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.