WO2012095844A1

WO2012095844A1 - Method and system for electronic tenders

Info

Publication number: WO2012095844A1
Application number: PCT/IL2012/000020
Authority: WO
Inventors: Boaz Dolev; Ilan YOM TOV; Pinhas ROSENBLUM; Shmuel OPPENHEIMER; Teimuraz NETANELOV
Original assignee: Electronic Vision Systems Ltd.
Priority date: 2011-01-13
Filing date: 2012-01-11
Publication date: 2012-07-19
Also published as: IL210661A0

Abstract

Provided by the invention are a method and system for conducting electronic tenders. Embodiments of the invention include the steps of applying tender input parameters to a tender simulation process, activating the simulation process, obtaining process results and recommendations for an optimal tender methodology to be used in order to optimize the tender results.

Description

METHOD AND SYSTEM FOR ELECTRONIC TENDERS

FIELD OF THE INVENTION

[0001] The present invention relates to the field of electronic tenders. Specifically, the invention relates to optimization of electronic tenders.

BACKGROUND OF THE INVENTION

[0002] Tender processes have been developed in order to receive competitive offers for the sale or procurement of goods and services from bidders and in order to optimize sale revenues and procurement savings. Tenders may be open to all bidding participants or may be restricted to pre-qualified bidding participants.

[0003] Public sector organizations are legally obliged to publish tenders for goods and services.

[0004] Many tender methodologies exist, some of which are listed and described below. Sealed First-Price/Silent Submission Methodology

[0005] In this type of tender all bidders submit sealed bids so that no bidder knows the bid of any other participant. The highest bidder pays the price they submitted. There may be a starting price reserve, which is typically the minimum sale price set by the seller. In a tender meant for procurement the starting price is defined as the maximum that the buyer is prepared to pay for the goods or services. This methodology may optionally include no maximum price.

English Methodology

[0006] In this type of tender participants bid openly against one another, with each subsequent bid better than the previous bid. Bids may be submitted electronically with the highest current bid publicly displayed. The tender ends when no participant is willing to bid further, at which point the highest bidder pays their bid. The methodology can be applied to single or multiple items, where the collective sum of all items is bid upon with one bid.

[0007] The English Methodology can be also applied to a tender which begins with a high asking price which is lowered until a participant is willing to accept the price.

Japanese Methodology

[0008] In this type of tender bidders must bid at each advertised price. Failure to accept a bid removes the bidder from participating in the tender. Bidding continues until only one bidder remains. This methodology can be applied to single or multiple items, where the collective sum of all included items is bid upon with one bid.

Dutch Methodology

[0009] This type of tender begins with the announcement of a high asking price or a predetermined reserve price, which is lowered until a participant is prepared to accept the price. The methodology can be applied to single or multiple items, where the collective sum of all included items is bid upon with one bid. The winning participant is the first to accept the last announced price.

Second Price Methodology

[0010] In this type of tender multiple identical items are offered for sale. More than one winning bidder can be appointed. Bids can be placed on all items or on any number of desired items. Bidders indicate the price they are willing to pay for each item but in the end, all winning bidders pay the same price for each of the items, which is the lowest qualifying successful bid. If there are more successful bids than items available, priority is given to bidders who submitted their bids first.

Amount Distribution Methodology

[001 1] In this type of tender the seller / buyer wishes to purchase or sell a large amount of goods. Candidates may not be able to fully deliver all the goods or do not wish to provide the entire amount at the current price. In this situation, more than one winner is declared based on the amount of items requested during the tender. An item's price for the winning bidders is determined by the last price each one offered during the tender or it is the price of the last ranked bidder. Public Offerings Methodology

[0012] This methodology is used for raising capital. Bids are taken from the lowest yield (highest price) until a predetermined amount is raised.

Multi Stages Tender Methodology

[0013] This methodology is used when more than one tender stage is required. In the first stage the tender is managed using a standard methodology (e.g., one of the above mentioned methodologies). Towards the end of the tender, the system can offer the buyer to move to "Best And Final" (BAFO) stage. At this point, only the group of leading candidates is allowed to place the last bid.

Double Tender Methodology

[0014] In this type of tender potential buyers submit their bids and potential sellers submit their asking price simultaneously. The price that clears the market is determined and all sellers who asked for less than the determined price sell at the determined price and all buyers who bid more than the determined price buy at determined price.

