Contract Bidding Research Articles

Assessing Blockchain In Supply Chain Management

Blockchain technology which is establishment of bitcoin, has been used in numerous fields with its fast development resulting in the beginning of new innovation. Supply chain data is not always noticeable, accessible or trusted. Supply chains contain complex networks of suppliers, manufacturers, distributors, retailers, auditors, and consumers. A blockchain's shared data innovation foundation would modernize work processes for all gatherings; it doesn't make a variation in the size of the business organization. Furthermore, a shared framework would give examiners more noteworthy visibility into participants’ activities along the block chain. Blockchain in Supply Chain Management empowers simple execution of safer and straightforward tracking of all kinds of transactions pertaining to areas such as product traceability, supplier payments, logistic transaction details, contract bids, and execution. This paper is a survey on blockchain in supply chain management. This paper focuses on the benefits of applying blockchain in supply chain management. It also discusses the issues faced in supply chain management and existing work in the related area.

Belt and Road initiative meets Africa: Exploring the state of play, the implications and the imperative for complementarities of interests

China’s Belt and Road Initiative (BRI) is expected to link the world to a gigantic trade and investment corridor, with China at the centre of the new multilateralism. Since its announcement in 2013, China has taken significant steps to actualise its vision through massive investment in infrastructure in the belt-road regions supported by Chinese financial institutions, including the Asian Infrastructure Investment Bank (AIIB). Critics argue that BRI is a covert means for China to exert greater influence on the global trade and investment landscape but China has countered this. Nevertheless, emerging evidence indicates that, beyond the promotion of trade and investment, China is using BRI to export overcapacity, internationalise renminbi, promote cultural diplomacy, secure resources and redefine the global order. Hence, African countries stand in danger of neocolonialism unless they optimise the partnership with China to foster a win-win situation. In particular, African countries must recognise the significance of deft management of unsustainable Chinese loans that may entrap them in future, embedding more transparency in contract bidding for infrastructure investment, insisting on capacity building and skill spillovers and ensuring that transnational dispute settlement with Chinese enterprises is adjudicated in a neutral venue, if African courts lack the jurisdiction to entertain the matter.

Proprietary Information Cost of Contracting with the Government

We argue that contracting with the federal government involves significant proprietary information cost due to regulations requiring contractors to provide confidential information, which may then become available to outsiders via Freedom of Information Act (FOIA) requests. We provide evidence by showing that firms become more willing to bid for government contracts after a recent Supreme Court ruling on FOIA that improves information protection for contractors, and the effect is stronger when the contracts incur higher information cost for contractors. In addition, stock prices of firms with larger amounts of government contracts respond more positively to the ruling.

Green-building information modelling (Green-BIM) assessment framework for evaluating sustainability performance of building projects: a case of Nigeria

ABSTRACT There is a research gap in the use of digital systems to aid the sustainability performance assessment of buildings, which informs the development of the green-BIM assessment (GBA) framework in this paper. The study employed a conceptual framework design, expert surveys, and case studies to identify and establish the different components of the GBA framework. The developed GBA framework incorporates the BSAM scheme as its primary green building rating system and provides a cost-effective solution for sustainability appraisal. The findings revealed that the 4Ws of the information exchange workflows would facilitate the GBA system's implementation and the expert validation confirmed its suitability for the Nigerian context. The C-SDSS served as the digital component of the GBA system towards automating the sustainability performance assessment of buildings. The GBA system provides the construction industry with a useful tool that could ease comparing two or more building projects or its designs for several uses – such as contract bidding, evaluating alternative designs, and the like. The application of the GBA system can be extended to facilitate its adoption in other regions or countries. The study’s deliverables are expected to enhance smart and eco-initiatives in Nigeria and sub-Saharan Africa.

Predicting City-Level Construction Cost Index Using Linear Forecasting Models

AbstractBecause of the importance of budget planning and contract bidding, accurate prediction of future movements of the construction cost index (CCI) has been a crucial part of construction cost ...

Political Influence and the Renegotiation of Government Contracts

Abstract This paper provides novel evidence that corporate political influence operates through renegotiations of existing government contracts. Using detailed data on contractual terms and renegotiations around sudden deaths and resignations of local politicians, the estimates show that politically connected firms initially bid low and successfully renegotiate contract amounts, deadlines, and incentives. The effects hold across different industries and contract types, enhance firm value, and persist around the exogenous increase in contract supply due to the American Recovery and Reinvestment Act. Overall, this paper establishes an unexplored link between political influence, ex post renegotiations, and ex ante bidding of government contracts.

