Investigation of Unbalanced Bidding for Economic Sustainability

Shrestha, Pramen P.; Shrestha, Kishor; Joshi, Vedaspati

doi:10.1061/9780784412688.073

Cited by 19 publications

(11 citation statements)

References 12 publications

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“…Afshar and Amiri, 2010a;2010b;Cattell et al, 2008;Christodoulou, 2008;Liu et al, 2009;Nassar, 2004;Su and Lucko, 2014;2015), and 2. the studies that aim to develop models that assist owners in detecting and/or preventing unbalanced bids during the bid evaluation stage (e.g. Arditi and Chotibhongs, 2009;Bell, 1989;Hyari, 2016;Hyari et al, 2016;Nikpour et al, 2017;Renes, 2012;Shrestha et al, 2012;Skitmore and Cattell, 2013;Venkatesh and Rao, 2017;Wang, 2004;Yin et al, 2010).…”

Section: Unbalanced Bidding In the Construction Industrymentioning

confidence: 99%

“…Renes (2012) suggested that unbalance bidding can be eliminated or mitigated by hiding quantities of activity estimated by owner, and also proposed that estimated quantities for each bid item may be presented to bidders as a range of values rather than as a single value. Shrestha et al (2012) conducted a linear correlation analysis to investigate whether bidders were applying front-end loading method or not. Skitmore and Cattell (2013) presented a simulation study, which illustrates the likely impacts of using typical unbalanced bid detection methods under some assumptions.…”

Section: Detection and Prevention Of Unbalanced Bids: The Developed Mmentioning

confidence: 99%

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A Grading System-based Model for Detecting Unbalanced Bids during the Tendering Process

Polat

Turkoglu

Damcı

2019

Period. Polytech. Arch.

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Unbalanced bidding is a common practice used in both unit price and lump sum contracts. Contractors may unbalance their bids in different forms for various reasons. The studies in the literature either focus on developing optimization models that assist contractors in winning contracts and maximizing profits of their bids through unbalancing or developing models that assist owners in detecting and/or preventing unbalanced bids during the bid evaluation stage. Unbalanced bidding is one of the most controversial subjects in the construction management literature and practice. Although there is no consensus on whether it is unethical or not, this practice is not usually for the benefit of owners. Therefore, owners have the right to reject the unbalanced bids and create a fair competition environment if they have a mechanism to detect it during the bid evaluation process. The main objective of this study is to propose a model, which consists of five different grading systems and helps owners in detecting unbalanced bids during the tendering process. In the proposed model, owners may either calculate the individual grades of each bidder or calculate the final score of each bidder by assigning different weights to these grading systems according to the project characteristics or their own needs. The final scores and bid prices of the contractors can be simultaneously evaluated. In order to demonstrate the applicability of the proposed model, an illustrative example is presented. It can be concluded that the proposed model can be effectively and easily used by owners for detecting unbalanced bids. This paper is the revised version of the paper that has been published in the proceedings of the Creative Construction Conference 2018 (Polat et al., 2018).

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Section: Unbalanced Bidding In the Construction Industrymentioning

confidence: 99%

Section: Detection and Prevention Of Unbalanced Bids: The Developed Mmentioning

confidence: 99%

A Grading System-based Model for Detecting Unbalanced Bids during the Tendering Process

Polat

Turkoglu

Damcı

2019

Period. Polytech. Arch.

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“…Renes (2012) also proposed that estimated quantities for each bid item may be presented to bidders as a range of values rather than as a single value [18]. Shrestha and Joshi (2012) conducted a linear correlation analysis to investigate whether bidders were applying front-end loading method [19]. Skitmore and Cattell (2013) presented a simulation study, which illustrates the likely impacts of using typical unbalanced bid detection methods under some assumptions [20].…”

Section: Detection and Prevention Of Unbalanced Bids: The Developed Mmentioning

confidence: 99%

Detection of unbalanced bids: A case study

Polat¹,

Turkoglu²,

Damcı³

2018

Creative Construction Conference 2018 - Proceedings

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An unbalanced bid can be defined as a bid price that does not accurately reflect reasonable cost, contractor's profit, general overhead cost and other indirect costs. Selecting an unbalanced bidder as the contractor may lead to significant increases in the contract price. Therefore, detecting the unbalanced bids is a critical issue for owners. There are two main types of unbalanced bid, which consists of front-end loaded and quantity error exploitation. This study mainly focuses on the second type, namely quantity error exploitation, in which a contractor tends to increase the unit prices of items that are underestimated and reduce the unit prices of items that are overestimated because of errors in the estimated quantities. If an owner can detect the unbalanced bids during the awarding stage, a fair competition environment can be achieved. This study aims to provide owners with a model, which may assist them in detecting unbalanced bids. The proposed model uses five different grading systems. Owners may assign different weights to these grading systems and thereby the final score of each bidder can be calculated. All bidders can be evaluated based on the calculated final scores as well as the offered bid prices. The applicability of the proposed approach is demonstrated in an illustrative example. The findings of this study revealed that the proposed approach can be a useful tool for owners in detecting unbalanced bids.

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“…The existed research shows that unbalanced bidding commonly occurs in construction industry, and it has a serious impact for owner (Yin, Lu, & Li, 2010;Abdulrahman, Hanid, & Xiang, 2014). The contract awarded an unbalanced bidding is likely to result in overrun of project cost (Arditi & Chotibhongs, 2009;P. P. Shrestha, K. Shrestha, & Joshi, 2012).…”

Section: Introductionmentioning

confidence: 99%

Multi-Criteria Decision Making for Identification of Unbalanced Bidding

Wang

et al. 2019

Journal of Civil Engineering and Management

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Unbalanced bidding is a serious problem in the competitive bidding practices of construction projects. Identification and prevention of unbalanced bidding is an important and complexity task for owners. This paper aims to propose an identification model of unbalanced bidding from multi-criteria decision making (MCDM) perspective. The VIKOR method is employed to detect unbalanced bidding, in which the line items and bidders are considered as criteria and alternatives in MCDM, respectively. And the engineer’s estimated price is chosen as evaluation benchmarking. Then relative distances between engineer’s estimated price and each bidding unit price are calculated to build decision matrix. The weights of factors are determined using entropy weight method. To illustrate the effectiveness of the proposed model, an application example is tested in detecting unbalanced bidding. Finally, the sensitivity analysis about VIKOR method is given. It shows that the presented model would provide a robust decision making support for owner in identifying unbalanced bidding.

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Investigation of Unbalanced Bidding for Economic Sustainability

Cited by 19 publications

References 12 publications

A Grading System-based Model for Detecting Unbalanced Bids during the Tendering Process

A Grading System-based Model for Detecting Unbalanced Bids during the Tendering Process

Detection of unbalanced bids: A case study

Multi-Criteria Decision Making for Identification of Unbalanced Bidding

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