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

Mohammad Alsaedi,Abdullatif Abdallah,Mohammad Hassanain,Sadi Assaf

doi:10.3390/buildings9020033

Mohammad Alsaedi, Abdullatif Abdallah + Show 2 more

Open Access

https://doi.org/10.3390/buildings9020033

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Journal: Buildings	Publication Date: Jan 29, 2019
Citations: 18	License type: CC BY 4.0

Affiliation: King Fahd University of Petroleum and Minerals

Abstract

One of the critical decisions taken by contractors is whether or not to bid for a project. This is due to the complexity and uncertainty surrounding this decision, which is influenced by many factors. Given the above challenge, this study aimed to uncover the critical factors affecting the contractors’ bidding decisions in Saudi Arabia-based construction projects. A questionnaire survey, which consisted of 31 factors, was distributed to first-, second- and third-grade contractors. In total, 67 responses were obtained. Median and relative importance index (RII) techniques were adopted for ranking the most critical factors. Based on the received responses, the top six critical factors were “size of the job”, “type of the job”, “company’s strength in the industry”, “designer/design quality”, “rate of return”, and “project cash flow”. The least significant factors were “job start time” and “labor environment (union/nonunion/cooperative)”. The findings of this study show a level of agreement among all contractors about the critical factors. The findings would benefit contractors and subcontractors by increasing their understanding of the major factors affecting the bidding decision process. Contractors armed with such valuable information will be better able to enhance their bidding decision-making process in terms of efficiency and effectiveness.

Highlights

A contractor can secure a job in two possible ways
The factors affecting the contractors’ bidding decisions for construction projects in Saudi Arabia were investigated, taking the Eastern Province as a case study. 31 factors were identified from a review of the literature in this field
These factors were categorized into four main groups, namely, “project characteristics”, “market characteristics”, “contractor characteristics”, and

Summary

Introduction

A contractor can secure a job in two possible ways. There is direct negotiation with either the client, or the client’s representative, and there is bidding [1]. Assuming a decision is made to bid, the process of preparing a bid package demands considerable time and resources [3] Owing to this fact, contractors have to weigh the benefits and costs of preparing a bid. Factors may be internal or external [7] and may pertain to the unique features of a project and the dynamic changing nature of construction [3] Added to this already complex situation is the fact that these factors have a high degree of complicated interrelations [8]. Considering these factors in a limited time period presents another constraint [9]. The bidding decision can have significant impact on the daily operation as well as the long-term performance of a contractor [4]

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