Tender Evaluation Process Research Articles

Digitalization and tender evaluation in construction projects: a BIM-integrated MCDA approach supported by Macbeth

The tender evaluation process in the procurement for construction works, aligned with regulations such as the European Directive 2014/24/EU, faces various constraints, increasingly acknowledging the impact of digitalization, particularly through Building Information Modeling (BIM). Therefore, a thorough BIM-integrated multi-criteria decision analysis approach is vital to fairly select the best contractor for the job and ensure project success. Despite its significance, the literature remains scarce, particularly in addressing BIM-related and value-focused constraints for construction tender evaluation. This research introduces a comprehensive and value-focused method integrating BIM criteria through Multicriteria Decision Analysis (MCDA) supported by the Measuring Attractiveness by a Categorical Based Evaluation Technique (MACBETH), which is applicable to both the public and private sectors, serving as a reference guide for contracting authorities to assess and select the best tender for BIM-based construction works contracts. For this purpose, the following methodology was adopted: 1) conducting an extensive literature review; 2) carrying out interviews with construction experts to identify BIM-integrated evaluation criteria and performance descriptors; 3) creating an adapted MCDA construction tender evaluation framework supported by MACBETH; 4) performing a real-world case study to demonstrate the proposed evaluation framework; 5) discussing its application and limitations, along with considerations for future research. The study demonstrated the practicality of the proposed framework through a case study, showing that a value-based approach can significantly improve project outcomes compared to traditional methods. While acknowledging the potential of the BIM methodology, the impact of BIM-specific criteria on contractor selection was found to be less significant than expected. In conclusion, this work addresses current limitations, such as the absence of BIM-integrated assessment guidelines in the European Directive 2014/24/EU and ISO 19650. It outlines a value-focused MCDA approach for evaluating tenders for construction works contracts, supported by MACBETH for structuring the decision problem and building the evaluation model. The contribution to the body of knowledge lies in providing a robust framework that enhances the evaluation process in BIM-based construction works contracts and offers practical insights for contracting authorities.

Multicriteria selection practices in public tender evaluation process: the case of Sri Lanka

PurposeAwarding contracts based solely on the lowest price is unsuitable for every project. Consequently, most procurement systems in developed countries have progressed to the multicriteria selection practices (MSPs) for tender evaluation. MSPs consider a range of quality measures, such as completion time, life cycle cost, functional characteristics, environmental impact and innovation, alongside bid price. This study examines the prevailing MSPs in Sri Lankan public tender evaluations to enhance the effectiveness of the local tender evaluation process.Design/methodology/approachA desk study approach was employed to collect bidding documents, resulting in the identification of 66 documents. A systematic screening process was then applied to identify those bidding documents that incorporated MSPs. Subsequently, content analysis was conducted to determine the common features of the functions used in MSPs.FindingsThe study identified six primary functions related to MSPs incorporated in the bidding documents to procure building and substation projects. Three functions follow the price-to-quality method, while the remaining three follow the quality-to-price method. Among these identified functions, four functions employ objective evaluation criteria, such as thickness, capacity and operational loss. The other two functions utilize subjective evaluation criteria, such as the project’s design and technical specifications. Contract awarding will be based on either the highest score or the lowest bid, depending on the function type.Originality/valueThis study’s originality lies in exploring MSPs in the Sri Lankan public tender evaluation process and in disclosing their characteristics to promote the MSPs in Sri Lanka and developing countries.

Tender Evaluation Process and Operational Performance of Service State Corporations in Kenya.

