Start-up and steady-state learning in recurrent bidding

Is contractors' bidding competitiveness under the governance of the adaptive learning mode? The adaptive learning model suggests contractor organizations would regulate the use of a bidding strategy, which is deemed optimal in response to recurring and similar bidding situations. A data set on open tendering by a select group of contractors was gathered over six years by the Hong Kong government and used to test this premise. The behaviour of the eight newly listed contractors indicates that an upward trend of bidding competitiveness in initial bidding attempts is not a generic phenomenon. The theoretical construct of bidding behaviour in the start-up phase is therefore dubious. Data lend only partial support to the existence of rapid learning during the start-up phase. However, the five more experienced contractors (indicated by the largest number of bidding attempts) show high and consistent bidding competitiveness. This provides evidence that contractors display behavioural regularity when the optimal bidding strategy has been reached. Construction organizations are, therefore, urged to treat organizational learning strategically in their attempts to maintain high competitiveness in the bidding process.     

The effect of experience on contractors' competitiveness in recurrent bidding

This paper considers the relationship between bidding competitiveness, organizational learning and experience and it measures the effect of contractors' bidding experience on competitiveness in recurrent bidding, a notion that conceptualizes a continuous decision-making process in which experiential learning plays a key role. The data analysis demonstrates that contractors who bid more frequently over a six-year period are more competitive than contractors who bid occasionally. It is found that greater bidding competitiveness is positively correlated with the frequency of bidding attempts. An analysis of contractors' bidding performance on a pairwise basis supports this finding. Not only does the pairwise analysis show that the bidding competitiveness of experienced contractors who bid frequently is greater, but also that experienced contractors' bidding attempts fall within a relatively small competitiveness range when compared with that of contractors who only bid occasionally. A key finding of this paper is the existence of some experienced contractors, who may be perceived as being ‘experienced market players’, having the attribute of a more competitive and consistent bidding performance. This research should be useful to procurers looking to prequalify contractors on the basis of experience and to contractors in analysing their bidding performance and/or their competitors' bidding performance.     

Learning approaches for housing,service and infrastructure project organizations

Capturing and sharing experiences that may be applicable in several projects is generally recognized as a way of enhancing the performance of construction projects. Several studies have reported difficulties in applying learning approaches that could be applicable for a wide range of projects. The learning behaviour in three types of construction project: housing, service and infrastructure, is examined by the means of a questionnaire study including 51 construction projects and more than 800 responses from clients, designers, contractors’ managers, contractors’ workers and subcontractors. The effects of leadership, openness and influence are considered. Based on a factor analysis, three approaches to learning were identified: organizing for learning, experimenting and networking. While housing project organizations do not demonstrate any specific preferences, service project organizations show a focus on networking and infrastructure project organizations show the highest interest in experimenting. On the basis of these results it can be concluded that learning approaches are dependent on the type of project. Thus adopting different learning approaches for different types of construction project seems to be a more relevant strategy than implementing a ‘one size fits all’ learning approach for all construction project organizations.     

Referees for Volume 25 (2007)

Bidding strategies vary from contractor to contractor, each of which will have different degrees of sensitivity towards the factors affecting their bidding decisions. A competitor analysis using a linear mixed model is proposed for use by contractors as part of a more informed approach in identifying key competitors, and as a basis for formulating bidding strategies. The competitiveness between bids is examined according to: (i) project size, (ii) work sector; (iii) work nature; and (iv) number of bidders. The model was tested empirically by application to a bidding dataset obtained from a large Hong Kong contractor. Allowing for different degrees of sensitivity towards the four bidding variables across competing contractors (i.e. with the model parameters that varied across competing contractors), the results indicate that competitiveness in bidding of this contractor is generally greater than the majority of its competitors.     

The effect of client and type and size of construction work on a contractor’s bidding strategy

This paper offers a bidding strategy model for use by contractors as part of a more informed approach in selecting which contracts to bid for, and as a basis for determining the most appropriate mark-up level for various types and sizes of construction work and client types. Regression analysis is used in measuring a contractor’s competitiveness between bids (by using the lowest bid/own bid ratio) and within bids (by using the lowest bid/cost estimate ratio) according to type and size of construction work and client type. The model was tested on a large and reputable Hong Kong contractor. This particular contractor’s bidding behaviour was found to be largely unaffected by the type of construction work, but significantly affected by the client type and the size of the construction work. Three quadratic models (regressing lowest bid/cost estimate on the size of the construction work) are also successfully developed for projects from the private sector, the Hong Kong Government and the Hong Kong Housing Authority, respectively.     

