An integrated fuzzy approach to bidder selection in public procurement: Serbian government case study

Abstract

Public procurement is one of the most significant activities within the sphere of public administration, whose primary purpose is to achieve maximized cost effectiveness and efficiency for the expenditure of public money. This principle is also known as the principle of "value for money" - meaning to achieve the best possible ratio between the amount paid and the value received. The selection of a suitable bidder within the public procurement procedure assists in our achievement of the aforementioned purpose. In this paper an integrated approach based on the fuzzy Technique for Order Preference by Similarity to Ideal Solution (fuzzy TOPSIS) method and the fuzzy Extent Analysis Method is proposed for utilization within the evaluation and bidder selection processes associated with the process of public procurement. The proposed method objectively allows for the evaluation of bidders without the setting of weights by public procurement committees and in so doing helps to avoid subjectivity in respect to the setting of weights for criteria and or sub-criteria. In order to demonstrate the effectiveness and feasibility of the proposed method and its application in public procurement, a real-life case scenario from the Government of Serbia will be presented in this paper.