Big public infrastructure projects used to be synonymous with corruption, including bid rigging. Super-smart professors Jim McClave and Tom Rothrock figured out a way to detect bidding irregularities and catch cheaters. As a kid, Jim loved solving puzzles and did well at school, but suffered from bad “comportment” according to his teachers. Tom, a farm boy from Missouri, went to a one-room schoolhouse in a town of 100. “Not a lot of education took place” so he struggled in school, but “math came easy” to him. In 1977, Jim and Tom formed a business called InfoTech and have been collaborating ever since. This episode was originally released on February 13, 2019.
TRANSCRIPT:
Intro: 0:01
Inventors and their inventions. Welcome to Radio Cade the podcast from the Cade Museum for Creativity and Invention in Gainesville, Florida. The museum is named after James Robert Cade , who invented Gatorade in 1965. My name is Richard Miles. We'll introduce you to inventors and the things that motivate them, we'll learn about their personal stories, how their inventions work and how their ideas get from the laboratory to the marketplace.
Richard Miles: 0:38
It's all rigged. Or is it? Specifically, how does one go about detecting bid rigging? Here to help us understand, are Jim McClave and Tom Rothrock, the inventors and developers of computerized tools to see who is cheating and who is not. Welcome to the show, Jim and Tom.
Jim McClave: 0:54
Thank you.
Tom Rothrock: 0:55
Thank you.
Richard Miles: 0:55
So let's start out, Jim, I'm going to ask you what , uh, what exactly is the technology , uh, that you have developed and are using, explain it to me who really doesn't know that much. I took one college statistics class, so I kind of know , uh , but not really. So to assume that our listeners don't have a deep background in statistics.
Jim McClave: 1:16
Fair enough. Um, our invention consists of , uh, software computerized techniques, statistical techniques that looks for patterns or trends to suggest that companies may not be playing fairly, that they may be rigging bids when they submit prices to government agencies to do work for them. So it's, it's basically software that makes the difference, shows a difference between competition and lack of competition.
Richard Miles: 1:46
So typically, if a government agency or public entity puts out a project to bid, they're going to get all these bid documents. And so the , the concept here is that all those bid documents get fed into a program. And then the program looks for anomalies or, you know, is there, is there a parameter range for each one of those numbers? And that's how it essentially works. Is it more sophisticated?
Jim McClave: 2:10
It's a little more sophisticated in that . If you're going to look for trends, you really need historical data. -Okay. So rather than just looking at today's bids, we're looking at maybe five or even 10 years worth of bids. And again , um , I try as hard as they might, if companies are cheating, it doesn't look like competition. So there are patterns that show up, sometimes they're trying to hide it, but -I see, we figured out ways that that look , uh, around the corners and into the nooks and crannies and find , uh , these patterns that suggest bid rigging.
Richard Miles: 2:43
Um , so I saw a great phrase, I think one of your