Factors considered in tendering decisions by top UK contractors

Abstract

Decision-making involves a process by which a choice is selected from a number of options. Bid decisions by contractors are complex due to uncertainty about many factors affecting their outcomes. This study was able to identify, through a questionnaire survey, 55 factors characterizing the bid decision-making process. The questionnaire was mailed in August 1990, to 300 top contractors in the UK. The results indicate that several factors are considered equally important for bid/no bid and markup size decisions. Other factors are seen to have considerable importance for one decision but not for another. The need for work, the number of competitors tendering, and the amount of experience on such projects are identified as the top three factors that affect a contractor's decision to bid for a project. The degree of difficulty, the risk involving owing to the nature of the work, and the current work load are the highest ranked factors affecting markup size decisions.