• Architectural research
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• v.13 no.3
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• pp.49-56
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• 2011

Competitive bidding in construction is concerned with contractors making strategic decisions in respect of determination of bid price if contractors opt to bid. This study presents a strategy model for deciding optimum tender price with reflecting appropriate profit in competitive bidding using Bayesian regression analysis (BRA). The purpose of the developed model is to help contractors to secure suitable profitability by predicting the actual profit based on key variables. They may affect construction cost at bidding phase, ultimately which help contractors to secure high quality output. The model was tested empirically by application to a bidding dataset collected from a large South Korea contractor. BRA allows contractors to estimate more accurate actual profit by reflecting not only objective information but also subjective experiences and judgments. Consequently, the model can contribute to improvement of decision-making process for setting an optimum tender price.

• The Journal of Korean Institute of Communications and Information Sciences
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• v.33 no.11B
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• pp.1013-1019
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• 2008

Recently, various information and data are efficiently used by the rapid growth of its Internet in our real life. But, users have spent lots of time finding necessary information for the increased amounts of information. To solve this problem, it can be provided the speed, accuracy of information search with development of intelligent search engines, agent system etc. In this paper, we propose the method of getting the best tender price in the analysis of the construction bid information that needs its professionalism by on the purpose to maximize users' satisfaction. Of course, if it is not under the unit of a results in the future, we put target of this paper on part to heighten supreme successful bid success rate. Therefore, this paper embodies offered system of web based on producing tender price of most suitable through techniques to produce tender price about successful bid that compare with bidder fare by statistical analysis incidental and value approaching successful bidder fare by frequency analysis method.

• International conference on construction engineering and project management
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• 2011.02a
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• pp.241-248
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• 2011

Past theories on construction price formation have been shown to be inadequate in terms of their ability to represent real-life industry practice and price formation predictability. In this paper, we develop a theoretical framework on construction price formation that integrates four theories within the domains of marketing, learning, resource management and economics. These are: (i) marketing pricing theory; (ii) experiential and organisational learning theory; (iii) resourced based theory and (iv) microeconomic theory. Utilising pricing theory from marketing, a foundation is able to be created for the procedure of construction price formation, namely: (i) identifying the objectives; (ii) assessing the tendering environment; and (iii) formation of the price. However, understanding contractors' decision making process in tender pricing as such can be attributed to theories of experiential learning and consequently organisational learning. It is argued that contractors do learn from past experience and history and are able to adapt to different market conditions. In formation of the price, neoclassical microeconomics is able to provide additional insight in terms of the supply and demand model and consideration of the market conditions. Interrelated with the microeconomic concept of scarcity, we appreciate that contractors do have limited resources that affect their tender pricing decisions and resource based theory is used to substantiate this. Integrating the various theories as a unity allows the broader reality to be visualised and add to our theoretical understanding of construction price formation.

• Proceedings of the Korean Institute of Building Construction Conference
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• 2015.05a
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• pp.140-141
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• 2015

Although the depression of oversea construction market becomes more serious recent years, asian construction market is relatively dynamic, particularly in china. However, few research has been conducted about how to manage construction projects in china as foreign developers. Four important risks are identified from series of surveys using the WBS-RBS method, the result shows that the main risk of tender stage is 'Tender max price error', ' Bill of quantities error', 'Unusual low price' and 'Moral risk' respectively.

• Korean Journal of Construction Engineering and Management
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• v.19 no.1
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• pp.74-79
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• 2018

The establishment of an effective bidding system is critical to ensure both the high quality of civil infrastructure and proper earning of contractors. However, the continuous changes of a bidding system in South Korea reveal that problems such as a dumping or high price winning have not been fully resolved yet. This study thus aims at understanding the bidding behavior and strategies of contractors by analyzing a tender ratio in historical data. Multiple regression analysis is conducted to understand the effect of internal and external factors (e.g., estimated cost, combined value of construction performance evaluation) on a tender ratio. The results statistically show that such factors affect the tender ratio an individual bidder determines and have the varying effect on the tender ratio by contractors' firm size.

