A buyer seeking to outsource production may be able to find ways to reduce a potential supplier's cost, e.g., by suggesting improvements to the supplier's proposed production methods. We study how a buyer could use such "cost reduction investigations" by proposing a three-step supplier selection...

We consider sealed and open-bid total-cost procurement auctions where two attributes are used for contract award decisions: price, which is bid by the supplier; and a fixed quality adjustment cost, which is included by the buyer to capture non-price factors such as a supplier's quality and...