Fair Ranking in Competitive Bidding Procurement: A Case Analysis

Fair and transparent procurement procedures are a cornerstone of a well functioning free-market economy. In particular, bidding is a mechanism whereby companies compete for contracts; when functioning well, the process rewards both the quality of the proposal, and the “reasonableness” of the quote. This way, both the company and the public win. The bidding process requires a fair and transparent ranking procedure. Once the parameters of the competition are established, the company issuing the bid is required by law to abide by those parameters. Not surprisingly, opposing interests may try to “game the system.” The more complex the service, the harder it is to rank competing bids. Complex services require complex ranking, which in turn makes undue influence more difficult to uncover. In this paper we analyze the case of two companies, Reilly Security and Contemporary Security, bidding for the contract of providing security during the Pan American games ([1]) in Toronto 2015: The Pan Am Games are the world’s third largest international multi-sport Games; they are only surpassed in size and scope by the Olympic Summer Games and the Asian Games. We argue that the ranking procedures did not reflect the quality of the bids, resulting in one of the companies submitting a substantially more expensive bid, and still winning the competition. The reader may gain information on this contentious matter by reading a number of newspaper articles: [2, 3, 4, 5]. Article [5] mentions the results presented in this paper. For the sake of full disclosure, it should be noted that the author works as a consultant, and in fact is on the board, of Reilly Security. c © 2014 The Authors. Published by Elsevier B.V. Selection and peer-review under responsibility of KES International.