Factors influencing bid prices in construction

Abstract

ABSTRACT

Offering a proper bid price to win a contract of construction projects requires the adequate capacity, the reasonable construction methods, and suitable strategies of bidders. Though it plays an important role and gets the attention of project
managers, problems that appear during tender pricing affect the bidding results. The study aimed to determine the determinants influencing the bid price of construction projects in Ho Chi Minh City. The research was conducted based on the viewpoints of contractors, project management consultants, investors and design consultants who had experiences in different types of projects. Data were collected from 206 valid surveys, the factors were then ranked based on the Relative Importance Index (RII) method and conducted with Exploring Factor Analysis (EFA). 27 variables were allocated in five groups of factors that affect the bid price in construction named: 1) capacity – experience; 2) characteristics of the bidding package; 3) external factors; 4) cost; 5) finance. The research outcomes confirmed the factors influencing the bid price, which help the bidders gain a general perspective, and apply relevant solutions to improve the efficiency of bidding preparation and winning.

Key words: Bid price; influential factors; construction industry; relative importance index (RII); exploring factor analysis (EFA)