Integrating value estimation and simulation for contractor selection

Abstract

Studies have developed contractor selection models to help owners evaluate and select contractors. A contractor is expected to contribute not only an exchange value in the construction stage, but also value-in-use during both the construction and operations stages. However, existing models overlook value-in-use, and thus, do not offer a complete estimation of a project's value. Thus, this study proposes a value estimation model using the service-dominant logic, which emphasizes an owner's journey throughout the project and considers both exchange value and value-in-use. The model structures and estimates construction project value according to potential events caused by the contractor. By integrating the simulation mechanism, the model compares project values among contractors. The study introduces an example project to demonstrate the utilization of the proposed model in selecting the most valuable contractor.