Quantitative Methods for a New Configuration of Territorial Units in a Chilean Government Agency Tender Process

The Junta Nacional de Auxilio Escolar y Becas (JUNAEB) is an agency of the Chilean government with responsibility for promoting the integration and retention of socially vulnerable children in the country's school system. Its services include a school meals program under which private firms bid on supply contracts for territorial units within Chile. Before 2007, these units were defined manually and their attractiveness to potential suppliers varied. This led to a series of problems for the government, both in the contract tender process and the service provided. In this paper, we apply operations research methodologies to determine new configurations of the territorial units to ensure that their attractiveness is similar and that schools in each region of the country receive meal service of similar, good quality. This homogenization of the units' attractiveness helps reduce the uncertainty and bankruptcy risk that suppliers face, thus benefitting the entire system. Since 2007, JUNAEB has used the configurations we proposed.