Client-eye price-value tendering optimization

Abstract

Tendering situations have shown deficiencies in guidelines for pricing and appreciating the projects, leading to corrupt activities of officials involved, poor workmanship, and unjustifiably high prices, among others. The paper develops a mathematical models that is easy to apply, in setting preliminary guidelines for setting standard on the price and value of the projects. A mathematical theorem and a lemma are also developed and proved to confirm the mathematical optimization, which serves as preliminary optimization for the tendering process. Cost savings and value addition are integrated in the process of using the model. Project price/value optimization occurs in the model when negotiation and negotiation guidelines are incorporated in the model. The model encourages involving the reputable tenderers in the competition and elimination of disreputable ones, and discourages compromises on value and quality. In closing, paper recommends use of the mathematical optimization as the basis for effecting the ultimate costing/value optimization for the tendering and the project.