The iso-Score Curve Graph. A new tool for competitive bidding

Abstract

The present work describes a new tool that helps bidders improve their competitive bidding strategies. This new tool consists of an easy-to-use graphical tool that allows the use of more complex decision analysis tools in the field of Competitive Bidding. The graphic tool described here tries to move away from previous bidding models which attempt to describe the result of an auction or a tender process by means of studying each possible bidder with probability density functions. As an illustration, the tool is applied to three practical cases. Theoretical and practical conclusions on the great potential breadth of application of the tool are also presented.

Estimating Future Bidding Performance of Competitor Bidders in Capped Tenders

“…Concerning the measurement of scoring levels and positions occupied of any bidder, the calculations shown in this paper are valid for both capped and non-capped tendering, but, when complementing the Smartbid BTFM (Ballesteros-Pérez et al 2012a, b, 2013a since the Smartbid model has only been applied to capped tendering. Therefore, further adaptations of the Smartbid model are still necessary.…”

“…No other remarkable BTFMs were developed from 1991 onwards until Ballesteros-Pérez et al (2012a, b, 2013a) devised the Smartbid model for bidding practitioners and professionals. This model basically consists of three types of graphs: the iso-Score Curve Graph (iSCG), the Scoring Probability Graphs (SPG) and the Position Probability Graph (PPG); and solves the main limitations encountered in previous Bid Tender Forecasting models (Skitmore, Runeson 2006) as it enabled: (1) studying bidding behaviors with a significantly smaller databases than previous works; (2) forecasting the probability of obtaining a particular score and/or position among competitors; (3) analyzing time variations between tenders; and (4) measuring tender forecast performance.…”

“…A completely new Bid Tender Forecasting Model (BTFM) was devised by Ballesteros-Pérez (2010) and extended by Ballesteros-Pérez et al (2012a, b, 2013a as a practical tool to help bidders improve their competitive bidding strategies and increase their chances of winning a contract. This tool, informally referred by its authors as the Smartbid model (Ballesteros-Pérez et al 2013b) (used hereinafter for the sake of simplicity) enables bidders to place their bids using statistical procedures based on previous bidding experiences that share the same Economic Scoring Formula (ESF).…”

Detecting abnormal and collusive bids in capped tendering

“…In this connection, new developments in the area of Bid Tender Forecasting have enabled bidders to implement new kinds of easy-to-use tools for increasing their chances of winning contracts [34,35,36]. Although these new tools are genuinely designed for bidders in capped tendering (tenders with an upper limit on price), some of their principles can also be applied by a Contracting Authority to detect which bidders do not follow a regular pattern, that is, their bids are extremely high or low.…”

“…Finally, Ballesteros-Pérez et al [34,35,36] developed a Bid Tender Forecasting Model (BTFM) applicable to capped tendering. This model capitalizes on a new conception of analyzing bidder behavior and presents its results via three kinds of graphs: iso-Score Curve Graphs, Scoring Probability Graphs, and Position Probability Graphs.…”