Behavioral Differences Towards Internal and External Factors in Making the Bid/No Bid Decision

Abstract

Decision-making and subjective evaluation are two important aspects that characterizes the involvement of an organization in tender process. Moreover, selection of the right project to bid for is a principal feature of business success. The study aims to investigate the behavioral differences of Saudi construction contractors toward internal and external factors based on the process of modelling the bidding decisions. A quantitative research design is used to investigate the behavioral differences of 97 contractors recruited from construction industry of Saudi Arabia. A questionnaire was distributed among the respondents that would help in identifying the significant level of factors affecting the bid or no bid decision. The impact of internal and external factors on the bidding decisions was evaluated using one-way ANOVA analysis. The results have shown a significant and positive effect of internal and external factors on the bid or no bid decision; including job start time, work capital requirement, availability of qualified human resources, bidding methods, bidding document price, project supervision procedure and etc. The study has helped in establishing a better understanding toward the behavioral differences of contractors with respect to the bidding decisions.

Extrinsic factors influencing the bid/no-bid decision of construction contracting firms: Impact of firm size and experience

“…Mature firms have lots of experience and they had built a significant reputation in the industry. Every mature firm competes for mega projects to acquire a large profit and for developing a long-term relationship with the government but numerous mature firms experience "government pressure during bidding' because a mega project is awarded to the firm with a strong relationship with the present government (Bageis et al, 2019;Bageis & Fortune, 2009). Nonetheless, numerous mature firms are discouraged from bidding due to fear of rejection.…”

“…Nirab (2007) while working on the study in the Gaza Strip identified the market related factors as being pivotal in the bidding techniques. Bageis et al (2019) concluded market value as one of the important factors affecting the bidding decisions of CCFs in Saudi Arabia. Dulaimi and Shan (2002) found availability of other projects as critical in the bid mark-up decisions of CCFs in Singapore.…”

“…Scholars identified in their studies that the CCFs work consist of general environment factors such as politics and laws as well as competition factors such as finance, labor, suppliers, contractors and clients (Bageis et al, 2019;Newcombe et al, 1990). Similarly, Akintoye & Skitmore (1990) stated that because of use of competitive bidding to award contracts, a CCF's survival strongly depends on its ability to work with different bidding situations.…”

“…Chua and Li (2000) concluded that delay or shortage on payment habit of client can deeply influence the bidding decisions of CCFs. Bageis et al (2019) expanded their research upon the client characteristics in terms of the bidding choice and found out that the client's attitude played significant role in the CCF's decision to bid. Client's experience, transparency and reputation are studied by various other researchers (Straub &Van Mossel, 2007) and are identified as factors of prime importance in construction.…”

“…Odusote & Fellows (1992) emphasized upon the location of the project as significant in bidding decisions. The availability of skilled labor in the region is seen as an imperial factor in bidding decisions of CCFs (Bageis et al, 2019). Dulaimi & Shan (2002) identified the availability of equipment and other projects in the region as important factors in the Singaporean CCFs during their bidding decisions.…”