ProbeX, you may have a point in that the mere presence of a person can throw someone off their game, especially someone who is in an adversarial role, examples from real abilities come to mind.
But the very idea of the challenge, as well as the rules, is to find a way to show that something can be done so that no judging is required. Anyone present, as well as any observer of the recordings of the event, can tell what has happened. This is why two tests are done, because if anyone could show in the first one an ability or event that is considered paranormal, they can do it again.
The entire thing seems a sort of catch 22, in that one is attempting to prove something that doesn't exist, or is possible, in the first place. Establishing a protocol for the challenge is probably the most important part, and since it is in writing, there can't be any fight over what was claimed, and what the results were.
Obviously, if a second test was to take place, there would be much attention and publicity concerning it, because someone would have managed to demonstrate something unusual, in a way that can be repeated, and there would be a lot of money at stake.
The bias is eliminated before the testing, or the challenge demonstration, if you will. If there is any bias, that is when it would come into play. I have encouraged others to do this simple exercise, concerning the challenge. Come up with a better way to do it, and present that, before you criticize the existing method.
In other words, how would you determine a way to demonstrate something, that would satisfy all parties? That would be obvious to any observer, that the claim was satisfied? And how would you ensure no bias, on anyones part?
In the FAQs section, there are clear suggestions to demonstrate the ability or event, to skeptical, professional, intelligent people, before you make an application, as well as other good advice.
http://www.randi.org/research/faq.html#4.2
This next step is very important, because it will be the first big hurdle you will face:
Tell your physician and/or psychiatrist that you have a paranormal ability and that you plan on demonstrating your paranormal ability in front of a team of observers, and consider heeding his/her advice.
The reason that this is a big hurdle is this: you should trust your physician/psychiatrist; they're on your side, after all. If you cannot convince them that applying for the Challenge is a good idea, you won't stand a chance against people you don't trust and who are not on your side.
After you are sure you are healthy and you have told your doctors about your intentions, make sure you can actually do the thing you will be claiming you can do in the application. If you know your ability is based on a trick or deception, stop right here and don't apply. Don't lie to yourself.
If you are sure you are not lying to yourself, find someone you know who is a reasonable, scientific sort and talk to him about your ability. Ask him to be as unfriendly and skeptical as possible. Then, demonstrate your proposed claim to him. This is the second big hurdle. If you can convince a brutally honest friend that you can do something paranormal, then keep going. Otherwise, stop; you will have no chance convincing the JREF's investigators.
Make sure you can reliably perform this ability within your claimed limits. Make sure that standard things you would expect in the challenge, such as the presence of skeptics, or a physical object near or between you and the thing you want to affect, don't affect your ability. If you can't read someone's mind when there's a skeptic nearby, or you can't see through a blindfold when there's a piece of cardboard between you and the object you are supposed to be able to see, then don't apply. These are just the sorts of things you will be subjected to during the test.
See? Important issues are stated clearly right there. Including the issue of having your ability modified by the presence of others.
If you can't read someone's mind when there's a skeptic nearby, or you can't see through a blindfold when there's a piece of cardboard between you and the object you are supposed to be able to see, then don't apply.
See? It is an adversarial situation, that is made clear up front. If something can't be done in the presence of skeptical people, then such an ability will not qualify for the challenge.
It is just part of the game.
Doesn't the fact that claimants aren't allowed to collaborate on the choice of judges, experts and intermediaries, etc., create too much potential for bias behavior and unchecked duplicity from Randi's organization and/or his appointed experts?
These points have been brought up before. The very method of creating a protocol may have bias, but not the actual testing, or attempts to win. In fact, the establishing of a protocol is probably the most time consuming and difficult part of the entire MDC. Yes, you have to play by Randi's rules, and that is not in question. So it may be that getting a mutually agreed upon protocol that will satisfy the MDC rules, and both parties, is a big part of the MDC.
Many things that may exhibit unknown or not currently understood properties might qualify, but the cost of setting up a test protocol for them, would far exceed the prize money. And, as has been pointed out many times, if you really do have some extra-human ability, you may make more money keeping it quiet, than trying to win the million.
The MDC is a tool for many things, but exposing obvious frauds is the first and foremost. That is how it started. Put up, or shut up. You say you can do it, lets work out how that can be shown, so that it is obvious you can.
Nobody has so far. And remember, there are other challenges as well. Winning one may mean you win them all.