[0015] Currently, electronic tenders are possible in which participants bid for products and services over the Internet. The English Methodology is currently the most commonly used tender methodology in electronic tenders.

[0016] Typically, each tender is held in a single, set methodology which cannot be changed even if it becomes clear during the tender that the set methodology cannot obtain optimal results. Also, if bidders are added during a tender, there is no way to assess the added bidder attributes (such as quality, history of service, etc.) on-line.

[0017] Thus, there is currently no method for optimizing a tender process on-line.

SUMMARY OF THE INVENTION

[0018] Embodiments of the present invention provide a method and system for optimizing electronic tender results while streamlining the tender process. Embodiments of the invention use different tender methodologies in order to obtain the optimal procurement savings and optimum sale rates. [0019] In one aspect of the invention there is provided a method for conducting an electronic tender, the method comprising: applying tender input parameters to a tender simulation process; activating the tender simulation process; obtaining tender simulation process results; and providing recommendations for an optimal tender methodology based on the tender simulation process results.

[0020] In one aspect the method includes: applying a plurality of tender methodologies to the tender simulation process; obtaining tender simulation process results; selecting an optimal result from the tender simulation process results; and providing recommendations for the optimal tender methodology based on the optimal result.

[0021] In some aspects activating the tender simulation process comprises dynamically detecting bidder characteristics and determining an optimal tender methodology based on the detected bidder characteristics.

[0022] In some aspects the method may include grading the tender input parameters to obtain graded parameters. The graded parameters may be calculated to obtain the tender simulation process results.

[0023] In some aspects the method may include splitting the electronic tender into multiple electronic tenders based on the tender simulation process results. The splitting may be based on a predefined grouping of items or bidders.

[0024] In some aspects the method may include applying binding electronic signatures and/or a time stamp to the tender input parameters.

[0025] In some aspects applying tender input parameters comprises applying existing tender templates to generate a new tender and/or to modify the new tender characteristics.

[0026] In some aspects the method enables a tender administrator to change tender parameters in real time

[0027] The tender simulation process may be an on-line process.

[0028] Some aspects of the invention provide a system for conducting an electronic tender. The system may include a server to receive tender input parameters and to apply the tender input parameters to a tender simulation process; a processor to run the tender simulation process and to provide tender simulation recommendations based on the tender simulation process; an input device in communication with the server, the input device to input the tender input parameters; and an output device in communication with the server, the output device to present the tender simulation recommendations.

[0029] The system may include a data repository to store information related to tender input parameters, the data repository is in communication with the server.

[0030] In some aspects the output device comprises a display to present the tender simulation recommendations. The output device may include a graphical user interface, said user interface comprising an indication of bid timing constraints.

[0031] The system may also include a module for applying a binding electronic signature and/or a time stamp to tender input parameters.

[0032] The system can include a multi stage tender, beginning with secure sealed tender, continuing a second stage with English/dutch method and a third stage which is the best and final stage.

BRIEF DESCRIPTION OF THE FIGURES

[0033] The invention will now be described in relation to certain examples and embodiments with reference to the following illustrative figures so that it may be more fully understood. In the figures:

[0034] Fig. 1A schematically illustrates an electronic tender optimization process, according to one embodiment of the invention;

[0035] Fig. IB schematically illustrates a method for regulating a tender methodology according to an embodiment of the invention;

[0036] Fig. 2 schematically illustrates a system for conducting an electronic tender, according to an embodiment of the invention;

[0037] Fig. 3A schematically illustrates a method for bid optimization according to an embodiment of the invention;

[0038] Fig. 3B schematically illustrates one example of the method described in Fig. 3 A;

[0039] Fig. 4 schematically illustrates a method for bid optimization in which bidder characteristics are factored in to the final recommendation, according to an embodiment of the invention; and [0040] Fig. 5 schematically illustrates an interactive process performed between an automated optimization algorithm and a bid administration function, according to an embodiment of the invention.

DETAILED DESCRIPTION OF THE INVENTION

[0041] Embodiments of the present invention provide a method and system for optimizing electronic tenders. Embodiments of the invention provide a method and system that manage tenders, typically by utilizing traditional tender methodologies in an optimal way.

