3 ms·

> No, the lowest bidder model is still used around the world because it is the simplest way to assign a contract without (the public manager) being responsible

by badpun 4y ago

> No, the lowest bidder model is still used around the world because it is the simplest way to assign a contract without (the public manager) being responsible of the decision to award it to company A instead of company B. You've made it sound as if it's about avoiding responsiblity, while the motivating force behind this model is to avoid creating situations which would incentivise corruption. When you take away any decision-making power from the official awarding the bid and he basically just has to follow a pre-written algorithm, he can't be corrupted.

kqr 4y ago
That might be the goal, but it's easy for even such an official to facilitate the process for individuals.
jaclaz 4y ago
Yes. I have made it sound like that because I wanted it to sound exactly like that. The "official" motivating force is the one you mentioned, but that doesn't mean that it is the actual one, nor that lowest bid is actually the best possible formula[0]. It is the up-to-date "the algorithm made me do it" version of the "officer, the devil made me do it" excuse when (if) the project is delayed or goes over budget, the builders are usually considered the culprits (whether it is actually their fault or not) and they were selected by applying the algorithm (so all is fine). Consider how you (private person) would normally award the construction of your house, likely you would: 1) find a list of local contractors (mostly from world of mouth) 2) get from 3-5 of them offers 3) compare them, analyze them with your arhitect/engineer, talk with offerers about possible mistakes/inconsistencies 4) finally choose the builder (more often than not you will choose not the lowest bidder but rather the one that overall seems to you more capable/reliable/interested in the work) With what a (say) local council would probably do to build (still say) a small school: 1) publish a request for bids 2) obtain anything between (say) 10 and 200 offers 3) award the contract to the lowest (and valid according to the algorithm) offer It is clear that in your private case you have no incentive for corruption, but - in order to avoid the risk of corruption - the council just awarded the contract to a "number". This "number", more likely than not, is the result of "blind shooting", the builders need a certain number of contracts and they need to make many offers, and have no time to analyze them in detail. [0] as a matter of fact "pure" lowest bid is relatively rare there are usually a number of corrective items either in the algorithm or in the norms regulating the bid, in some cases they can be effective, in some cases they introduce some perverse incentives to the offerers.
baryphonic 4y ago
Why wouldn't corrupt people just bid low and give the public manager a bigger kickback? And if the contractor & public manager are both corrupt, wouldn't the job likely be shoddy anyway? I spoke with a family member at a wedding recently who manages civil engineering projects in his city (he himself is a civil engineer), a regional transportation hub. He said it's all lowest bidder with one exception: a contractor with a history of shoddy work. His reasoning was that he'd really have to justify going with anyone but the lowest bidder. In other words, he'd be responsible for the outcome. Keep in mind, most of his job is ensuring that the city's spec is followed and if not that contractors fix shoddy work. It's non-trivial, certainly couldn't be replaced by an algorithm and gives him pretty significant skin in the game (if he did his job poorly and let shoddy construction make it through, he'd be out of a job).
- jaclaz 4y ago
  >Why wouldn't corrupt people just bid low and give the public manager a bigger kickback? Well, if the public manager has no powers in the assignment, there is no reason why the builder should "pay" him/her, from this point of view lowest bid is effective as an anti-corruption method. And by bidding low the builder will have less available money to possibly attempt to bribe anyone. But then (maybe - just hypothetical) once the lowest bidder is awarded the contract they will find each and every possible way (including bribing) to get more money for the contract, changes, improvements, extensions, etc.. The usual counter-argument is that all builders are the same, so if you award the contract to (say) the 2nd lower bidder, they will make exactly the same, only starting from a higher "base", There are often very fine lines between "contributing to bankrupcy of builder", "paying a fair price" and "spend too much public money".

by badpun 4y ago

kqr 4y ago

That might be the goal, but it's easy for even such an official to facilitate the process for individuals.

jaclaz 4y ago

Yes. I have made it sound like that because I wanted it to sound exactly like that. The "official" motivating force is the one you mentioned, but that doesn't mean that it is the actual one, nor that lowest bid is actually the best possible formula[0]. It is the up-to-date "the algorithm made me do it" version of the "officer, the devil made me do it" excuse when (if) the project is delayed or goes over budget, the builders are usually considered the culprits (whether it is actually their fault or not) and they were selected by applying the algorithm (so all is fine). Consider how you (private person) would normally award the construction of your house, likely you would: 1) find a list of local contractors (mostly from world of mouth) 2) get from 3-5 of them offers 3) compare them, analyze them with your arhitect/engineer, talk with offerers about possible mistakes/inconsistencies 4) finally choose the builder (more often than not you will choose not the lowest bidder but rather the one that overall seems to you more capable/reliable/interested in the work) With what a (say) local council would probably do to build (still say) a small school: 1) publish a request for bids 2) obtain anything between (say) 10 and 200 offers 3) award the contract to the lowest (and valid according to the algorithm) offer It is clear that in your private case you have no incentive for corruption, but - in order to avoid the risk of corruption - the council just awarded the contract to a "number". This "number", more likely than not, is the result of "blind shooting", the builders need a certain number of contracts and they need to make many offers, and have no time to analyze them in detail. [0] as a matter of fact "pure" lowest bid is relatively rare there are usually a number of corrective items either in the algorithm or in the norms regulating the bid, in some cases they can be effective, in some cases they introduce some perverse incentives to the offerers.

baryphonic 4y ago

Why wouldn't corrupt people just bid low and give the public manager a bigger kickback? And if the contractor & public manager are both corrupt, wouldn't the job likely be shoddy anyway? I spoke with a family member at a wedding recently who manages civil engineering projects in his city (he himself is a civil engineer), a regional transportation hub. He said it's all lowest bidder with one exception: a contractor with a history of shoddy work. His reasoning was that he'd really have to justify going with anyone but the lowest bidder. In other words, he'd be responsible for the outcome. Keep in mind, most of his job is ensuring that the city's spec is followed and if not that contractors fix shoddy work. It's non-trivial, certainly couldn't be replaced by an algorithm and gives him pretty significant skin in the game (if he did his job poorly and let shoddy construction make it through, he'd be out of a job).

jaclaz 4y ago
>Why wouldn't corrupt people just bid low and give the public manager a bigger kickback? Well, if the public manager has no powers in the assignment, there is no reason why the builder should "pay" him/her, from this point of view lowest bid is effective as an anti-corruption method. And by bidding low the builder will have less available money to possibly attempt to bribe anyone. But then (maybe - just hypothetical) once the lowest bidder is awarded the contract they will find each and every possible way (including bribing) to get more money for the contract, changes, improvements, extensions, etc.. The usual counter-argument is that all builders are the same, so if you award the contract to (say) the 2nd lower bidder, they will make exactly the same, only starting from a higher "base", There are often very fine lines between "contributing to bankrupcy of builder", "paying a fair price" and "spend too much public money".