建筑工程投标决策及投标报价策略的探讨

建筑工程投标是业主自由选取承包商的一种方法,并且业主也是根据投标报价这一标准来选择中标者。因此,工程投标决策和投标报价策略是尤为重要的。本文现就建筑工程投标决策及投标报价策略进行了简单地探讨。     

Impact of considering need for work and risk on performance of construction contractors: An agent-based approach

Competitive bidding is the main mechanism of allocating projects in the construction market. In the traditional single criterion bidding method, the markup decision has a significant impact on a contractor's business success. Contractors usually take into consideration several factors in the process of determining their markup. This study has reviewed the literature and identified a range of contractors' behaviors when making their markup decision within a competitive bidding environment. An additive markup function consisting of three components, namely competition, risk, and need for work, was developed in order to replicate markup behaviors of contractors. Then, agent-based modeling has been employed for simulating the bidding process within a market formed of a set of heterogeneous contractors with different risk attitudes and defined markup behaviors. This model was used to study the impact of considering need for work and risk allowance in markup determination on financial performance of contractors in various market scenarios. Results suggest that the optimal policy is moderation in both dimensions of risk attitude and need for work.     

A framework for contractors to reach strategically correct bid/no bid and mark-up size decisions

In an effort to uncover the main factors that characterize the two distinct but sequential stages of bidding decisions, namely bid/no bid and mark-up size decisions, this study identifies the key determining factors and their importance weights by presenting survey findings of 80 contracting organizations from Northern Cyprus and Turkish construction markets regarding this issue. The framework presented in this study will serve as a basis for a knowledge-based system model which will guide the contracting organizations in reaching ‘strategically correct’ bid/no bid and mark-up size decisions. The proposed framework used a reasoning model, which went deeply into the heart of the decision-making process and helped to clarify the complex picture regarding the two sequential decisions. The results revealed that there is a distinct and significant difference in the importance assigned to the same key factors for the two separate decision processes. Furthermore, the study confirmed the fact that the factors related to ‘strategic considerations’ have a significant role in both of these decision processes. One of the most striking findings of this research was the distinct difference in approach of varying sizes of contractors to the overall issue. Hence, these results suggest that any model regarding bidding and mark-up size decisions should definitely differentiate among different sizes of contractors to reflect the approaches of the related contractors in a better manner. Furthermore, it was interesting to find out that the correlation between different sizes of contractors’ approaches was higher in the mark-up decision process compared to the bidding decision process. In spite of the fact that this study was based on input provided by certain types of contractors in Northern Cyprus and Turkish construction markets only, we believe that the overall approach, reasoning and findings of the proposed framework are of good value to contracting organizations in different construction markets throughout the world as well.     

浅谈FIDIC合同条件下的海外项目投标

在海外项目投标过程中,要熟悉FIDIC合同条款,明确参与海外项目承包竞争的投标目的,认真分析研究业主的招标文件及项目现场情况,为海外项目的投标做好充分的准备工作并确定投标策略。本文简要分析了海外项目承包中的风险。     

南京市建设工程承包商投标行为实证研究

为验证南京市建筑市场中承包商是否存在投标行为非理性现象,通过对承包商投标存在问题的综述,采用实证方法对承包商的投标行为、投标竞争情况进行研究.选取南京市施工承包商中最具有代表性的20家作为研究对象,运用SPSS V15.0对其投标数据进行分析,得出这20家承包商投标行为之间存在较好的一致性,并根据投标竞争力对这20家承包商重新排名.     

基于SD的承包商围标等危害分析及对策

为了加强建筑施工企业自身综合素质建设,提高企业竞争力,促进施工企业的良性发展和维护建筑市场秩序,文章针对目前承包商在招投标过程中的围标、陪标等违规、违法行为,引入系统动力学理论对施工企业自身发展的危害进行分析。承包商的这些做法在扰乱建筑市场秩序、损害业主利益的同时,也导致了自身企业的综合竞争力下降,信誉降低。并提出了细化招标过程、监控相关人员、鉴别标书是否涉嫌违规,以及监管相关单位的不法利益往来等对策和建议,来避免承包商的违规行为。     

招投标竞争机制下如何做好工程施工投标工作

分析了建筑施工企业投标工作的重要性,就招投标竞争机制下如何做好工程施工投标工作进行了探讨,从建立投标组织、投标决策、编制投标文件等方面进行了论述,以帮助施工企业做好投标工作,提高施工企业的中标率。     

公路工程投标策略分析

结合实践经验,从标前准备、编制标书、投标报价、标书的排版包装及投标报价策略等方面进行了探讨,重点提出了公路工程投标报价策略,以提高工程施工企业的投标报价水平,从而增强施工企业的竞争力.     

