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In the construction industry, competitive bidding is used for various procurement routes available for satisfying clients' construction needs. These include traditional procurement via design-bid-construct, and the nontraditional ones such as the design-and-build, management contract, and build-own-operate-transfer. Though, it should be noted that contractors do not always bid for every job that comes along but select from a continually changing array of potential projects. Therefore, competitive bidding in construction is concerned with contractors making strategic decisions regarding project selection whether or not to bid for a job and determine bid price if contractors opt to bid.

It has been found in many studies that there are differences in the ranking of factors that contractors consider when making bid/no-bid and mark-up decisions. This suggests that contractors' bidding decisions are dependent on many individual firm-specific characteristics, including some that are unobserved, i.e., the notion of heterogeneity across contractors. Gonzalez- Diaz et al. suggest that one may think of the unobserved heterogeneity as the management style of a construction firm, which may include its manager's capability, the quality of its output, and its competitive strategy.

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COMPETITORANALYSIS IN CONSTRUCTION BIDDING Background on the article In the construction industry, competitive bidding is used for various...
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