Determining Collusive Behaviors Control Mechanisms in Engineering Procurement Under the Lowest-Price Bidding System

Procurement practices are often characterized by competitive tendering, which aims to ensure transparency, probity, and value for money in the process of acquiring goods and services. The lowest-price bidding approach, which considers price as the sole criterion for selecting the winning bidder, is one of the most popular bidding methods in the current bidding process. Because of the imperfect development level, legal environment, credit system, and other factors, abnormal behaviors, including bid rigging and collusion, still occur in the construction industry when applying the lowest-price bidding method. Despite this, practical and effective methods and tools for preventing these behaviors are still lacking. Thus, this research developed a theoretical model that considers the reserve price and the cost price of the project and proposed methods for setting these prices that are compatible with practice. Additionally, the proposed methods and models were applied to an actual construction project in order to demonstrate their feasibility. In addition to providing tenderers with a basis for selecting qualified contractors, this research will mitigate abnormal behavior, improve the lowest-price bidding mechanism, and purify the bidding process.