Factors considered by successful and profitable contractors in mark-up size decision in Singapore

Abstract

Identifying the optimum mark-up for a project increases the chance of winning the tender. The aim of this study is to investigate the factors considered by more successful and profitable contractors in mark-up size decision. From the literature, 52 factors that may affect mark-up were identified. A postal survey was conducted to whether contractors felt that the factors are important in determining mark-ups. The questionnaire requested respondents to indicate on a five-point scale the importance of various factors. They were also asked the usual profitability level in their successful projects and their success rates in tendering. Data were collected via mailed questionnaire. Twenty-one of the 52 factors were found to be important. Of these, factors relating to client characteristics (payment record, size and type of client) are the most significant. Contractors who are profitable and successful would place more emphasis on factors that affect schedule-cost-quality of the project. It is recommended that contractors who are less profitable and successful take note of these findings.