Factors Affecting Contractors’ Bidding Decisions for Construction Projects in Saudi Arabia

Alsaedi, Mohammad; Assaf, Sadi; Hassanain, Mohammad A.; Abdallah, Abdullatif

doi:10.3390/buildings9020033

Cited by 28 publications

(19 citation statements)

References 25 publications

(43 reference statements)

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“…In the case of having equal means, the criterion with a lower standard deviation is ranked higher, as a smaller standard deviation illustrates that the values are closer to the calculated arithmetic mean. Whereas previous bidding studies such as Olatunji et al (2017) investigating the influencing factor have based the ranking on the significance values, this study draws up Alsaedi et al (2019) that used the mean score or relative importance index (RII) as the basis of discussion the highly ranked factors, and using the significance values to flag up and supplement the discussion of those among the highly ranked factors. Likewise, Oyeyipo et al (2016) used the mean score as the basis for ranking the 48 factors affecting the bid/no bid decisions based on the overall sample, and significance applied to detecting the differences in the ranking of two different types contractors (i.e.…”

Section: Survey Results and Findings Agreement And Consistency Of Responsesmentioning

confidence: 99%

Perception on challenges impacting bid decision of indigenous building contractors in Dar Es Salaam, Tanzania

Chileshe

Edwards

Kavishe

et al. 2020

JEDT

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Purpose The acknowledged mode of securing work by contractors is through the bidding process. However, the bidding decisions undertaken by some indigenous contractors in developing countries are fraught with challenges that often engender bidding practices (such as collusion through price fixing and intentional lower bidding) and threaten business survival. Therefore, in the quest to better understand these challenges and viable advocate solutions for overcoming them, this paper aims to identify the key challenges impacting the bid decision process by small indigenous building contractors in Dar es Salaam, Tanzania, and establish the strength of their relationship between the pairs of key challenges. Design/methodology/approach A comprehensive literature review was conducted to identify nine challenges impacting the bid decision of indigenous building contractors in Tanzania, which were used to design a questionnaire survey. Data collected were analysed using descriptive statistics, mean score, inferential statistics (One sample t-tests), Kendall’s concordance and correlation analysis. Findings Challenges identified from a literature review were empirically tested using survey responses accrued from 33 participating small indigenous building contractors in Dar es Salaam, Tanzania. The findings illustrate that lack of liquidity, profit returns, lack of equipment, lack of experience of several works and procurement procedures are perceived as being the five most critical challenges. Project location, site accessibility and lack of labour were least critical. The major finding from the correlation analysis was the existence of the strong and positive correlation between “project location” and “site accessibility”. Research limitations/implications The study is limited by its sample and geographical settings which focussed and confined the results on one country, Tanzania. However, the findings can be considered as important for other developing countries wishing to gain insights into the challenges impacting bid decisions. Practical implications Measures for addressing the identified challenges impacting the bidding decisions of the indigenous small building contractors would be undertaken. The findings will enable contractors to not only reconcile the challenges with the industry and in so doing benefit both themselves and the clients but also enable them to be better prepared to deliver contractual obligations and generate socio-economic wealth. Government and policymakers will also be able to appropriately develop macro interventions for managing these challenges, which could be custom-tailored to indigenous small contractors. Finally, improving the ability of local firms to compete in the construction industry has been recognised as having the potential of advancing socio-economic development within the comity of developing countries. Originality/value The study enhances government, client and practitioners’ understanding of the challenges affecting the bidding practices among the indigenous building contractors in Tanzania. This area of investigation has previously been under explored particularly sub-Saharan Africa.