[0042] Embodiments of the invention may be applied at all stages of a tender; inception, publishing and storage of tenders.

[0043] Some embodiments include dynamically detecting bidder characteristics and modifying the tender methodology based on the detected bidder characteristics.

[0044] Embodiments of the invention allow use of previous bid experience to be applied to future bids by generating bid templates based on previous successful bids.

[0045] According to one embodiment different tender methodologies may be considered on-line (real live tender) or off-line (theoretical simulated tender), typically by simulating the bidding process using different methodologies. Based on the simulation results recommendations for an optimized process are issued. A tender administrator may then use the recommendations and update the tender process on-line or the process may be updated automatically based on the issued recommendations.

[0046] A method and system for calculating a tender methodology score are provided according to one embodiment of the invention. The method may include the steps of receiving tender input parameters; applying a grade to each tender input parameter; calculating a tender methodology score by aggregating the graded tender input parameters and applying the aggregated parameters to a tender simulation process using a plurality of tender methodologies to obtain a score for each tender methodology; selecting the tender methodology yielding the best score; and providing a recommendation for a tender methodology based on the best score. [0047] Fig. 1A schematically illustrates a method for electronic tender optimization, according to one embodiment of the invention. Tender input parameters are applied to a tender simulation algorithm (1 10). A tender simulation is activated using the applied parameters ( 120) and an optimal tender method is determined based on the simulation results (150). The determined optimal method may be further used by a tender administrator to regulate the tender methodology, for example, as described in reference to Fig. IB.

[0048] Tender parameters typically include data and information details relevant to the bidding process such as bidder attributes (quality, historical services offered, etc.)

[0049] As schematically illustrated in Fig. IB the process of tender simulation and optimization may include using a tender simulator (1 1) which receives input (e.g., tender input parameters (12)) from various data sources using this data to provide a simulation "score" which may be used later on to decide on bid methodology. The tender parameters (12) may be submitted directly to the tender simulator (1 1) or through a tender administrating function (10). The tender simulator (1 1) outputs tender outputs and recommendations (15).

[0050] Tender input parameters are used by the tender simulator (1 1). According to one embodiment the purpose of the tender simulator (1 1) is to apply a plurality of different tender methodologies to a tender process and generate possible tender result from which the optimal result may be selected and based on the optimal result, recommendations for an optimized tender process may be derived. The tender simulator (11) may dynamically detect and take into consideration bidder characteristics and responses, as well as other input.

[0051] According to one embodiment the tender simulator (1 1) provides methodology selection (13). Methodology selection (13) may be performed by dynamically modifying the bidding methodology and preferences while testing for the best process results. The best tender methodology is then selected, optionally by an automated algorithm, and may be reported to the tender administrating function (10). Methodology selection (13) may take place at the inception of the bidding process and/or during the actual on-going bidding process. [0052] The tender simulator (11) may also provide time considerations (14). Time considerations (14) are typically built in algorithms which control the overall bidding time and may dynamically update time settings according to participant's behavior, their bidding characteristics and other relevant input. These algorithms may reduce or extend the total bidding time for the purpose of optimization.

[0053] According to one embodiment algorithms based on statistical models analyze the bidding process including the methodology selection (13) and/or time considerations (14) and provide recommendations (15) to the tender administrating function (10).

[0054] The tender administrating function (10) may allow manual inputs or override inputs to a bidding process. These inputs may modify the performance of the tender and may determine the tender methodology at any time or phase of an ongoing tender. The tender administrating function (10) is capable of starting, pausing, stopping and restarting the tender process while, optionally, sending notifications to participants.

[0055] The tender administrating function (10) is capable of appointing bidders as participants in the bidding process as well as declaring a tender buyout winner thereby terminating the process.

[0056] Tender parameters (12) applied to the bidding process may refer to various data and information details relevant to the bidding process. This data may dynamically influence the bidding process and determine the final results and tender recommendations (15).

