In this second part, we will explain how the dynamics of a next tender process might also have some undesirable outcomes.
French transport company, Keolis, won a public tender in 2019 for the bus transportation rights in the Eastern provinces of the Netherlands. The contract, valued at 900 million Euros, was revoked in the summer of 2020 as reports showed that Keolis had signed fraudulent agreements with their subcontractors. With the contract already due in December, the government had to award Keolis a two-year emergency concession to limit welfare losses. This article will demonstrate, through a game-theoretical analysis, how this tender rewarded fraudulent behaviour at the expense of society, potentially setting a bad precedent. We will also explain how the government should redesign future tender processes, to incentivise ethical behaviour and discourage fraud.
While I had been utilising TWS Partners’ game theory methodology professionally for a few years, as well as training many Procurement professionals on the topic, I had never found myself in a position to utilise the methodology in my private life. Until the moment came around in late 2016 when we were looking to buy a second car, as we had family expansion under way…
Discussions about the efficiency of Christmas gifts is quite an interesting topic for economists.
Environmentally sustainable business models are tricky things to put in place, right?