• International conference on construction engineering and project management
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• 2007.03a
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• pp.289-298
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• 2007

The development of construction industry has led to the increase in the number of criteria imposed by project clients for selecting contractors. For example, clients often request tenderers to satisfy various conditions such as tight programme, financial strength, managerial ability, relevant work experiences, technical strength, high workmanship standard, safety requirement, quality specification, and yet others. This trend has attracted research interests of devising various methods for helping project clients to assess contractors' bids. For example, in recent development, the Works Bureau of the Hong Kong Government has introduced two mechanisms in tender evaluation for various public work contracts, namely, the Marking Scheme effective from June 2002 and the Formula Approach effective from November 2002 [1], [2]. These approaches evaluate a contractor's tender by considering collectively its tender price and performance attributes, the latter including contractor experience, past performance, technical resources and technical content of his proposal. The tender with the highest combined price and performance score (CPPS) will be normally recommended for acceptance. It appears, however, that there is little existing research in helping contractors to identify a competition strategy that enables the contractor to offer his most competitive bid collectively taking into account his resource capacities and project client's multiple performance criteria. This paper examines the factors affecting contractor's competition strategy to compete for works in Hong Kong. The understanding about the factors will contribute to identifying effective competition strategy. The data used for the analysis were collected from Hong Kong construction industry. The research findings may provide valuable references for investigating effective competition strategies in other construction industries outside the region.

• Journal of Construction Engineering and Project Management
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• v.8 no.2
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• pp.17-33
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• 2018

This study investigates the stability of professionals' cost variability factor-rankings across different levels of cost-variability and response scenarios. Descriptive statistics are used to examine the stability of factor-ranking for 20 cost variability factors and a Multinomial Logistic (MNL) regression model was implemented to examine the stability of cost variability factors across three cost variability levels. The finding on the descriptive statistics indicated that professionals' factors-rankings are stable only for external factors. The MNL regression results on factor-stability suggested that 8 out of the 20 evaluated factors were unstable determinant of lower cost variability levels. These factors are "risk associated with the project", "personal bias and poor professionalism of the estimators", "limited time available to complete the project", "lack of skills and experience by estimator" "geographical location of projects", "incomplete & rush designs for estimate", "unforeseen or unexpected site constraints", "high class bidders for the contractors". Similarly lack of experience and large size projects were observed to be unstable as well. These observations suggest that professionals' view on pre-tender cost variability factor-ranking yields unstable factor rankings hence should not be relied upon as the only mechanisms to mitigate cost related risks in construction projects.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.31 no.5D
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• pp.719-726
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• 2011

The government intensifies screening criteria for the guarantee of reasonable bidding price and the prevention of low bidding price, however, the low tender rate still becomes an issue. This study analyzed the problems of screening criteria for the guarantee of reasonable bidding price, and then derived some major issues such as the restriction of decisive factors for initial construction cost, the rate of activities over five percent of surveyed price and the restrictive review criteria of inadequate activities. To solve thess problems, this study suggests an improved process model for estimating optimal bidding rate that can select a contractor with the guarantee of reasonable bidding price.

• Proceedings of the Korean Institute of Building Construction Conference
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• 2014.05a
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• pp.46-47
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• 2014

Recently, BAI(Board of Audit and Inspection of Korea) has recommended that "Result unit cost" of Korean government apply to national power plant construction project when plant owner corporations estimate budget price for tender. but nuclear industry have difficulties with this suggestion. the purpose of this study is to review the "Result unit cost" and problem with application of NPP construction cost estimating. And proposed the direction of application of "Result unit cost" to NPP construction cost estimating.

• Proceedings of the Korean Operations and Management Science Society Conference
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• 2005.05a
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• pp.904-913
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• 2005

This paper deals with an integrated problem of inventory control and dynamic pricing strategies for a commodity with price and sales-period dependent demand pattern, where a seller and customers have complete information of each other. The problem consists of two parts; one is each buyer's benefit problem which makes the best decision on price and time for buyer to purchase items, and the other one is a seller's profit problem which decides an optimal sales strategy concerned with inventory control and discount schedule. The seller's profit function consists of sales revenue and inventory holding cost functions. The two parts are closely related into each other with some related variables, so that any existing general solution methods can not be applied. Therefore, a simplified model with single seller and two customers in considered first, where demand for multiple units is allowed to each customer within a time limit. Therewith, the model is generalized for a n-customer-classes problem. To solve the proposed n-customer-set problem, a dynamic programming algorithm is derived. In the proposed dynamic programming algorithm, an intermediate profit function is used, which is computed in case of a fixed initial inventory level and then adjusted in searching for an optimal inventory level. This leads to an optimal sales strategy for a seller, which can derive an optimal decision on both an initial inventory level and a discount schedule, in $O(n^2)$ time. This result can be used for some extended problems with a small customer set and a short selling period, including sales strategy for department stores, Dutch auction for items with heavy holding cost, open tender of materials, quantity-limited sales, and cooperative buying in the on/off markets.