[0057] The tender parameters (12) consist of, for example, additional bidder attributes such as quality and historical services offered when assessing submitted bids or quotes, business intelligence information, comparative bidder data (e.g., a combination of accrued data as well as vendor history which can influence the declaration of a bidder winning) and time information. Some other bid parameter examples include bid methodologies (e.g., sealed first-price/silent Methodology, English Methodology, Japanese Methodology, Dutch Methodology, Second Price Methodology, Amount Distribution Methodology, Public Offerings Methodology, Multi Stages Tender Methodology and Double Tender Methodology or any other known tender methodology), price lists, time constraints, messages & ratings. Tender parameters (12) may also be obtained from third party companies, for example, to verify security and financial information related to bidder submitted data.

[0058] Tender parameters (12) may be inserted at any time and may dynamically influence the bid process and consequently the bid results.

[0059] Tender parameters (12) may be evaluated and graded in order to be applied to the automated decision process, for example as described below.

[0060] Fig. 2 schematically illustrates a system which includes a bidding process environment and components, according to an embodiment of the invention.

[0061] According to one embodiment the system 200 includes an input device, such as tender administrator facility (20) through which tender input parameters are submitted. The tender administrator facility (20) may also include an output device through which tender simulation outputs and recommendations may be received and/or presented. In other embodiments an output device may be a separate and/or remote unit. The output device may be used to present information to a tender administrator and/or to participants in the tender.

[0062] The tender administrator facility (20) is in communication with a bidding environment (21). The bidding environment (21) is the medium through which online bidding takes place, providing the tender administrator facility (20) and bidding participants (23) with a secure site for the interactions to take place. Typically the bidding environment (21) is a software/hardware system, such as a server (24). The bidding environment (21) typically operates across a network using, for example, a Local Area Network, Wide Area Network, a private Network or other appropriate networks.

[0063] Bidding participants (23) include parties participating in an ongoing bid by offering relevant information and terms for the ongoing bid.

[0064] The bidding environment (21) medium quality may be monitored and supported by providing solutions for technical constraints such as connectivity and speed thus ensuring a fair bidding environment.

[0065] Bidding participants (23) may register within this medium and receive available tender information on all impending bids. Information may be displayed on an appropriate user interface. For example, information regarding bid timing constraints, such as bid remaining time, may be displayed on a monitor screen using different shapes and colors to indicate remaining time, time lapsed, etc. Other tender data such as background data on the products, pricing, bidder history (e.g., profiling and qualities) and all other information published by the bidders may also be displayed to the bidding participants (23).

[0066] The system 200 may also include a data repository (22) of general data related to bidding participants, products pricing and other relevant information. According to one embodiment the data repository (22) is intended to provide the tender administrator facility (20) with real-time business intelligence such as product quality, historical services offered and bidding quotes. This business intelligence information may be derived through the assessment of acquired bid data. Other information that may be provided via the data repository (22) includes RFI (Request for Information), RFP (Request for Proposal), RFQ (Request for Quote), EOI (Expression of Interest), RFA (Request for Application) and RFD (Request for Documentation).

[0067] Business intelligence data may be used for real-time evaluation of bids and/or products. This real-time evaluation may influence the score and ranking of proposed bids or products. Some examples of data repository (22) include a device or service such as but not limited to a Local Disk, Network Disk including floppy disks, optical disks, CD- ROMs, magnetic-optical disks, read-only memories (ROMs), random access memories (RAMs) electrically programmable read-only memories (EPROMs), electrically erasable and programmable read only memories (EEPROMs), magnetic or optical cards, or any other type of media suitable for storing electronic instructions, and capable of being coupled to a computer system, Data Bases Internet and publicly available data from which various types of tender information may be received.

[0068] Tender input parameters such as bidder submitted data, bidder data collected from other sources, as well as any other bid data, may be weighted and graded. The graded input parameters may be calculated or aggregated (e.g., by adding, averaging or other appropriate calculations) in order to obtain the tender simulation process results. Thus, an aggregated grade may be applied to a bidder and the bidders' bids. In this case an aggregated grade may indicate quality.

[0069] In one embodiment during a tender process, when a bidding participant provides a new bid proposal the simulation process calculates the new aggregated score for that bid by considering the weights defined for each item, bidder quality and properties and item- level bidder quality factor.

[0070] According to some embodiments bidders may submit a proposal for a similar item, where the attributes of the item are entered by the bidder, each attribute being evaluated and graded by the system. The tender administrator facility (20) has the option of appointing bidders that can preempt bidding. The tender administrator facility (20) can select participants that can preempt a winning bid prior to the launch of the tender or during the bidding.