A Study on the Application of Blockchain Technology in the Construction Industry

Blockchain technology has been recognized as one of the emerging technologies that can significantly innovate many industries. Major advantages of using blockchain technology includes reducing transaction costs, preventing data forgery and alteration, and further flexibility. The construction industry is generally considered as an industry that has great potentials for blockchain technology utilization mainly due to the high volume of transactions among various entities. Despite the perceived positive impact, there have been few cases of blockchain applications within the construction industry. This study is conducted with an aim of finding ways to apply blockchain technology to the construction industry. In order to identify potential application areas, construction lifecycle and project management knowledge areas are used in developing a survey questionnaire. Data collected from the survey is analyzed by employing importance performance analysis (IPA) method considering both applicability of the technology and anticipated impact from utilizing the technology. In relation to the construction project lifecycle, ‘Project Cost/Change Management’, ‘Contract Bidding and Formation’, and ‘Procurement Evaluation’ are emerged as top three candidates for blockchain application with high applicability and impact. Regarding the knowledge area, ‘Procurement Management’ and ‘Cost Management’ are identified as the main blockchain application areas with high applicability and impact. All the identified specific construction tasks with high applicability and impact are related to ‘Procurement’, ‘Contract’, and ‘Cost’. Therefore, it is reasonable to start focusing blockchain convergence efforts these areas and then expand them as the technology matures.

Analysis of Cost Overruns in Saudi Arabia Construction Projects: A University Case Study

Public projects in Saudi Arabia have been experiencing low construction project performance for the past decade. Studies have identified the low-bid delivery method as an important factor in causing such delays. In addition, low bids for contracts have not reflected the actual project cost. A case study was conducted at a university campus in northern Saudi Arabia in which the actual project costs for four projects were examined. The study found that all four projects’ costs were higher than the original bid. In addition, a large survey was conducted of 804 classified contractors and universities representatives who identified change orders as the most common factor causing cost overruns in Saudi Arabia. Previous studies showed that some contractors aim to submit low bids for winning the competition then change orders to reduce their losses. Consequently, low bids also lead to cost overruns. In a comparison using the result of a case study and the results of the Performance Information Procurement System (PIPS), Saudi Arabia’s delivery system was identified as a potential cause of project performance issues.

The contractor time–cost–credit trade‐off problem: integer programming model, heuristic solution, and business insights

AbstractContractors in the construction sector face several trade‐offs between time and cost. The time–cost trade‐off (TCT) is one of these trade‐offs where contractors can reduce a project completion time by assigning more resources to activities, which means spending more money, to shorten the execution times of project activities. On the other hand, contractors who finance their projects through credit lines from banks such that if they reach their credit limits, then the start times of some project activities can be delayed until cash is available again, which might lead to an increase in the project execution time; thus, contractors need to consider the time–credit trade‐off. In this work, we simultaneously consider these two trade‐offs that affect the project completion time and use mixed integer linear programming (MILP) to model the contractor time–cost–credit trade‐off (TCCT) problem. The MILP model minimizes the project execution time given the contractor's budgetary and financial constraints. In addition to the MILP model, we also develop a heuristic solution algorithm to solve the problem. Through a set of benchmark instances, we study the effectiveness of the heuristic algorithm and the computation time of the exact model. It is found that a good upper bound for the MILP results in less computation time. We also study some practical aspects of the problem where we highlight the importance of expediting contractor payments in addition to selecting a financially stable contractor. Finally, we use our MILP model to help a contractor bid for a project.

Contract Enforcement and Productive Efficiency: Evidence From the Bidding and Renegotiation of Power Contracts in India

Weak contract enforcement may reduce the efficiency of production in developing countries. I study how contract enforcement affects efficiency in procurement auctions for the largest power projects in India. I gather data on bidding and ex post contract renegotiation and find that the renegotiation of contracts in response to cost shocks is widespread, despite that bidders are allowed to index their bids to future costs like the price of coal. To study heterogeneity in bidding strategies, I construct a new measure of firm connectedness, based on whether a firm has been awarded coal concessions by the Government. Connected firms choose to index less of the value of their bids to coal prices and, through this strategy, expose themselves to cost shocks to induce renegotiation. I use a structural model of bidding in a scoring auction to characterize equilibrium bidding when bidders are heterogeneous both in cost and in the payments they expect after renegotiation. The model estimates show that bidders offer powerbelowcost due to the expected value of later renegotiation. The model is used to simulate bidding and efficiency with strict contract enforcement. Contract enforcement is found to be pro‐competitive. With no renegotiation, equilibrium bids would rise to cover cost, but markups relative to total contract value fall sharply. Production costs decline, due to projects being allocated to lower‐cost bidders over those who expect larger payments in renegotiation.

