Prioritizing Best Value Contributing Factors for Contractor Selection: An AHP Approach

Abstract

Construction procurement has evolved from low-bid system to Best Value (BV). This paper presents BV based contractor selection mechanism using Analytical Hierarchy Process (AHP). BV process postulates the selection of contractor who can deliver the project in best possible way in terms of budget, quality, customer satisfaction and other success criteria. AHP is used to prioritize BV contributing factors (CFs) critical to contractor selection. This paper examines the CFs identified from literature published from 2000 to 2015 and provides the project owners a methodology of quantifying their relative effects in selecting BV contractor. The results indicate that past performance is the most significant among the 15 factors considered in contractor selection followed by cost. This is mainly due to resistance to change which encourages reputation-based procurement in construction industry blocking way for new entrants. This study helps value based contractor selection rather than the traditional low bid system. Further, it can be used by all stakeholders in a contract: client for BV contractor selection, contractor for BV supplier and consultant for BV team selection. The study can be enhanced in future to include all parties to a contract and ensure a win-win-win contracting model.