The factors influencing bid mark-up decisions of large- and medium-size contractors in Singapore

Abstract

The construction industry in Singapore is dominated by a competitive business environment that is being driven by a lowest cost mentality. The pressure on contractors' profit margins has further increased after a prolonged recession in this sector, which has seen construction demand and output shrinking significantly. This paper examines the factors that contractors perceive to be important when they are considering the size of their bid mark-up. The research hypothesis is that contractor size would have a significant bearing on the factors that would influence the bid mark-up decision. Forty factors were identified and a survey was conducted. The results showed that contractor size has a significant impact on their attitude towards bid mark-up decision-making. The analysis also showed that when deciding the size of a bid mark-up large contractors tend to be more concerned with the nature of the construction work while medium-size contractors are more concerned about the state of their own companies finance.