Purpose: Service State corporations are incorporated entities outside the mainstream civil service established for purposes of public service delivery. Performance of the state agencies is constantly under public scrutiny, in part because much of the funding and equity in them flows directly from the tax base of the Country. However, public procurement process has not matched the expectation of stakeholders in terms of achieving value for money and budget execution. This study therefore, sought to determine the influence of tender evaluation process on operational performance of service state corporations in Kenya.
 Methodology: This study adopted a survey research design. The study focused on the audit, ICT and Procurement Managers respectively as respondents of the 132 service state corporations in Kenya. Stratified Sampling Design was employed since the study population is not homogenous. Data was collected using self-administered questionnaires. The data collected was analyzed using SSPS version 21. Data analysis was conducted using descriptive and inferential statistics by use of moderated multiple regression analysis.
 Findings: The findings of this study revealed that tender evaluation process had a significant and positive influence on operational performance of service state corporations in Kenya. The model result found out that the coefficient of determination was 0.424 implying that 42.4% of operational performance of service state corporations in Kenya is explained by tender evaluation process. The study concluded that tender evaluation process was critical in enhancing the performance of service state corporations in Kenya.
 Unique contribution to theory, practice and policy: The study recommended that, in order to achieve value for money and reduce on cost of acquisition, service state corporations must implement the e-tendering process and adopt a transparent ranking procedure during the Tender evaluation Process. This will discourage against the deliberate use of fake competition by favoring a particular bidder. In addition, procurement purchases should be based on the prevailing market trends and consider the total cost of ownership.

Development of e-tendering evaluation system for Nigerian public sector

Purpose The revolution brought about by the internet and the World Wide Web has led to the development of numerous e-Tendering systems for public sector tendering that have automated various aspects of the manual tendering processes that are known to experience numerous problems. However, one key area that has not been fully addressed is the automation of the evaluation of public tenders based on group decision-making. This paper presents part of the development of a Web-based e-tendering system called Nigerian Public Sector eTender (NPS-eTender) that automate the evaluation of public sector tenders based on group decision-making.Design/methodology/approach The system was developed using object-oriented methodologies. Specifically, Ripple and unified process methodologies were adopted.Findings The results of the system validation showed that NPS-eTender has an average rating of 74% with respect to correct and accurate modelling of the existing tendering domain and an average rating of 67.6% with respect to its potential to enhance the proficiency of public sector tendering in Nigeria. Based on the results of the validation, it can be concluded that the automation of the tender evaluation process can lead to a more proficient tendering process.Originality/value This research has contributed to the development of an e-Tendering system for the public sector that supports the whole tendering lifecycle including the automation of evaluation of public tenders based on group decision-making.

TENDER EVALUATION: MCDM TECHNIQUES

The decision of tender evaluation and allotment is one of the important step of any construction project. There has been a trend away in tender evaluation process from considering quantitative parameters ("lowest price win", "maximum benefit win") to other qualitative parameters (past performance, time of completion). This paper reviewed past and recent literature in order to identify the current tendering process and the various techniques that have been applied previously. The study utilized different MCDM techniques for evaluation of tendering process. Multi-criteria decision making research has become one of the main areas of research for dealing complex and critical decision problems. This paper outlines the use of various systematic decision making tool for the tender selection. Qualitative and quantitative criteria are compared, and the uncertainty associated with the selection of right contractor is highly reduced. By using a case study the tender evaluation is fully investigated applying various MCDM techniques. Results from the different methods are compared and fuzzy extend analysis, fuzzy TOPSIS showed slight difference in results from the other methods.

The transformation of the tender evaluation process in public procurement in Poland

Procedures regarding the evaluation of tenders have been changed since the public procurement law was enacted (it came into force in January 1, 1995). The contracting authority could apply both the criteria related to the qualities of the contractor and those related to the to the subject - matter of public contract. Two extensive amendments in 2001 and a government project introduced vital regulations and excluded the possibility of applying criteria related to the qualities of the contractor. Act of 29 January 2004 Public Procurement Law allowed to use price as the sole contract award criterion. The changes in the Law in 2014 restricted that possibility to the situation in which the subject matter of a contract is commonly available and has established quality standards. The Act of 22 June 2016 amending the Public Procurement Law Act and some other laws introduced the new criteria list and limited the importance of the price criterion in the certain situations. Instead of price, the cost can also be a criterion for tender evaluation. The cost criterion can be determined using life cycle costing. In the paper, based on contract notices of open tendering published in the Public Procurement Bulletin, the criteria of construction contract selection will be analysed. In particular the effectiveness of changes in the Procurement Law will be researched.

