Preliminary communication
https://doi.org/10.17559/TV-20160212144243
Effect of Electronic Reverse Auctions on Competition and Abnormally Low Bids in Public Construction Procurement
Tomáš Hanák
orcid.org/0000-0002-7820-6848
; Faculty of Civil Engineering, Brno University of Technology, Veveří 95, 602 00 Brno, Czech Republic
Ivan Marović
orcid.org/0000-0003-1524-0333
; Faculty of Civil Engineering, University of Rijeka, Radmile Matejčić 3, 51000 Rijeka, Croatia
Nikša Jajac
; Faculty of Civil Engineering, Architecture and Geodesy, University of Split, Matice hrvatske 15, 21000 Split, Croatia
Abstract
The increasing complexity of construction projects imposes the need to address various aspects of project management in more detail. The success of a construction project depends on many variables and the process of supplier selection is certainly one of them. In recent years, the importance of electronic reverse auctions use in public sector construction procurement has been increasing, since they can bring substantial price savings. However, auctions are also criticized since they may result in the submission of abnormally low bids. This paper therefore aims to explore the impact of electronic reverse auctions on the competitive environment in public works contracts and on the occurrence of abnormally low bids. The results of quantitative research on Czech construction tenders revealed that the use of auctions decreases the number of bidders while increasing the probability of occurrence of abnormally low bids.
Keywords
abnormally low bid; competition; construction project management; electronic reverse auction; public procurement
Hrčak ID:
200610
URI
Publication date:
26.5.2018.
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