Bid rigging can pose serious problems in procurement auctions.
EE&MC has developed effective statistical tools designed to detect bid rigging and tailored to the individual needs of the client. These tools serve as a deterrent to future collusion thereby lowering prices and enhancing efficiency in the relevant industry.
These models are in line with recent academic literature and have proven themselves to be accurate representations of the underlying bidding strategies. These models include a regression on the identity of the lowest bidder, another regression on the ranking of all bidders and statistical models testing for structural breaks and variance screens. These econometric techniques can sometimes be computationally intensive. They are programmed by EE&MC in standard statistical software.
EE&MC has successfully implemented bid rigging detection tools for previous clients by integrating programming code directly in client SAP systems to act as an internal warning system for collusive bidding.