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Section: Survey Results and Findings Agreement And Consistency Of Responsesmentioning

confidence: 99%

Perception on challenges impacting bid decision of indigenous building contractors in Dar Es Salaam, Tanzania

Chileshe

Edwards

Kavishe

et al. 2020

JEDT

View full text Add to dashboard Cite

show abstract

“…Therefore, it is critical to uncover the potential factors limiting investor's bidding decision for construction projects under the PPP arrangement. Several research work have been conducted on the factors affecting contactor bidding decision on construction projects (Shash 1993;Alsaedi et al 2019;Oyeyipo et al 2019). However, there is a dearth of study addressing the challenges confronting the financial investor's in the bidding process for PPP construction project.…”

Section: Introductionmentioning

confidence: 99%

Evaluating barriers inhibiting investors participation in Public-Private Partnership project bidding process using structural equation model

Ojelabi

Oyeyipo

Afolabi

et al. 2020

International Journal of Construction Management

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The study investigates the critical barriers restraining private investors from participating in the PPP construction project bidding process. Hence, three key potential inhibiting factors, which include political constraints, public sector poor PPP capacity, and undefined project scope, were investigated. Therefore, the study adopted a quantitative research technique through a questionnaire survey to obtain data from 384 PPP practitioners sample representative in Lagos and Abuja, Nigeria. The survey recorded 274 responses, and SmartPLS (v.3.2.3) was used for the data analysis. The study developed a conceptual model to formulate hypotheses which were validated with Smart PLS3. Findings from the study indicated that the three key factors have a significant effect on the private investor's decision not to participate in the PPP bidding process. The findings from this study can help the government understand how to attract investors under her PPP arrangement. The study is unique based on the research idea and approach.

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“…One of the most crucial decisions regularly exercised by construction contractors is determining whether to bid on a certain project [13][14][15]. This decision is so complicated due to the complexity and uncertainty surrounding this determination, which is influenced by many factors [16,17]. The bidding process is highly complex and unsystematic, requiring numerous factors to be considered simultaneously [18], which have a high degree of complicated interrelations [19][20][21].…”

Section: Project Selection and Contractor's Tender Strategymentioning

confidence: 99%

A Bid/Mark-Up Decision Support Model in Contractor’s Tender Strategy Development Phase Based on Project Complexity Measurement in the Downstream Sector of Petroleum Industry

Faraji

Rashidi

Eftekhari

et al. 2022

Journal of Open Innovation: Technology, Market, and Complexity

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The tender process is an inseparable step of the contract award process in the public sector, and from the other point of view, it is one of the crucial elements of the core business of construction contractors. Reviewing previous research reveals a gap in the application of a project’s detailed features and historical data to support the bid/no-bid decision and to determine the cost and time contract mark-ups. In this study, a prescriptive project complexity-based model is proposed to support the bid decision in the tender strategy development phase of a contractor for the downstream sector of the petroleum industry in Iran. For this purpose, regression analysis of historical data is adopted to configure the model and to infer from previous actual trends by exploring relationships between the contractor’s bid decision and proposed mark-ups with the project’s inherent and surrounding complexity factors. Hence, using experts’ opinions and historical data from 139 previous contracts as training and test data, a model was developed to make a decision on a bid and mark-up problem. The results of the model validation show that the credibility of the model is 74.67% and 75.36% for time and cost, respectively, and the reliability of model outputs is approximately 90% overall in predicting the bid mark-ups in accordance with the project complexity index (PCI). The main contribution of this research to current knowledge has two aspects: utilizing the complexity concept for the tender problem in the form of a project complexity index (PCI) and considering both time and cost mark-ups (TMU–CMU) in the contractor’s bid simultaneously. In addition, the results show that the more complex the project is, the higher the bid rate is.

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Factors Affecting Contractors’ Bidding Decisions for Construction Projects in Saudi Arabia

Cited by 28 publications

References 25 publications

Perception on challenges impacting bid decision of indigenous building contractors in Dar Es Salaam, Tanzania

Perception on challenges impacting bid decision of indigenous building contractors in Dar Es Salaam, Tanzania

Evaluating barriers inhibiting investors participation in Public-Private Partnership project bidding process using structural equation model

A Bid/Mark-Up Decision Support Model in Contractor’s Tender Strategy Development Phase Based on Project Complexity Measurement in the Downstream Sector of Petroleum Industry

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