Business Case Studies & Business Publications

Grupo 5 Construction

Zorc, Saša;Pardo, ...

Case

Grupo 5 Construction

Zorc, Saša; Pardo, Jose

QA-0994 | Published July 20, 2026 | 7 Pages Case

Collection: Darden School of Business

Product Details

This case follows Juan E. Pardo, the CEO of Grupo 5 S.A.C (Grupo 5), as he grapples with the company’s strategy for bidding in a public procurement auction to build a new hospital in Peru. Students receive data on Grupo 5’s performance on past projects, along with cost estimates for the project being auctioned. The case is designed to take students who already possess a theoretical grounding in auction theory and immerse them in a realistic business setting, with all of the complexity that entails.

• Apply the logic of auction theory to a realistic procurement setting that does not map cleanly onto either textbook model—private value or common value—but instead combines features of both. • Build students’ ability to manage analytical complexity, distilling a large body of historical project data into a usable cost estimate and a defensible bid, so that students are comfortable with the messy, data-rich situations they will actually encounter and don’t freeze when an exam-style clean dataset is unavailable. • Demonstrate the value of drawing on tools from outside auction theory—notably, regression analysis, Monte Carlo simulation, and the concept of a Nash equilibrium—to structure and solve a practical bidding problem, so that students treat the analytical tool kit as portable across problems rather than locked to the technique in whose chapter the problem appeared. • Surface the winner’s curse as the central hazard of common-value auctions and develop intuition for how a disciplined markup strategy mitigates it, so that students recognize the curse in any sealed-bid environment they enter as managers and have a calibrated reflex for the defensive move that the situation demands.