Predicting significant contract risks at the tender evaluation stage

This paper presents a mathematical model for predicting the significant potential contract risks at the tender evaluation stage for construction projects in the Republic of Trinidad and Tobago. The author demonstrates that statistical tools such as Monte Carlo simulation, linear/logistic regression and the programme evaluation and review technique can be used to predict correctly the significant potential contract risks, namely: price risk; schedule risk; quality risk; health, safety and welfare risk; and logistics risk. The author has incorporated these tools in the mathematical model in order to assess the total risk of each submitted tender in a tender evaluation process. The author is of the view that the tenderer with the lowest overall risk should be awarded the contract as compared to the historical method of awarding tenders – that is, use of the highest score. The analysis of 126 data sets is presented along with emerging trends and results.

An Intelligent Tender Evaluation System using Evidential Reasoning Approach

evaluation is a critical decision making process that has a great impact on the project performance, with regards to time, cost and quality. The selection of the appropriate tender can ensure a smooth finishing of a project and eliminate several problems during construction. In this paper, the evidential reasoning (ER) approach which is capable of processing both quantitative and qualitative data is applied as a means of addressing the tender evaluation process. The process of building a multiple criteria decision model of a hierarchical structure of a tender is presented, in which both quantitative and qualitative information is represented in a unified manner. At the light of a case study of Bangladesh the tender evaluation process is then fully investigated using the ER approach. The advantages of applying this model in practice and its analysis are discussed.

Prospect of using electronics to do economic analysis of contractors' bids

The tendering process is designed to select the most qualified contractor for a specified job, but the presence of human bias and selfish subjective selections in tender analysis has been perceived to lead to the selection of unqualified contractors in the Nigerian construction industry. This situation has given rise to the need to adopt electronic means that will help minimize the effect of human influence on a selection process. It is therefore the aim of this study, to evaluate the present state of e tendering in the Nigerian construction industry, with the objectives of identifying the mode of electronics in use for tender evaluations, accessing the extent to which these electronics have been used, investigating the constraints that has hampered the application/appreciation of electronics in tender evaluation and accessing the benefits inherent in the use of electronics in tender evaluations. In the method of the study, a questionnaire was drafted and distributed, comprising relevant questions that bordered on the respondent's personal character and response to research questions. Mean Response Value (MRV) method was used to analyze the data collected. From the analysis, it was discovered that in general, professionals involved in the bid/ tender evaluation process were aware of e tendering but did not practice it, and as such had no skills in it. It was also discovered that the greatest constraint to the use of electronics in tender evaluation in Nigeria was the IT illiteracy amongst contractors and amongst consultants. It is recommended that Government provide the enabling environment by taking the lead in adopting e tendering for all its pubic procurements as a continuously procuring entity. This will pave the way and stimulate the participation of the private sectors in e tendering. While professional bodies should live up to their responsibilities in ensuring its membership is carried along in modern practices through continuous professional development programmes.Key words: e-tendering, tender, analysis, IT, awareness, capacity, illiteracy, interoperability, web, portals.

Risk assessment as an explicit dimension for tender evaluation

Tendering plays a very important role in a project’s life cycle and the outcome of the tendering process will have a direct impact on the overall project cost. It should be clear that in evaluating tenders, it is not just the bid price that counts. The quality of the selected contractor will in many ways affect the success of the project; that is delivery on time, within budget and to the required quality. The selection of a ‘wrong’ contractor could easily lead to late completion or over expenditure. Unfortunately, uncertainties of events and unpredictability of their outcome do exist at the tendering stage, the effect of which could be costly in some circumstances. To manage the risks associated with such uncertainties, the introduction of risk assessment as an explicit dimension in the tender evaluation process is proposed. In this approach, decision makers will be made aware of high-risk elements upfront so that more informed decisions can be made. With more supportive information in a complex decision-making process, it is hoped that project risks and, in turn, costs can be lowered as far as practicable.

