Objective Construction Contract Award using Cost, Time and Durability Utility

Abstract

Around the world, clients procure construction contracts aiming at project completion within predefined cost, time and quality constraints. In parallel, it is critical in the public sector to achieve the contract award as objectively as possible. In most cases, the public clients’ award is based on the lower price only; in the contracts, penalties are foreseen for time deadlines violation and quality control bad results. In the European Union legislation, the most economically advantageous tender is also considered as an award criterion, encompassing in fact many sub-criteria. The pros and cons of both approaches have extensively been discussed in the literature. Therefore, the choice of a procurement method that will combine the merits of both approaches to the wider possible extent is of utmost importance. In this paper, a new award method based on the most economically advantageous tender is proposed. The sub-criteria considered are construction cost, completion time and warranty offered by each bidder. Their objective evaluation is carried out by implementing utility theory. An illustrative worked example is provided.