Algorithmic Provision of System of Optimal Distribution of Tender Projects between Executors by Types of Work in Mining Industry

Today, in order to manage a mining and industrial enterprise, it is necessary to ensure the planning and management of the project activities of the company at all its stages. During the implementation of the project, at the initial phase of its life cycle, a significant impact on further success is provided by the resource and procurement management subsystem in particular. This subsystem is responsible for the material and technical support of the project, including the processes of acquiring goods, products and services from external supplier organizations: selection of suppliers and contractors and conclusion of contracts with them. In a market economy, the best solution to the problem of selecting performers is possible only in free competition. For this reason, the most commonly used form of selection of contractors for work put forward by the customer is the competitive form. This selection form is implemented in the form of contract bidding, or tender. Due to the breadth of the spread of the competitive form of selection of proposals for work on pre- announced conditions, the problem of selecting performers for a particular project from the number of applicants for the tender becomes urgent. In this case, it is necessary to take into account the requirements for the work execution process and for counterparties with whom contracts are concluded based on the results of tenders. The solution of the problem of the optimal assignment of contractors applying for projects on a competitive basis significantly increases the efficiency of financing distribution, reduces the time frame for the implementation of the work package and produces a general positive economic effect, which determines the relevance of the research topic.

Contract bidding and quality of industrial and civil construction

Quality in construction industry can be defined as the attainment of acceptable levels of performance from construction activities. This performance would be attained when the activity meets or exceeds the requirement of the client or the owner. The quality of any product or service is achieved when it conforms to the desired specifications. Achieving quality in construction industry in long run is a tough issue and has been a problem. Inefficient or no practice of quality management procedures will result in great loss of time, money, material, resources. As a result of the size and cost of most construction projects, these efforts must fit into the legal framework governing the particular property. This framework will incorporate governmental regulations on the use of the property and various obligations that are created during the process of the construction. This bidding system is the most relevant today, because it allows you to create competitive conditions for applicants for construction, choose the best contractor and conclude a contract with him on the most favorable terms, while respecting the quality of both the bidding procedure and the construction process

Design of a web – based online Contract Administrative System platform of an Engineering firm

This paper is aimed at designing a dynamic web – based Contract Bidding Information System that will be used to register details online to enable bidding for advertised contracts. It was motivated by the growing recognition of the need to modify bidding operation previously done manually. The Structured System Analysis and Design Methodology (SSADM) was used to develop a contract bidding system. A web – based application will be developed to enable bidders register and submit their biddings online.

Danish Court: Consortium Agreement and Joint Bidding Permissible under Competition Law

The legality of consortium agreements and joint bidding for public contracts under competition law has been a widely debated subject over the past couple of years. On 27 August 2018, the Danish Maritime and Commercial High Court rendered a much anticipated judgment on this subject. The judgment is now under appeal to the Danish Supreme Court. In its judgment, the Court repealed the Danish competition authorities’ decisions in a case regarding a consortium agreement between two companies relating to their joint bid on a public tender for road marking works in Denmark. According to the competition authorities’ decisions, the consortium agreement and the joint bid was a by object infringement of competition law. However, the Danish Maritime and Commercial High Court disagreed and held that the agreement did not infringe competition law. This article sets out the background to the proceedings, summarises the key findings of the court and comments on the legality of consortium agreements and joint bidding for public contracts under competition law.

Contract Enforcement and Productive Efficiency: Evidence from the Bidding and Renegotiation of Power Contracts in India

Weak contract enforcement may reduce the efficiency of investment in developing countries. I study how contract enforcement affects efficiency in procurement auctions for the largest power projects in India. I gather data on bidding and ex post contract renegotiation and find that the renegotiation of contracts in response to cost shocks is widespread, despite that bidders are allowed to index their bids to future costs like the price of coal. Connected firms choose to index less of the value of their bids to coal prices and, through this strategy, expose themselves to cost shocks to induce renegotiation. I use a structural model of bidding in a scoring auction to characterize equilibrium bidding when bidders are heterogeneous both in cost and in the payments they expect after renegotiation. The model estimates show that bidders offer power below cost due to the expected value of later renegotiation. The model is used to simulate bidding and efficiency with strict contract enforcement. Contract enforcement is found to be pro-competitive. With no renegotiation, equilibrium bids would rise to cover cost, but markups relative to total contract value fall sharply. Production costs decline, due to projects being allocated to lower-cost bidders over those who expect larger payments in renegotiation.

