Shiue, F J; Lee, H Y; Zheng, M C; Khitam, A F K and Assefa, S (2021) An estimation model of construction project segmentation for optimum project pricing. Engineering, Construction and Architectural Management, 28(9), pp. 2361-2380. ISSN 0969-9988
Abstract
Purpose: For large projects, project segmentation and planning the size of contract packages in construction bids is a complex and critical issue. Due to the nature of construction projects, which frequently have large budgets, long durations and many activities with complex procedures, project segmentation involves complicated decision-making. To fill this gap, this study aims to develop an integrated model for planning project segmentation. Design/methodology/approach: The proposed model integrates a simulation and multiple attribute decision-making method. The simulation is used to evaluate the bidding outcome of various project segmentations. The owner can then determine the bid-price behavior of contractors in response to varying work package sizes. The multiple attribute decision-making method is used to select the optimal segmentation solution from the simulated scenarios. Findings: The proposed model is applied to a large road preservation project in Indonesia and incorporates bid participants and market conditions. The model provides seven scenarios for segmentation. The range of scenarios captures increasing competitiveness in the construction with the average bid price becoming gradually more beneficial for the owner. The model also utilizes a multiple attribute decision-making method to select the optimum scenario for the owner. Originality/value: This study presents an applicable model for project segmentation that is useful for both project owners and contractors. By utilizing the proposed model, a project owner can segment a large project into smaller contract packages to create improved project pricing.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | multiple attribute decision-making; project management; simulation |
| Index terms: | becoming, pricing, package, critical issue, integrated model, Indonesia, estimation, owner, competitiveness, project management, duration, market condition, construction project, decision-making, methodology, bidding |
| Subjects: | market analysis, project controls, decision analysis, sociology, philosophical process, research methods, production management, Geography, project management theory and practice, bidding, contractual arrangements, analytical methods, financial and cost management, economic analysis, risk assessment, economic and policy analysis |
| Topics: | Time Control, Risk Management, Stakeholder Management, Procurement, Business Strategy, Cost Management, Research Practice, Geographical Context, Project Management, Information Management |
| Descriptive scope: | 3 PCT |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here