谈高校基建招标造价控制

结合高校基建工程的特点,从建设单位角度,剖析招标阶段的造价控制问题,结合工作实践,探讨了高校基建招标文件中的造价控制要点,指出应加强设计阶段图纸的审查和清单编制的准确性,并制定合理的评标方法。     

Risk‐minimizing approach to bid‐cutting limit determination

Intense price competition is quite common in the construction industry. In many markets, contractors have to cut their bids to compete, giving priority to winning enough contracts to sustain normal operation, and it is common to see a winning bid close to the expected project cost. While cutting bids not only gives up profits but also undoubtedly increases the risk of making a loss, the behaviour of contractors in intense competition is difficult to explain by existing academic bidding models. An approach to determining the lower limit of the bid for a project is proposed based on minimization of the overall loss risk defined by a probabilistic model. The approach can be used to prevent arbitrary over‐cuts in final bid decision where price competition is intense. Factors influencing the suggested bid‐cutting limit for a project are analysed. An illustrative example using real case data is provided.     

市政公用工程招标阶段造价控制要点分析

招标阶段是选择工程施工与安装承包商的关键阶段,其招标文件确定了工程合同的核心条款,确定了工程施工阶段工程造价管理的基本框架和制度流程,对工程实施造价控制有关键性影响。本文通过对招标阶段影响工程造价的主要因素进行分析,从而提出在招标阶段造价控制的主要措施。     

承包方信任度对投标报价的影响研究

从承包商的视角构建了以承包方信任为自变量、投标报价为因变量、承包商的公平感知为调节变量的理论模型。通过对 173 份承包商的有效问卷进行实证分析,得出结论:善意信任、能力信任与风险费报价和管理费报价均负相关,且承包商的公平感知可以加强善意信任、能力信任与风险费报价之间的负相关关系。不仅丰富了投标报价领域和招投标阶段有关信任方面的研究,而且可以指导承包商的投标工作,促进业主和承包商在以后的项目建设过程中更加注重己方的诚信建设。     

合理划分工程费用,促进建筑市场的发育与完善

建筑市场的影响因素众多 ,从建筑工程造价构成及费用计算的角度 ,提出了规范建筑市场、完善招标投标办法 ,要从建筑工程造价构成入手 ,将施工图纸以外的如施工费等部分划归由企业自主报价 ,使企业有更大的竞争空间 .借鉴香港投标报价费用的组成 ,说明将工程造价的费用组成合理划分 ,有利于招标投标制度的完善 ,有利于建筑市场走向成熟     

Pricing strategy in the US construction industry

This paper presents several issues related to pricing in construction. First, problems with current pricing strategy in construction are explored. Second, pricing strategies based on a market-based approach are proposed. Third, survey findings of the top 400 US contractors are presented regarding their current pricing practices and the applicability of the proposed pricing strategies. In conclusion, the belief that current pricing strategy in construction is predominantly cost-based is confirmed by the survey findings; indeed, in setting the markup, most contractors rely on their intuition after subjectively assessing the competition. The three internal pricing variables that have the largest statistically significant contingency coefficients with pricing strategy are ‘marketing intelligence capabilities’, ‘annual contract value’, and ‘the type of client in most projects’. ‘Owner's characteristics’, ‘competitors'characteristics’, and ‘market demand’ are statistically significant external variables in making pricing strategy decisions. A change of bidding procedure is proposed so that all parties in construction can maximize the benefits of market-based pricing strategies.     

浅谈在合理低价中标下高速公路投标策略

首先分析了高速公路招标的目的、现状和评标方法,再结合江西省的评标办法阐述了合理低价法的计算公式以及相关的说明,然后进行了投标策略探讨,最后通过合理低价的计算对承包商的投标价格区间提出参考范围。