Contract Enforcement and Productive Efficiency: Evidence from the Bidding and Renegotiation of Power Contracts in India

Weak contract enforcement may reduce the efficiency of investment in developing countries. I study how contract enforcement affects efficiency in procurement auctions for the largest power projects in India. I gather data on bidding and ex post contract renegotiation and find that the renegotiation of contracts in response to cost shocks is widespread, despite that bidders are allowed to index their bids to future costs like the price of coal. Connected firms choose to index less of the value of their bids to coal prices and, through this strategy, expose themselves to cost shocks to induce renegotiation. I use a structural model of bidding in a scoring auction to characterize equilibrium bidding when bidders are heterogeneous both in cost and in the payments they expect after renegotiation. The model estimates show that bidders offer power below cost due to the expected value of later renegotiation. The model is used to simulate bidding and efficiency with strict contract enforcement. Contract enforcement is found to be pro-competitive. With no renegotiation, equilibrium bids would rise to cover cost, but markups relative to total contract value fall sharply. Production costs decline, due to projects being allocated to lower-cost bidders over those who expect larger payments in renegotiation.

Fuzzy AHP Application for Supporting Contractors’ Bidding Decision

This paper proposes the author’s model based on the Fuzzy Analytic Hierarchy Process (FAHP) to improve the efficiency of contractor bidding decisions. The essence of the AHP method is to make pairwise comparisons of available options against all evaluation criteria. The results of these comparisons are recorded in a square matrix in which symmetrical elements are reciprocal. In the expert opinion, a 9-step, bipolar verbal scale was used so that the symmetry of the response was maintained. For contractors from countries where the tendering system is commonly used, the choice of the right tender in which to participate influences their image, financial condition, and their aspiration to succeed. The bid/no bid decision depends on numerous factors associated with the company itself, the environment, and the project concerning the tender. When facing tough competition, contractors search for a solution which increases their chances of winning the tender. The proposed model was based on factors selected by Polish contractors. The original element of the model involves 4 original criteria and 15 sub-criteria for the assessment of investment decision projects to the selection of the most advantageous contract, i.e., the contractor’s participation in the bid. For verbal evaluations describing the criteria, symmetric triangular fuzzy numbers were assigned. The authors performed an extended analysis method combined with FAHP in the model. Fuzzy evaluations underwent elaborate analysis, the aim of which was to specify the synthetic priority weights for each criterion. As a result of the application of the method, to prove that the model works, an example from the Polish construction market was presented in which a bid/no bid decision about four possible tenders was to be taken. Despite the considered example applying to Polish conditions, the proposed model can be used also in other countries. The authors’ rationale is to produce new and more flexible methodologies in order to realistically model a variety of concrete decision problems.

How many want to drive the bus? Analyzing the number of bids for public transport bus contracts

This paper examines how different factors related to contract characteristics and the operational and tender environments affect the number of unique bidders placing bids in tenders for bus contracts. A generalized Poisson model is used with a comprehensive data set containing most of the recently tendered bus contracts in Sweden, spanning the period 2007–2015.The main finding from the analysis is that most contract characteristics change participation in tenders by approximately 0.1–0.5 bidders. Operator-restricting measures such as special requirements on buses have a similar limited effect. Further, the number of tenders that are open at the same time as a specific tender was shown to reduce participation by almost two bidders. Finally, there is evidence that the local competitive environment is of importance, and the public transport authorities therefore need to be concerned with entry barriers in their tenders.

RC Arch Deck Development and Performance Evaluation for Enhanced Deck Width

Due to extreme business competitions in bridge construction industries, the cost reduction became the most important issue in winning a contract bidding. The largest bridge construction cost saving can be obtained by using precasted construction method and by reducing required number of girders, columns, and decks in the bridge system. Therefore, an precasted arch deck system is proposed to widen the lateral span of the deck, which can result in reducing the number of required I-type PSC girders for construction cost saving. A usual lateral width of a flat deck is 1.5–2.0 m, but the width of arch deck is 2.5 m, an increase of 25–60%. Therefore, for a PSC girder bridge with a total width 10 m, a number of required girders needed for ordinary flat RC deck and arch deck is 5 and 4, respectively. This means that one less girder can be required, which means that 20% of girder construction cost can be achieved by using arch deck over ordinary flat deck. In this study, precasted RC arch deck is developed and manufactured to evaluate structural performance of the deck. The study results showed that arch deck has performance exceeding ordinary flat deck and can be used as alternative decks for precasted PSC I-girder bridge construction. The study results are discussed in detail in the paper.

Valuation of Bid and Ask Prices for Cap and Floor Contracts In a Fractional Vasicek Model

This paper derives bid and ask formulas for cap and floor contracts by using Wang trans- form under fractional version of the Vasicek interest rate model. To do this, first the parameters of the model are estimated by MLE calibration method, then standard and fractional version of the Vasicek model are compared by the Akaike information criterion. Finally, we use the model with the set of calibration parameters to calculate Bid-Ask boundaries for interest rate amount and cap and floor prices.