Abstract
The paper proposes that a game-theory-model approach can provide owners with a method of determining the level of bid compensation that should be used to induce additional bidders and improved concept development solutions bid ‘quality’ by bidders on design–build or build–operate–transfer or BOT projects under a lump sum bid LSTK delivery system. The paper includes a good explanation of game theory and the information needed to make decisions in the proposed decision model. The approach and proposed solution beg the question: If “bid compensation level” is a problem, why hasn’t anyone looked at the results of using bid compensation on high-cost bids over the previous 15 years in the various markets, sectors, or locations of the construction industry? And if they did, how do that data affect this paper?
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