[0071] According to some embodiments the tender administrator facility (20) may set a price that any bidder can accept which immediately ends bidding and declares the buyout claimer as the winner.

[0072] This and other features may be displayed to bidding participants (23) according to preferences set by the tender administrator facility (20).

[0073] The system 200 may include additional modules. According to one embodiment the system 200 includes a module for providing a secure environment, e.g., a module for applying a binding electronic signature and/or a time stamp to tender input parameters. Other modules may provide compensation means for technical medium variants such as connectivity speed and accessibility caused by variances such as server characteristics, latency or location.

[0074] Fig. 3A schematically illustrates a method for bid optimization according to an embodiment of the invention.

[0075] According to one embodiment an automated decision algorithm is performed in order to optimize a tender process. Bid items (30), external data (33) and bid methodology (31) are applied into a simulation algorithm (32). The simulation algorithm (32) runs processes based on the different inputs and compares the simulation results. If the results are optimal (34), the simulation algorithm (32) may generate output (35) which may provide an administrator or other user with process recommendations to assist the user in optimizing the bid results.

[0076] According to embodiments of the invention existing tenders (e.g., previous bid processes and decisions) can be used as templates for the creation of new tenders and new tender characteristics can be determined by the performance of previous tenders.

[0077] Bid items (30) may include goods, services, fund raising or any other appropriate item and/or combination thereof.

[0078] External data (33) typically includes information sources relevant to the simulation process, other than the bid methodology.

[0079] The bid methodology (31) relates to the type of bid methodology (e.g., sealed first-price/silent Methodology, English Methodology, Japanese Methodology, Dutch Methodology, Second Price Methodology, Amount Distribution Methodology, Public Offerings Methodology, Multi Stages Tender Methodology and Double Tender Methodology or any other applicable bidding methodology).

[0080] The simulation algorithm (32) assesses each bid methodology (31a, 31b etc.) by simulating the bid results yielded by applying each bid methodology (31a, 31b, etc) to a relevant item, taking into consideration the external data (33).

[0081] The assessments are then compared to determine the optimal result (34), typically, the optimal bid methodology to be used in certain conditions to obtain the best bid results in those conditions.

[0082] According to embodiments of the invention tender administrative costs may be reduced through the creation of multiple item tenders, where items may be the same, related or not related. Typically, all tender methodologies according to embodiments of the invention may support single and multiple items.

[0083] In a multiple item tender, a weight may be assigned to each item depending on the attributes of the item and a price associated with each item. Items may be bid upon collectively; the placement of the bid being dependent on the item price. During the tender inception the tender administrator (e.g., the tender administrator facility (20)) may assign different weights to each item according to parameters, such as, for example, main items may get a higher weight than optional items, a service item weight may differ from commodity item weight. Weights may influence the final bid results by modifying the bidder overall result.

[0084] According to some embodiments, for example, if multiple item tenders do not meet predefined criteria (for example in a multiple items tender, where none of the bidders can offer a price for all the items), during the bidding process, they may be automatically split into multiple item tenders based on predefined grouping of items.

[0085] A more detailed example of a method according to an embodiment of the invention is schematically illustrated in Fig. 3B.

[0086] For each new tender (50) administrator settings are verified to determine whether an existing bid template may be used (51) or a new one should be generated. If it is decided to use an existing template a base template is selected (52) from a templates repository (53) and a tender inception program (54) is run, which includes steps such as ; receiving tender items and/or bidder declarations, setting an algorithm to support multiple item tenders, receiving methods and operation attributes declarations (which may include accumulated knowledge of bidders, tenders and tender behaviors) and validating the declarations and running a simulator to calculate tender results/recommendations (58). Tender results/recommendations are obtained, after which the tender administrator (e.g., tender administrating function (10)) may manually update the bidding methodology (55) routing the process recursively to the tender inception program (54) or may proceed to set parallel tender dependency parameters (if relevant) (56) and the tender may be published to approved participants (57).

