Basic Principles of Evaluating Bidding Methods for Highway Construction Projects in China

In this paper, various bidding methods including Open, Invitational, and Negotiated bidding were comparatively evaluated based on the associated construction costs, transaction costs, bid price, and service quality. Although open bidding was found to be beneficial in terms of reducing construction costs, it is associated with high transaction costs that can be minimized through internet usage Invitational bidding should be based on a pre-qualification criterion while negotiated bidding should be applied where market conditions are assumed to be competitively perfect. The results also indicated that the bid appraising method based on the lowest evaluated bid price and high quality service must be used in construction and technical projects, respectively. In general, the study results showed that the current Chinese bidding laws and regulations for construction projects need to be improved.