Impact of Unit Time Value on Contractors' Optimal Bidding Strategies in Price-Time Bi-Parameter Bidding

State Highway Agencies have started to utilize price-time bi-parameter bidding (A+B bidding) in order to accelerate projects by incorporating construction time in the bidding competition. Since this method is based on the principle of cost reimbursement to the contractor for contract time reduction, the owner has to calculate unit time value (UTV) before letting projects. Unlike most studies performed in this area that have focused on optimizing the incentive/disincentive (I/D) rates with respect to road user costs and added construction cost, this study investigates how different UTVs can impact the competitiveness of contractors in A+B bidding. By evaluating the optimal strategies of multiple contractors participating in an A+B bidding competition, new criteria are developed to determine the amount of UTV and I/D. Finally, the paper concludes with some discussions regarding a set of criteria that need to be considered in both A+B with I/D and A+B without I/D contracts. This study shows how the owner would be able to adjust the UTV and I/D rates for A+B bidding projects by estimating the price-time curves of contractors. It would also enable contractors to adopt a more competitive strategy by estimating their competitors' optimal bidding strategies.