Evaluating the financial health of construction contractors

Economic slowdown and fierce competition in the construction industry in recent years has led many construction companies to pull out of projects due to deep financial and cash flow problems. As a result the risks of project failure in terms of time and cost overruns as well as poor quality products have increased. The reduction of such risks demands a closer examination of the financial soundness of candidate contractors before awarding a contract. This paper proposes a quantitative method using financial ratios to evaluate changes in the financial health of contractors and to enable a comparison of financial soundness during a tender evaluation process to be made. The concept of the entropy method was employed to calculate the objective weights of financial ratios and a multi-criteria decision-making method was used to produce overall performance scores of contractors. An empirical study of real company case data in Singapore was carried out to illustrate application of the method. The results show that the approach can be used to assist construction clients in assessing the financial capability of contractors.

Upgrading of Central Motorway Junction, Auckland

Central Motorway Junction, situated at the heart of New Zealand's largest city, Auckland, is currently undergoing major upgrading works to improve the operational efficiency and safety of the junction. This paper describes the preliminary studies and scheme development undertaken for this upgrading work. A description of the existing motorway junction, the problems inherent in the junction and the details of the preferred scheme for the upgrading works (developed into a ‘specimen design’ for construction procurement) is provided. The paper focuses upon the proposals for construction of the new viaduct structures required for the scheme. It also covers the tendering and tender evaluation process for the main contract, and describes the features of the submitted tenders.

Upgrading of Central Motorway Junction, Auckland

Central Motorway Junction, situated at the heart of New Zealand's largest city, Auckland, is currently undergoing major upgrading works to improve the operational efficiency and safety of the junction. This paper describes the preliminary studies and scheme development undertaken for this upgrading work. A description of the existing motorway junction, the problems inherent in the junction and the details of the preferred scheme for the upgrading works (developed into a ‘specimen design’ for construction procurement) is provided. The paper focuses upon the proposals for construction of the new viaduct structures required for the scheme. It also covers the tendering and tender evaluation process for the main contract, and describes the features of the submitted tenders.

The use of mixtures of market and experimental choice data in establishing guideline weights for evaluating competitive bids in a transport organisation

The government sector is increasingly using competitive bidding for service deliveries such as the provision of bus and rail services as well as the purchasing of professional engineering services such as project planning, design, and project supervision. As part of a program to simplify and introduce consistency in the tender evaluation process, one government transport agency in New Zealand financed a study to investigate the potential of combined revealed and stated preference methods as a way of establishing weights to attach to the criteria used to evaluate offers of engineering services. These techniques have mainly been used in the study of travel choices; yet they have a much broader appeal in studying the decision making process of organisations. In this paper we use a data-mixing model to capture the decision expertise of a transport organisation through the revelation of preference weights for each evaluation criterion. Using choice information based on both market-driven and experimentally derived choice sets, we should be able to increase the robustness of the evaluation weights in comparison to the weights obtained from single data-sourced models. The resulting parameterised tool can be used in subsequent tender evaluations to provide an additional source of advice to supplement or replace that provided by current members of a bid evaluation team.

Tender Evaluation by Fuzzy Sets

The process of evaluating tenders is considered to be largely dependent on subjective judgment when cost is not the only criterion used. A systematic procedure based on fuzzy set theory and multicriteria modeling is proposed for the selection of bid contracts. The proposed procedure is suitable for a general tender evaluation process that may involve many decision‐making parties and noninteractive multiple criteria. Illustrative examples are given for cases involving three major criteria: cost, present bid information, and past experience of tenderers.