Reverse auction bidding is an online auction system. A purchaser's primary objective in using a reverse auction is to obtain the lowest possible bid for goods and services on a construction project. With this type of bidding, it is normal that the purchaser will only consider price, instead of a bidders' work history and experience. As a reverse auction is an online service, the common misperception is that a purchaser can reach a broader market to obtain the lowest possible price. It is a controversial bidding system. No previous research has been undertaken by the Texas A&M University Reverse Auction Bidding study group into potential owner interference with the bidding system for a reverse auction. Six bidders were asked to participate in the Reverse Auction Bidding process for a series of construction projects in Houston. Each participant was also asked to complete a Keirsey Temperament Sorter Test type I and II to determine each participant's personality. After the tests, the six participants competed in an online reverse auction bidding game. The primary objective of this research is to analyze the impact of an owner's interference in a reverse auction bidding scenario. In this test, one of the six bidders acted as the owner's surrogate to interfere with an ethical process and reduce the owner's costs. The other five bidders were unaware of the surrogate's role in the bidding. The primary directive given to the surrogate bidder was to drive down the cost of the projects. The results for the research study show that the owner's surrogate can affect the bidding process. Interference results in reduced returns for the bidders when compared to an uncompromised bidding scenario. It is clear that the method used is unethical.

Participating in an auction and winning items by placing bids has been in practice since at least 500 B.C. Auctions have evolved since then and anyone can now participate in one online and buy items ranging from clothes, electronics, automobiles and homes using online auction websites, such as eBay. A Reverse Auction varies from the traditional style of Auction where items or services are won by placing successive higher bids until the auction ends. The study of Reverse Auction was first introduced to Texas A & M University in 2004 and continues today, using a SQL based web system. This current research provides a detailed statistical analysis of the fourth case study in this long running work. This fourth case study involved the participation of five bidders who had no prior experience in Reverse Auctions. A Microsoft Access database system and ASP web based user interface was developed and used to conduct these initial studies. However, due to the limited capability of the Access system to handle more than a limited number of connections or bidders, a Microsoft SQL database and web system was developed in 2006 and has been used in all subsequent studies. Case studies have involved up to ten participants. The results from the fourth case study show that a Reverse Auction can result in an increase in the average cost of the job to the owner. Also, there is evidence of game play amongst the bidders and against the purchaser that causes their profits to rise as they gain proficiency in the game. This behavior has been termed as 'tacit collision', but it is considered a byproduct of the system and not illegal behavior. This study analyzes the fourth study data to investigate if the behavior termed "tacit collusion" is evident in the bidding data. This analysis is completed by performing a detailed statistical analysis of the bidding data. Analysis of the profit percentages illustrates the different stages of the game play amongst the bidders. This game play behavior is illustrated by plotting average number of bids to the profit made by each bidder. The data clearly suggests that the players became efficient in their bidding strategy, although some bidders are more efficient than others. This observation negates the common conception that Reverse Auctions will result in lowering average costs for the owners. The individual data of bidders for bids and profit reveal why some players were able to obtain higher than average results and why the others were not. This study can be taken further by analyzing the patterns of the successful and unsuccessful players to determine what causes them to gain or lose profits.

Reverse Auction Bidding (RAB) study into the construction industry commenced at Texas AandM (TAMU) University in 2004 from the work of a graduate student who was interested in the reasons for RAB being considered unethical by some. This thesis is the eleventh study into Reverse Auction Bidding building on the work of the previous researchers. Previous case studies investigated a number of different competitive situations ranging from three to ten players. In the last few studies, the bidding behavior and performance of participants in the RAB process is being observed with respect to their personality. Personality for each player is tested using the Keirsey Temperament Sorter (KTS) test. The KTS describes four major personalities and four role variants in each of the personalities, summing up to sixteen role variants. There appears at this stage a strong correlation between personality type and game performance. This study extends the work on the Guardian personality type to investigate the four sub-types of this personality. This study builds on the previous work by analyzing the four different Guardian role variants being Provider, Protector, Inspector and Supervisor. The aim of the research is to investigate whether there is a difference in game returns between the personality type from within this group. The study involves a game scenario involving a facility manager hiring the contractors who submit the lowest bid for the assumed renovation project. The study also gives the contractor a modified KTS questionnaire that can be used by them for hiring an individual for the position of an estimator with a competent personality. The individuals were selected from undergraduate Construction Science students with limited experience. The game lasted for nine rounds, with the statistical results of the bidding and contract data showing patterns similar to the previous studies. The results show us that the individuals with a role variant of Providers provided the highest return in this case study, although a single case study is insufficient to draw formal conclusions on this matter, the result points to future research.

