Subcontractors' Bidding Decisions
Publication: Journal of Construction Engineering and Management
Volume 124, Issue 2
Abstract
Bid decisions by subcontractors are complex due to the uncertainty about many factors affecting their outcomes. This study was able to identify, through a questionnaire survey, many factors characterizing the bid decision-making process. The questionnaire was mailed in August 1995 to 320 subcontractors in Colorado. The results indicate that the contractor's credit history, habit in the issuance of periodical payments, and leadership and capability in planning and managing the project are identified as the top factors that affect a subcontractor's decision to bid for a project. The subcontractor's previous relationship with the contractor, the contractor's capabilities, financial capacity, current work load, and specialty, and the prospect of future business relationships are the highest ranked factors affecting quotation decision. Suggestions are advanced to subcontractors for improving their bidding decisions.
Get full access to this article
View all available purchase options and get full access to this article.
References
1.
1995 Subcontractors Directory. (1995). Colorado Chapter, American Subcontractors Assoc., Denver, Colo.
2.
Ahmad, I., and Minkarah, I.(1988). “Questionnaire survey on bidding in construction.”J. Mgmt. in Engrg., ASCE, 4(3), 229–243.
3.
Al-Roumi, A. (1994). “Subcontractors bidding practices in Saudi Arabia,” BS thesis, Arch. Engrg. Dept., King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia.
4.
Bell, L. B. (1969). “A system for competitive bidding.”J. Systems Mgmt., 20(March), 26–29.
5.
Benjamin, N. (1969). “Competitive bidding for building construction contracts.”Tech. Rep. No. 106, Dept. of Civ. Engrg., Stanford University, Stanford, Calif.
6.
Benjamin, N., and Meador, R.(1979). “Comparison of Friedman and Gates competitive bidding models.”J. Constr. Div., ASCE, 105(1), 25–40.
7.
Broemser, G. M. (1968). “Competitive bidding in the construction industry,” PhD thesis, Stanford University, Stanford, Calif.
8.
Carr, I.(1982). “General bidding model.”J. Constr. Div., ASCE, 108(4), 639–650.
9.
Carr, I.(1983). “Impact of number of bidders on competition.”J. Constr. Engrg. and Mgmt., ASCE, 109(1), 61–73.
10.
Casey, B., and Shaffer, L. (1964). “An evaluation of some competitive bid strategies for contractors.”Civil Engineering Studies, Construction Research Series No. 4, University of Illinois, Urbana, Ill.
11.
Friedman, L. (1956). “A competitive bidding strategy.”Operations Res., 4(June), 104–112.
12.
Gates, M.(1967). “Bidding strategies and probabilities.”J. Constr. Div., ASCE, 93(1), 75–107.
13.
Gates, M.(1983). “A bidding strategy based on ESPE.”Cost Engrg., 25(6), 27–35.
14.
Hinze, J., and Tracey, A.(1994). “The contractor-subcontractor relationship: the subcontractors' view.”J. Constr. Engrg. and Mgmt., ASCE, 120(2), 274–288.
15.
King, M., and Mercer, A.(1990). “Optimum markup when bidding with uncertain costs.”Eur. J. Operational Res., 47(3), 348–363.
16.
Morin, T., and Clough, R.(1969). “OPBID: competitive bidding strategy model.”J. Constr. Div., ASCE, 95(1), 85–105.
17.
Neufville, R., Hani, E., and Lesage, Y.(1977). “Bidding models: effect of risk aversion.”J. Constr. Div., ASCE, 103(1), 57–70.
18.
Runeson, G., and Uher, T. E. (1984). “Survey of tendering practices in Australian building industry with reference to subcontractors.”Rep. No. 3, Build. Res. Ctr., School of Build., University of New South Wales, Australia.
19.
Shaffer, L. R.(1971). “Competitive strategy models for the construction industry.”Int. J. Comput. Math., 1, 271–272.
20.
Shash, A.(1993). “Factors considered in tendering decisions by top UK contractors.”Constr. Mgmt. and Economics, 11, 111–118.
21.
Shash, A.(1995). “Bidding strategies: an overview.”Cost Engrg. J., 37(2), 19–20.
22.
Shash, A. (1996). “Bidding practices of subcontractors operating in the state of Colorado.”Int. Rep., Constr. Engrg. and Mgmt. Dept., King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia.
23.
Shash, A., and Abdul-Hadi, N.(1992). “Factors affecting a contractor's markup size decision in Saudi Arabia.”Constr. Mgmt. and Economics, 10, 415–429.
24.
Shash, A., and Abdul-Hadi, N.(1993). “The effect of contractor size on mark-up size decision in Saudi Arabia.”Constr. Mgmt. and Economics, 11, 421–429.
25.
Wade, R., and Harris, R.(1976). “LOMARK: a bidding strategy.”J. Constr. Div., ASCE, 102(1), 197–211.
Information & Authors
Information
Published In
Copyright
Copyright © 1998 American Society of Civil Engineers.
History
Published online: Mar 1, 1998
Published in print: Mar 1998
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.