Effects of full transparency in supplier selection on subjectivity and bid quality

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Telgen, Jan and Schotanus, Fredo (2010) Effects of full transparency in supplier selection on subjectivity and bid quality. In: 4th International Public Procurement Conference, August 26-28, 2010, Seoul, South Korea.

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Abstract:In this paper, we highlight a number of problems
arising with a commonly used supplier selection method: the
weighted factor score method. We discuss the behaviour of this
method with respect to weighting, scaling issues, and relative scoring.
Assuming that there is no convex dominance, we formally prove that
with the same supplier selection method, we can make any supplier
win by judiciously choosing the right parameters of the awarding
mechanism. This means that any supplier can win if certain
parameters are not published in a request for a proposal. This result
applies to both absolute and relative scoring methods. Also, we prove
that the buyer should fully disclose all details of the awarding
mechanism to suppliers in order to receive better bids. The practical
implications of our results are far reaching for procurement, both
public and otherwise: full transparency and disclosure of all details
regarding weights and awarding schemes is not only required to
avoid subjectivity in supplier selection, but it also leads to better bids
from suppliers.
Item Type:Conference or Workshop Item
Faculty:
Management and Governance (SMG)
Research Chair:
Research Group:
Link to this item:http://purl.utwente.nl/publications/74072
Conference URL:http://www.ippa.org/4thConferenceNews.html
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