Procurement of construction services: a case study on bidding competition in Singapore public sector contracts

Abstract

There are many variables that public clients need to consider in their bidding procedure to enhance efficiency in their procurement for construction services. This paper focusses on the competitive bidding process for public sector procurement of construction services in Singapore. A distinctive feature of the Singapore government competitive bidding process is that full bidding feedback information is released to all competing bidders (and public). The specific objectives are: (i) to examine the degree of competition in the construction markets; and (ii) to examine the bidding performance of competing bidders. Based on a collection of bidding data for a 15-month period, the results show the market environment of the Singapore public sector construction contracting is highly competitive with long bidder lists. In selection of contractors, only 50% of the contracts were awarded to lowest bidders. The results also show that the competing contractors can be broadly classified into three groups based on their bidding performance in terms of number of bidding attempts, bidding success rate and bidding competitiveness. These results provide a useful insight into the bidding competition in the Singapore public sector construction contracting, especially to new market entrants and foreign contractors who want to bid for jobs in Singapore.