Decision to tender
To bid or not to bid? Samanthi Menike is helping building companies answer that question.
There is a lot of time and effort involved in submitting a bid for a construction job. Somehow the cost of bidding needs to be balanced with the likelihood of being the successful bidder. Samanthi Menike, at Southern Institute of Technology, has investigated what bidding strategies might be useful, to improve the success rate for the investment of time in preparing the bid for the work.
A comprehensive literature review suggests that it is important to make a careful detailed study of factors before making the decision to bid. Consideration of how to approach detailed analysis of quantities, contractual matters, and technical aspects is also useful prior to bidding, as well as making decisions about mark-up adjudication and possible construction management if the bid is won.
Samanthi Menike also carried out a case study with a tier one main contractor over one year, to determine the number of bids made, how successful they were, and the cost of preparing the bid. Bids were analysed for their technical, contractual, and financial risks to determine which factors to consider when bidding on future projects. The project goal was to establish criteria for the decision to tender for building projects that head contractors can apply, in line with bidding practices within the construction industry.
Samanthi concludes that a guided questionnaire would be a useful tool to identify key project information. Technical points to consider would be: abnormalities in the construction site; unavailability of materials; exceptional preliminary items; unrealistic time for completion; unworkable specifications/ buildability issues; items with which the company has no previous experience; and requirement of new technologies. The terms of contract should also be reviewed: what is the standard form of contract; whether a Schedule of Quantities is available; whether fluctuations are allowed; bid bond amount; liquidated damages per day; and insurance requirements.
With this tool, contractors can efficiently gather information related to tender decisions, enabling the head of the department to make an informed decision, and contractors to manage bidding workload, project resources, and task allocation to pre-contract department staff.