Factors affecting the bid or no bid decision in the Saudi Arabian construction contractors

Factors affecting the bid or no bid decision in the Saudi Arabian construction contractors

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Factors affecting the bid/no bid decision in the Saudi Arabian construction contractors ABDULRAHMAN SALEM BAGEIS 1 * and CHRIS FORTUNE 2 1 School of the Built Environment, Heriot-Watt University, Edinburgh EH14 4AS, UK 2 School of the Built Environment, University of Salford, Salford M5 4WT, UK Received 10 December 2007; accepted 28 October 2008 The bid/no bid decision requires an understanding of a company’s assessment in relation to factors affecting the decision. Different companies might have different assessment values. The aim is to investigate how bid/no bid decisions are influenced by different characteristics of contractors. Various factors are identified and then analysed in order to investigate their influence and relative significance. A questionnaire survey was used to identify and rank the factors affecting the bidding decision and then analyse them in terms of differences between the returned responses with respect to the differing respondent characteristics. The findings have established the ranking order of the factors affecting the bid/no bid decision and identified their weights of importance. In addition, the influence of these characteristics upon the different weights of importance given by the survey respondents is found to be statistically significant. The most influential characteristics that affected their assessment of the weight of importance are contractor size, classification status of the contractor and the main client type. Different contractors’ characteristics should be reflected in the way that the bid/no bid decisions are modelled. Also, the data collected should be categorized with regards to contractors’ characteristics before starting the data analysis and modelling processes. Keywords: Bid/no bid decision, decision making, project selection. Introduction One of the main features of the Saudi Arabian (SA) construction industry is the existence of a contractor’s classification certificate. Obtaining a classification certificate is one of the principal requirements of a contractor bidding for government projects, as it is stipulated as being necessary in the reports of the Ministry of Municipal and Rural Affairs (2008). One of the aims of the contractor classification system is to help contractors to bid for projects that are appro- priate to them. In fact, selecting the right project to bid for is a principal feature of business success. The bid decision is crucial, in this context, to allow contractors to evaluate their proposed projects or their invitations to bid before accepting them and committing themselves to the bid-preparation pro- cesses. Researchers have been concerned with the problems of bidding strategy since the time of Friedman (1956) to explore the bidding decisions and to establish methods by which the bidding decisions can be modelled. As a result of such research, six bid/no bid models were developed by Ahmad (1990), Abdelrazig (1995), Wanous et al.
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This note was uploaded on 05/06/2011 for the course BANKING 254 taught by Professor Kumar during the Spring '11 term at Birla Institute of Technology & Science, Pilani - Hyderabad.

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Factors affecting the bid or no bid decision in the Saudi Arabian construction contractors

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