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Using a DEA-cross efficiency approach in public procurement tenders

Author

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  • Falagario, Marco
  • Sciancalepore, Fabio
  • Costantino, Nicola
  • Pietroforte, Roberto

Abstract

The paper addresses the topic of supplier selection in public procurement. According to European directives, when tenders are awarded through the “Most Economically Advantageous Tender” (MEAT) criterion, the awarding committee has to decide the tender evaluation criteria of the presented bids in advance. The authors propose a decision making tool that is aimed at helping the awarding committee in this difficult task and, at the same time, maintaining a transparent procedure in accordance with governmental procurement regulations and requirements as well as guaranteeing fair and equal evaluation of all bids. In this regard, the decision problem of supplier selection is addressed by applying an extension of the DEA (data envelopment analysis) methodology. The cross-efficiency evaluation is used for selecting the best supplier among the eligible candidates. The proposed technique allows the evaluation of quantitative data related to vendor selection and keeps the transparency features requested by public procurement. In addition, all bids are equally assessed according to the same objectively defined weights without any subjective setting by the public officers. The effectiveness and efficiency of the approach is supported by a case study that pertains to the tender of an Italian public agency.

Suggested Citation

  • Falagario, Marco & Sciancalepore, Fabio & Costantino, Nicola & Pietroforte, Roberto, 2012. "Using a DEA-cross efficiency approach in public procurement tenders," European Journal of Operational Research, Elsevier, vol. 218(2), pages 523-529.
    • Handle: RePEc:eee:ejores:v:218:y:2012:i:2:p:523-529
    DOI: 10.1016/j.ejor.2011.10.031
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    3. Alcaraz, Javier & Ramón, Nuria & Ruiz, José L. & Sirvent, Inmaculada, 2013. "Ranking ranges in cross-efficiency evaluations," European Journal of Operational Research, Elsevier, vol. 226(3), pages 516-521.
    4. Ruiz, José L., 2013. "Cross-efficiency evaluation with directional distance functions," European Journal of Operational Research, Elsevier, vol. 228(1), pages 181-189.
    5. Cheaitou, Ali & Larbi, Rim & Al Housani, Bashayer, 2019. "Decision making framework for tender evaluation and contractor selection in public organizations with risk considerations," Socio-Economic Planning Sciences, Elsevier, vol. 68(C).
    6. Davtalab-Olyaie, Mostafa & Asgharian, Masoud, 2021. "On Pareto-optimality in the cross-efficiency evaluation," European Journal of Operational Research, Elsevier, vol. 288(1), pages 247-257.
    7. Lorentziadis, Panos L., 2016. "Optimal bidding in auctions from a game theory perspective," European Journal of Operational Research, Elsevier, vol. 248(2), pages 347-371.
    8. Liu, Hui-hui & Song, Yao-yao & Yang, Guo-liang, 2019. "Cross-efficiency evaluation in data envelopment analysis based on prospect theory," European Journal of Operational Research, Elsevier, vol. 273(1), pages 364-375.
    9. Martínez, Ricardo & Sánchez-Soriano, Joaquín & Llorca, Natividad, 2022. "Assessments in public procurement procedures," Omega, Elsevier, vol. 111(C).
    10. Ebrahimi, Bohlool & Dhamotharan, Lalitha & Ghasemi, Mohammad Reza & Charles, Vincent, 2022. "A cross-inefficiency approach based on the deviation variables framework," Omega, Elsevier, vol. 111(C).
    11. Carrillo, Marianela & Jorge, Jesús M., 2018. "Integrated approach for computing aggregation weights in cross-efficiency evaluation," Operations Research Perspectives, Elsevier, vol. 5(C), pages 256-264.
    12. Ekici, Ali, 2013. "An improved model for supplier selection under capacity constraint and multiple criteria," International Journal of Production Economics, Elsevier, vol. 141(2), pages 574-581.
    13. Papakonstantinou, Athanasios & Bogetoft, Peter, 2013. "Short communication: DEA based auctions simulations," European Journal of Operational Research, Elsevier, vol. 231(2), pages 507-511.

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