economic Cooperation and Development) countries that support free-market economy have established stringent laws to curtail this practice and suggest designing the tender process to maximize participation (OECD, 2013). Researchers like Foremny and Dorabialski (2018) say that one practical way to prevent collusion is to expand the list of potential bidders by inviting a wider group of qualified subcontractors or suppliers to participate, as was also evident in this study. Further to ensure this practice, they suggest that effective competition can be enhanced if a sufficient number of credible bidders are able to respond to the invitation to tender and have an incentive to compete for the contract.…”

Section: Discussionmentioning

confidence: 93%

Subcontractor Selection Process Through Vendor Bids: A Case of An Outsourcing Service in Construction

Ramalingam

2020

IIM Kozhikode Society & Management Review

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Subcontractors handle a large portion of the work in construction projects. The ability of the general contractor to deliver projects on time, within budget and with the expected level of quality are significantly dependent on the performance of subcontractors. Thus, selecting the right subcontractor for the right task is a determining factor for project success. Literature has identified several criteria for subcontractor selection that predominantly includes financial capacity, ability to complete on time and reputation and quality of workmanship. However, as projects are becoming more global and complex, ensuring selection and award through a fair and competitive formal process becomes imperative. Nevertheless, an understanding of a formal process, backing the selection criteria, seems to be lacking; more so in the context of engineering outsourcing services. Vendor bid analysis is one such service, wherein the general contractor packages the bids received from several subcontractors to a team in a different country who evaluate and enable the general contractor to select and award the subcontractors for project tasks. To this end, an exploratory case study was conducted in an outsourcing firm in India that provide services to general contractors in the USA to understand the formal process of subcontractor selection across organizational boundaries along with its inherent risks and challenges. Data was collected through a participatory research approach, supplemented with participant observation and team interviews which were analysed through inductive reasoning and cross-case comparison methods. The findings showed a formalized 5-phase process across the organizational interface that included assess, identify, evaluate, negotiate and optimize phases. Further, delving into the evaluate, negotiate and optimize phases, the nuances in outsourced projects and the firms strategy to overcome them were evident, such as selection criteria and negotiation strategy adopted in the case of a single bidder with high pricing to mitigate probable bid-rigging practices or ensuring constant training to overcome the challenges due to lack of trade and country specific know-how. In addition, through a reflective approach, the value addition services provided to the general contractor aimed to optimize the process and improve project governance. These findings are expected to provide practical implication for firms in similar business and act as a steppingstone to conduct further robust research.

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Section: Discussionmentioning

confidence: 93%

Subcontractor Selection Process Through Vendor Bids: A Case of An Outsourcing Service in Construction

Ramalingam

2020

IIM Kozhikode Society & Management Review

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“…Scholarly sources that present approaches that may have prevented costly litigation. Foremny (2018) classified and presented a brief description of the bid rigging and collusion factors existing, in addition to giving the thoughts to the realization of the idea in combining AI (Artificial Intelligence) and BIM (Building Information Modelling), to detect collusion and bid rigging within associative tenders.…”

Section: Instruction To Tenderersmentioning

confidence: 99%

“…The research will be guided along the lines of the events that EMBD claimed has occurred that rendered the contracts void and unenforceable and investigated the contractual wrong doings and examine possible remedies that could have been utilized to avoid costly litigations. Foremny (2018) added that "it is detrimental to society and to the free market economy". Anticompetitive behaviour in the construction industry can result in considerable losses for the national economy due to the high value of its output and the relevance of the time factor.…”

Section: Introductionmentioning

confidence: 99%

Implications of Bid Rigging Practices in Small Island Developing States: A Case Study

Chadee,

Ramsubhag,

Mohammed

2024

ABBSSR

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The Bid rigging on construction projects has a wider societal implication that has spanned beyond the parties to the contract. This has led to costly litigation actions and additional unaccounted transactional costs derived from taxpayers’ funding. This study utilized a qualitative approach, through an emic view of a contemporary case study between the Government of Trinidad and Tobago and several contractors on bid rigging practices. The findings revealed that recommendations indicated within a Commission of Enquiry could have prevented unlawful practices. This research justifies the need for systems to be in place to comply with procurement laws and the heightened need for enforcement of ethical practices in state organizations. This research can assist policy makers in determining areas that require updating in relation to procurement and contract management practices within the construction industry.

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“…The problem of collusion and bid rigging has been a subject of many studies, i. a. [2][3][4][5][6][7][8][9][10]. Construction industry, including road construction is an important and capital-consuming branch of world economy.…”

Section: Introductionmentioning

confidence: 99%

Collusion and bid rigging in the construction industry: case studies from Poland

Foremny¹,

Kulejewski²,

Anysz³

et al. 2018

Creative Construction Conference 2018 - Proceedings

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Polish economy experienced significant changes during the past 30 years. System transformation that began in the 1980's and was enhanced by Poland's entry to the European Union in 2004 significantly influenced economic development. Apart from tough history experiences, they formed the shape of national economy which can be observed nowadays. It was a long and difficult process. During political and economic rapid changes greater numbers of price collusions and other illegal practices can be observed than during the stable development of national economy. Authors selected and reviewed the most important anti-competitive cases in the construction industry from the past 30 years in Poland. The review includes not only cases that were officially justified and penalized-like the collusion of portland cement big producers-but also cases of collusion suspicion on highway and express roads that ended with acquittal court verdicts.

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Review of collusion and bid rigging detection methods in the construction industry

Cited by 3 publications

References 24 publications

Subcontractor Selection Process Through Vendor Bids: A Case of An Outsourcing Service in Construction

Subcontractor Selection Process Through Vendor Bids: A Case of An Outsourcing Service in Construction

Implications of Bid Rigging Practices in Small Island Developing States: A Case Study

Collusion and bid rigging in the construction industry: case studies from Poland

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