[0087] According to one embodiment, bidder characteristics may be factored in to the final recommendation. Automated algorithms (e.g., simulation algorithm (32)) and manual settings (e.g., bid items (30) and external data (33)) may dynamically detect a bidding participant's characteristics and behavior and based on the detected bidding participant's characteristics and/or behavior, the algorithm may determine an optimal tender strategy.

[0088] For example, as schematically illustrated in Fig. 4, a bidding participant inputs his/her bid (actual bid) (41) and the actual bid is compared to an expected bid or threshold (42). An expected bid, which is typically generated automatically, is usually based on external data, such as information regarding the history of particular bid methodologies. Based on the comparison of the actual bid to the expected bid or to another predetermined threshold, a bidding participant's characteristic is determined (43). The determined bidding participant's characteristic is input to a tender simulation process (e.g., simulating algorithm (32)) (44) and an optimal tender strategy is generated based on the simulation process (45).

[0089] The optimal tender strategy may be determined at the inception phase of a tender or at any phase during the tender process.

[0090] According to one embodiment bidding time settings (e.g., the period allotted for each bidding session, an absolute time of termination of the tender, etc.) may be determined or updated based on the bidder characteristics.

[0091] According to one embodiment, which is schematically illustrated in Fig. 5, bid results are optimized by an interactive process performed between the automated optimization algorithm (system 600) and the tender administration function (administration 606). Tender parameters (60) are applied via the administration function and are validated by the system 600 via a recursive validation algorithm (65). When cleared by the recursive validation algorithms (66) selected simulator parameters are set (62) and forwarded to a tender simulator function. The tender simulator is run (68) and results and recommendations are compiled (69). If the results are accepted (63) (e.g., by an administrator), the process is finalized (a recommendation report is issued (70)). If any rejects occur along the way (the validation failed (66)), a validation and recommendations report is generated (67), errors and recommendations are corrected (61) and/or tender parameters are changed (64), after which the process returns recursively to the phase of applying tender parameters (60) where the process restarts until conclusion.

Claims

1. A method for conducting an electronic tender, the method comprising applying tender input parameters to a tender simulation process; activating the tender simulation process;

obtaining tender simulation process results; and

providing recommendations for an optimal tender methodology based on the tender simulation process results.

2. The method as recited in claim 1 wherein the tender simulation process is an online process.

3. The method as recited in claim 1 comprising applying a plurality of tender methodologies to the tender simulation process; obtaining tender simulation process results;

selecting an optimal result from the tender simulation process results; and providing recommendations for the optimal tender methodology based on the optimal result.

4. The method as recited in claim 1 wherein activating the tender simulation process comprises dynamically detecting bidder characteristics and determining an optimal tender methodology based on the detected bidder characteristics.

5. The method as recited in claim 1 comprising grading the tender input parameters to obtain graded parameters.

6. The method as recited in claim 5 comprising calculating the graded parameters to obtain the tender simulation process results.

7. The method as recited in claim 1 comprising splitting the electronic tender into multiple electronic tenders based on the tender simulation process results.

8. The method as recited in claim 7 comprising splitting the electronic tender based on a predefined grouping of items.

9. The method as recited in claim 1 comprising applying binding electronic signatures and/or a time stamp to the tender input parameters.

10. The method as recited in claim 1 wherein applying tender input parameters comprises applying existing tender templates to generate a new tender.

1 1. The method as recited in claim 10 wherein applying tender input parameters comprises applying existing tender templates to modify the new tender characteristics.

12. The method as recited in claim 1 comprising enabling a tender administrator to change tender parameters in real time..

13. A system for conducting an electronic tender, the system comprising a server to receive tender input parameters and to apply the tender input parameters to a tender simulation process;

a processor to run the tender simulation process and to provide tender simulation recommendations based on the tender simulation process; an input device in communication with the server, the input device to input the tender input parameters; and

an output device in communication with the server, the output device to present the tender simulation recommendations.

14. The system as recited in claim 13 comprising a data repository to store information related to tender input parameters, the data repository in communication with the server.

15. The system as recited in claim 13 wherein the output device comprises a display to present the tender simulation recommendations.

16. The system as recited in claim 15 wherein the output device comprises a graphical user interface, said user interface comprising an indication of bid timing constraints.

17. The system as recited in claim 13 comprising a module for applying a binding electronic signature and/or a time stamp to tender input parameters.