The advancement of computer technology is playing an important role in almost all fields in the construction industry in the current era. It has become a tool for exchanging legal contract information, including bid data. In the traditional closed bidding system, the bidders were unaware of their competitors' bid quotes and had no opportunity available to make a counter an offer to the bid at a different level. However, in reverse auction bidding (RAB), contractors can track their competitors' bids and take the given opportunity to re-bid the projects at lower rates. Unlike traditional auctions, where buyers raise their purchasing prices to outbid competitors, reverse auctions permit buyers to purchase goods and services from suppliers who are encouraged to sell them at the lowest price. The benefit of the reverse auction bidding is either that the vendors are able to re-bid, or lower their bid multiple times. This is an example of transparent economic information. Van Vleet initiated the ongoing Reverse Auction Bidding study at Texas A&M University. Van Vleet had created a Microsoft Access database system and ASP web based user interface for RAB study. The methodology developed by van Vleet is still being used today, and this study has been extended into analyzing different personality types and the impact on the bidding system. In the previous studies conducted by different researchers in TAMU, the performance of participants in the RAB process along with their behavior are being observed with respect to their personality. Personality of each player is tested using the Keirsey Temperament Sorter (KTS) test. The previous study states that there appears to be a strong correlation between personality type and game performance. The first case study conducted by van Vleet involved five participants who had no prior experience in Reverse Auction Bidding. The number of participants has varied from three to ten participants. This research has been conducted on graduate students of the Construction Science Department of TAMU who have no prior experience in RAB. In continuation with the previous studies held in TAMU, the results show that there is an observable pattern in the bidding strategy of first time bidders while taking part in Reverse Auction Bidding.

Reverse Auction Bidding (RAB) is a recently developed procurement method that can be used by the construction industry. The technique is different from a traditional auction system, since RAB system uses a bidding activity method that is completed anonymously by pre-qualified bidders during a fixed auction time. The basic premise for the auction is that the current best auction price is available for viewing during the whole auction process by both bidders and owner. The apparent incentive is for noncompetitive bidders to lower the price. There are however controlling factor beyond the reach of owners, such as market demand, lending restrictions, stakeholder expectations and risk tolerance levels, that impact on price levels. However, owners continue to attempt to drive down prices using this technique. A study into the mechanics of RAB was launched at Texas A&M University in 2004. This ongoing study of RAB continues to this time with eighteen case studies. This nineteenth study looks at the time series bid data from some of the prior work. Nine case studies were selected from the previous case studies. These nine studies provided untainted data with 6674 RAB bid arrivals by prior investigator actions. This study concerns the statistical process of bid arrivals with time. The hypothesis to be tested is that the RAB bid arrivals timing can be modeled with a statistical process. The analysis reviewed the fit for several types of distribution, including Gaussian and Poissionian. The best fit was modeled by non-homogeneous Poisson process (NHPP). The first conclusion from the analysis is that RAB bid arrivals follows a Poisson process, termed non-homogeneous Poisson process (NHPP). The second conclusion is that the controlling Poissionian process has a square root factor. The NHPP model for RAB provides a tool for future studies of RAB in real time. Future work is suggested on the inter-time periods for the bidding.

Reverse Auction Bidding is a recently developed auction method. In this form of bidding process, the roles of the bidders and the owner are interchanged in terms of the form of the economic transaction. The owner's objective is to drive the unit rates down and the bidder's objective is to maintain an acceptable profit level. A study into Reverse Auction Bidding commenced at Texas A&M University in 2004 and continues to this time, with this the eighteenth study in the series. This study is the second multi-group study in the research. In this study, a multiple group comparison was made between different numbers of bidders, with Games One, Two and Three having three, four and ten bidders respectively. All participants were faculty and students from the Department of Construction Science. The critical requirement for the participants is that they should have no prior experience using the Reverse Auction Bidding system. The eighteen studies have concentrated on new players, with future studies planned for repeat participants. A number of the recent case studies have shown personality has an impact on the performance of the bidders. However, this work was not controlled for personality, as the research objective was to determine the impact of a different number of bidders in a game. The Keirsey Temperament Sorter test was completed by all participants so that the results could be understood in terms of personality impact on the level of return to each participant. The results showed the number of bidders has a significant impact on the individual returns confirming the earlier work on varying the number of bidders. An increase in the number of bidders was shown to lead to a more competitive economic environment, which given usual economic circumstances lead to a reduction in the number of firms interested in bidding, for the self-evident economic reasons. This work points to the need to investigate a bidding group size of five or six, which is likely to be the self-constrained upper limit in a real economic system. Some interesting observations on the personality types suggest that further work is required in this area.

If a correlation exists between cost and project delivery system then this is crucial knowledge for any group organizing a new construction project. It has been observed anecdotally that the construction cost per student of public elementary schools has been observed to continue to increase in the state of Texas, even with the recent downturn in the economy. The recent economic depression in the USA has seen construction material costs stagnate and construction costs dropping. This is a direct result of the competitive nature of a market that has a lack of business. The issue of a rising cost at the time of a falling market is of more than a passing research interest to school superintendents and the people of Texas. This study investigated the relationship between cost and project delivery systems. A survey was sent to all school superintendents in Texas requesting recent data on elementary school enrollment, project delivery type and construction costs. One hundred and thirty six responses were received from one thousand and seventy six Texas school districts. A comparative means test was used to determine if a relationship exists between construction cost per student and project delivery system for public elementary schools in Texas. The research shows that Texas school districts are primarily using two types of project delivery systems for their new school construction, Construction Management at Risk and Competitive Sealed Proposals. After comparing the average construction cost per student for these two project delivery systems, the statistical analysis showed that Competitive Sealed Proposals cost approximately four thousand dollar less per student than Construction Management at Risk. The clear question is then as to why are districts using Construction Management at Risk when the comparative benefits of the contract type are not worth this amount of money per student.