Development of a Construction Project Bidding Decision-Making Tool
Publication: Practice Periodical on Structural Design and Construction
Volume 25, Issue 1
Abstract
Given the increasingly competitive environment in the construction industry, investigating the bidding strategies and the influential factors on bidding decisions has become a topic of research since the mid-1950s. To date, numerous decision-making tools have been developed to assist contractors in making bid/no-bid decisions. Despite the excessive availability of the decision-making tools, their utilization rate is very low. Therefore, a practical and user-centered tool to help with the bid/no-bid decisions is needed. The purpose of this study is to develop a practical decision-making tool to assist decision makers in making construction project bidding decisions and selecting the most appropriate projects to bid on using the analytic hierarchy process (AHP). Two illustrative examples, based on hypothetical case studies, are also provided to describe the implementation process of the developed decision-making tool.
Get full access to this article
View all available purchase options and get full access to this article.
Data Availability Statement
All data (responses from Employee X and Employee Y) and the Microsoft Excel-based decision-making model are available from the corresponding author by request.
References
Ahmad, I. 1990. “Decision-support system for modeling bid no-bid decision problem.” J. Constr. Eng. Manage. 116 (4): 595–608. https://doi.org/10.1061/(ASCE)0733-9364(1990)116:4(595).
Ahmad, I., and I. Minkarah. 1988. “Questionnaire survey on bidding in construction.” J. Manage. Eng. 4 (3): 229–243. https://doi.org/10.1061/(ASCE)9742-597X(1988)4:3(229).
Akalp, D., and M. E. Ozbek. 2016. “Differences in construction companies’ preferences in making bid/no bid decisions.” In Proc., EURO MED SEC 1 Conf.: Interaction between Theory and Practice in Civil Engineering and Construction, 343–348. Fargo, ND: ISEC Press.
Akalp, D., and M. E. Ozbek. 2017. “Identifying the weights assigned to the key bidding factors by different groups of construction companies.” In Proc., 53rd Annual Int. Conf. on Associated Schools of Construction, 577–584. Fort Collins, CO: ASC.
Bageis, A. S., and C. Fortune. 2009. “Factors affecting the bid/no bid decision in the Saudi Arabian construction contractors.” Constr. Manage. Econ. 27 (1): 53–71. https://doi.org/10.1080/01446190802596220.
Burke, R. 1999. Project management: Planning and control techniques. Chichester, UK: Wiley.
Chen, Y. Q., S. J. Zhang, L. S. Liu, and J. Hu. 2015. “Risk perception and propensity in bid/no-bid decision-making of construction projects.” Eng. Constr. Archit. Manage. 22 (1): 2–20. https://doi.org/10.1108/ECAM-01-2013-0011.
Chisala, M. L. 2017. “Quantitative bid or no-bid decision-support model for contractors.” J. Constr. Eng. Manage. 143 (12): 04017088. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001407.
Chua, D. K. H., D. Z. Li, and W. T. Chan. 2001. “Case-based reasoning approach in bid decision making.” J. Constr. Eng. Manage. 127 (1): 35–45. https://doi.org/10.1061/(ASCE)0733-9364(2001)127:1(35).
Deng, P.-S. 1994. “Using case-based reasoning for decision support.” In Proc., 27th Hawaii Int. Conf. on System Sciences, 552–561. Piscataway, NJ: IEEE.
Egemen, M., and A. Mohamed. 2008. “SCBMD: A knowledge-based system software for strategically correct bid/no bid and mark-up size decisions.” Autom. Constr. 17 (7): 864–872. https://doi.org/10.1016/j.autcon.2008.02.013.
Egemen, M., and A. N. Mohamed. 2007. “A framework for contractors to reach strategically correct bid/no bid and mark-up size decisions.” Build. Environ. 42 (3): 1373–1385. https://doi.org/10.1016/j.buildenv.2005.11.016.
El-Mashaleh, M. S. 2010. “Decision to bid or not to bid: A data envelopment analysis approach.” Can. J. Civ. Eng. 37 (1): 37–44. https://doi.org/10.1139/L09-119.
