Competitive tendering — OR workers beware!

Abstract

In a recent OR Insight editorial, Stephen Ward drew attention to the increasingly large number of contracts awarded by competitive tender and suggested that this presented a major opportunity for OR. The editorial was careful to point out that the generally accepted basic model has not been used widely, and went on to explain a series of different areas related to tendering where OR could make a contribution. It concluded that coordination of all the relevant tendering expertise is more important than estimating the optimum price. Such advice is helpful and perhaps more important than may initially appear. Recent research has helped to clarify why some of the basic models are not widely used, and reinforces the point made in the editorial. In fact, it seems that simplistic use of these models is dangerous and that the note of caution needs stressing.