Simulation analysis of Awarding The Most Advantageous ender Based on Ranking Method
Date Issued
2012
Date
2012
Author(s)
Tseng, Ching-Cheng
Abstract
Abstract
All government procurements today are required by law to follow Government Procurement Act of 1998. As an index to the modernization of a country and a major force in boosting economic development, public infrastructure construction procurement is categorically the most important among all government procurements. As the quality of public infrastructure construction influences civil life, wealth, and safety, contractors must be selected carefully; otherwise, adversities may dwarf benefits. As stated in Article 1 of Government Procurement Act, “according to fair and open procurement procedures, enhancing procurement efficiency and effectiveness, and ensuring procurement quality,” in engineering procurement, quality is ensured only through the awarding of quality contractors based on fair and reasonable tender invitation and contract awarding procedures. In the procurement of engineering technical service, the most-advantageous-tender awarding method is good-faith based to award the most suitable contractor while guarding against malicious “low bids.” However, its fairness has been frequently questioned, especially when ranking is involved. A perusal of related literatures reveals an abundance of articles studying the fairness and rationality of the most-advantageous-tender awarding method and "dictatorship" resulting from "extreme grading". One criticism even goes as far as saying "most to be criticized is the one-person-decides-it-all dictatorship." Among these literatures, the majority involves fault prevention and remedies of the most-advantageous-tender awarding method, clearly implying the existence of such fairness issue. However, albeit the fairness concerns by engineering societies and academic circles induced from the observations of numerous engineering procurements, there is yet an in-depth discussion regarding its existence or details. This is due to the complexity of multiplicities in both bidders and evaluation committee members and difficulties in obtaining sufficient historical data for analysis. Furthermore, it is impossible to judge based on historical data who the best contractor is or whether an evaluation committee member is fair and reasonable. This study distances itself from the dilemma associated with historical data by applying Monte Carlo simulation to uniformly distributed tender evaluation scenarios. It reveals, when ranking is used, various possible effects related to evaluation fairness and rationality and, based on simulation results, seeks remedies to provide references to engineering supervising organizations and procurement agencies in amending relevant regulations and managing engineering procurements.
Keywords: the Most Advantageous Tender, Ranking method, Fairness, Rationality, Bidder, the Evaluation Committee
Subjects
the Most Advantageous Tender
Ranking method
Fairness
Rationality
Bidder
the Evaluation Committee
Type
thesis
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