To bid or not to bid: a parametric solution

Abstract

One of the most important decisions that has to be made by construction companies/contractors is whether or not to bid for a new project when an invitation has been received. It would be of great help if a structured model could be developed that deals systematically with different bidding situations. A simple parametric solution for the ‘;bid/no bid’ decision is reported in this paper. This solution is based on the findings of six semi-structured interviews and a formal questionnaire through which 38 factors that affect the bid/no bid decision were identified and ranked according to their importance to contractors operating in Syria. Only the most influential factors were considered in the development process. The model was optimized using data about 162 real bidding situations. Then the optimized model was tested using another 20 real projects. It proved 85% accurate in simulating the actual decisions. Although, the proposed model is based on data from the Syrian construction industry it could be modified very easily to suit other countries.