Bid/no-bid decision factors for Chinese international contractors in international construction projects

Abstract

Purpose Factors affecting bid/no-bid decisions of international projects are more complex than those of domestic projects. The purpose of this paper is to identify and rank decision factors considered by variously sized Chinese international contractors (CICs) and categorize those groups of factors important to experienced practitioners. Design/methodology/approach The analysis of factors identified by a literature review is conducted based on data derived from questionnaire results received from 119 CIC project and bidding managers. The relative importance of factors is measured by mean value and standard deviation. The discrepancy in rank and importance value perceived by variously sized CICs are explored by ranking disparity analysis, non-parametric test and Spearman’s rank correlation coefficient test. Finally, factor analysis is used to categorize the underlying groups of factors considered by CICs. Findings In sum, 41 factors are identified through the literature review as having an impact on the bid decision. Significant disparities in ranking and importance are found in several factors, which partially affect the consistency of the ranking of factors perceived between large and small-medium CICs. Ultimately, nine major factors are identified as impacting the bidding decision, with “contractor’s capability” and “country risk of the host country,” being the most important. Research limitations/implications The weight of a factor considered in a decision varies across contractors as a function of contractor size. Whether using models or subjective judgment in making decisions, it is beneficial to fully understand the main groups of factors influencing the decision. Vulnerability to country risk emerges as the first criterion accessed in the bid decision. Originality/value A comprehensive set of factors is established for CICs, including both general factors common to domestic projects, and international factors unique to international projects. All factors are grouped by inferential analysis from the perspective of contractors, which reveals the underlying mechanism of the bid decision-making process. While the data were collected from CICs, the methodology in exploring factors, along with implications, is determined to be applicable internationally.

Classification model for bid/no‐bid decision in construction projects

“…Additionally, before deciding to bid for a project, the contractor must observe if it has the minimum requirements (money, personnel, and materials) to complete the job. In this way, the company resource factor is critical to the decision as several authors have cited (Jarkas et al., 2014; Li et al., 2020; Oke et al., 2020). Generally, most authors consider various aspects of the pre‐contract process.…”

Efficient Deep Learning for Reforming Authentic Content Searching on Big Data

“…The most consistent analysis of any search engine brings the fear that they create reality instead of reflecting it. We explained below why a confined set of features are still efficient to provide high accuracy, and why a comprehensive set of features will be useful for a practical application [11]. For instance, it is possible that features like user backlink mined from search engine logs might be used by a search engine as one of the dignified features.…”

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

“…they can negotiate with the client or participate in competitive bidding to win the project (Maqsoom et al, 2018;Shash, 1993). Scholars argue that construction firms need to make a critical decision of participating in the bid or not, once an invitation is received (El-Mashaleh, 2013;Ma, 2011;Li et al, 2020). Wanous et al (2003) found that winning the bid is extremely challenging especially in today's competitive construction markets.…”

“…Bidding for unsubstantial projects can result in huge losses that include the consumption of resources as well as time that might have been invested in more profitable projects, ultimately resulting in financial failure of the firm (Egemen & Mohamed, 2005). Surveys by previous scholars have identified some of the important factors in the bid/no-bid decision making (Li et al, 2020;Shokri-Ghasabeh & Chileshe, 2016) but little consensus is found on optimal or specific approach regarding the decision to bid. Enshassi et al (2010) observed that the tendency to bid increases with the size of firm, however, another found the opposite that propensity to bid and win a project decreases with the growth in company size (Krasnokutskaya & Seim, 2011).…”

“…Nonetheless, wide-ranging thoughts are evident from literature with little consensus on specific factors influencing the bid/no-bid decision for construction projects. It is difficult to fully understand bid/no-bid decision for construction projects, for example, the existence of an association between extrinsic factors vis-à-vis CCF size and experience (Bageis & Fortune, 2009;Chua & Li, 2000;Li et al, 2020). A firm generally arrives at a bid decision only after a complex reasoning process that is influenced greatly by the firm size and its previous experience (Chua & Li, 2000;Ma, 2011).…”