The Cause of Collusion in the IT and Construction Industries

Authors: Isaac Kashiwagi (M.S.), Susan van Hes, Guo Cheng Tschi and Dean Kashiwagi (PhD, P.E.)


In 2002, the Dutch construction industry encountered a problem with collusion. They had a very difficult time understanding the solution to the problem. The visionary Dutch government officials approached the Performance Based Studies Research Group (PBSRG) at Arizona State University to solve the problem. PBSRG introduced the Construction Industry Structure (CIS) and explained that collusion environment is created by the client and not the contractors. Meeting resistance from Dutch researchers, PBSRG created a new research approach upon which the Dutch BV effort flourished. Instead of consensus, PBSRG used simplistic logic, identified visionaries who could understand, and ran tests without years of theoretical discussion. The simplicity of the explanations and the results of repeated testing identified that the problem of collusion was non-technical. It was a problem with the delivery of services. The same problem came up in the ICT industry. PBSRG took the same approach to resolve the problem. Find Dutch visionary partners, educate them, run tests, and document the test and minimization of problems.

Keywords: IT industry, performance, supply chain issues, large organization, Best Value