Mark-up on construction projects: what have we learnt in the last 20 years?

Abstract

PurposeWith the aim to provide a global view of factors affecting mark-up size on construction projects, this study performs a meta-analytical review of the relevant studies over the past 20 years.Design/methodology/approachThe analytical process involved the identification and evaluation of the importance of critical factors affecting mark-up size on construction projects, and the assessment of the generalisability of findings of the meta-analysis. A random-effects model was adopted in the statistical meta-analysis.FindingsThe results show that there are 23 critical factors, and the top five factors are: (1) competitiveness of other bidders; (2) number of bidders; (3) relationship and past experience with client; (4) experience on similar project; and (5) project size. A heterogeneity test further shows that there is no statistically significant heterogeneity across the studies, reinforcing the generalisability of the findings to a global context.Research limitations/implicationsThe list of critical factors from a global perspective should form a good basis for future efforts in bidding model development.Practical implicationsThe research findings have practical implications to both construction clients and contractors in formulating their contracting practices and strategies.Originality/valueThis is the first meta-analysis of a sizeable collection of replicated studies on factors affecting mark-up size on construction projects in the literature.