Friedman, L. 1956. “A competitive-bidding strategy.” Oper. Res. 4 (1): 104–112. https://doi.org/10.1287/opre.4.1.104.
Gates, M. 1983. “A bidding strategy based on ESPE.” Cost Eng. 25 (6): 27–35.
Harris, F., R. McCaffer, and F. Edum-Fotwe. 2006. Modern construction management. Chichester, UK: Wiley.
Jarkas, A. M., S. A. Mubarak, and C. Y. Kadri. 2014. “Critical factors determining bid/no bid decisions of contractors in Qatar.” J. Manage. Eng. 30 (4): 05014007. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000223.
Kerzner, H. 2009. Project management a systems approach to planning, scheduling, and controlling. 10th ed. Hoboken, NJ: Wiley.
King, M., and A. Mercer. 1987. “Differences in bidding strategies.” Eur. J. Oper. Res. 28 (1): 22–26. https://doi.org/10.1016/0377-2217(87)90166-4.
Leśniak, A., and E. Plebankiewicz. 2015. “Modeling the decision-making process concerning participation in construction bidding.” J. Manage. Eng. 31 (2): 04014032. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000237.
Leśniak, A., and A. Radziejowska. 2017. “Supporting bidding decision using multi-criteria analysis methods.” Procedia Eng. 208: 76–81. https://doi.org/10.1016/j.proeng.2017.11.023.
Lewis, H. 2003. Bids, tenders and proposals. London: Kogan Page.
Mohanty, R. 1992. “Project selection by a multiple-criteria decision-making method: An example from a developing country.” Int. J. Project Manage. 10 (1): 31–38. https://doi.org/10.1016/0263-7863(92)90070-P.
Mu, E. 2017. Practical decision making: An introduction to the analytic hierarchy process (AHP) using super decisions V2. Cham, Switzerland: Springer.
Oo, B. L., D. S. Drew, and H. P. Lo. 2007. “Applying a random coefficients logistic model to contractors’ decision to bid.” Constr. Manage. Econ. 25 (4): 387–398. https://doi.org/10.1080/01446190600922552.
Park, W. R., and W. B. Chapin. 1992. Construction bidding: Strategic pricing for profit. 2nd ed. New York: Wiley.
Saaty, R. W. 1987. “The analytic hierarchy process—What it is and how it is used.” Math. Modell. 9 (3–5): 161–176. https://doi.org/10.1016/0270-0255(87)90473-8.
Saaty, T. L. 1980. The analytical hierarchical process: Planning, priority setting, resource allocation. New York: Mc Graw-Hill.
Saaty, T. L. 1991. Prediction, projection, and forecasting: Applications of the analytic hierarchy process in economics, finance, politics, games, and sports. Boston: Kluwer Academic.
Saaty, T. L. 2001. Models, methods, concepts & applications of the analytic hierarchy process. Boston: Kluwer Academic.
Shash, A. A. 1993. “Factors considered in tendering decisions by top UK contractors.” Constr. Manage. Econ. 11 (2): 111–118. https://doi.org/10.1080/01446199300000004.
Triantaphyllou, E., and S. H. Mann. 1995. “Using the analytic hierarchy process for decision making in engineering applications: Some challenges.” Int. J. Ind. Eng. Appl. Pract. 2 (1): 35–44.
Wanous, M., H. A. Boussabaine, and J. Lewis. 2003. “A neural network bid/no bid model: The case for contractors in Syria.” Constr. Manage. Econ. 21 (7): 737–744. https://doi.org/10.1080/0144619032000093323.
Whittaker, J. 1981. “Implementing a bidding model.” J. Oper. Res. Soc. 32 (1): 11–17. https://doi.org/10.1057/jors.1981.3.
Information & Authors
Information
Published In
Practice Periodical on Structural Design and Construction
Volume 25 • Issue 1 • February 2020
Copyright
©2019 American Society of Civil Engineers.
History
Received: May 29, 2019
Accepted: Jul 29, 2019
Published online: Sep 26, 2019
Published in print: Feb 1, 2020
Discussion open until: Feb 26, 2020
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.