Hyari, K H and Alamayreh, T (2023) Unbalanced bidding in construction projects: A contractors' perspective. International Journal of Construction Management, 23(12), pp. 2058-2066. ISSN 1562-3599
Abstract
Published research on unbalanced bidding either shows the owners' perspective or intends to represent the contractors' views through theoretical models. This paper aims to reflect the contractors' perspective on this topic through an empirical approach. 86 interviews with experienced contractors in the Jordanian construction field were held and their standpoints on unbalanced bidding were obtained and analyzed. The analysis reveals that front end loading and quantity error exploitation are the most widely used forms of unbalanced bidding. The main motives for adopting unbalanced pricing are found to be; increasing chances of winning bids; improving project’s profitability; and minimizing financing costs of projects. The surveyed contractors showed deep understanding of the risks associated with this practice on both the contractor and owner alike to the extent that the majority thereof surprisingly asked for explicit prohibition on this practice in bidding regulations. The paper provides some practical recommendations to that aim at limiting this practice. The outcomes of the paper should prove to be useful to owners in shaping policies regarding unbalanced pricing in bidding documents as well as understanding contractors' motives to this practice. Although the survey was conducted in Jordan, the results obtained is expected to have much wider applicability, and recommendations obtained can be useful in many other countries.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | bid evaluation; competitive bidding; contractors; contracts; pricing; skewed pricing; unbalanced |
| Index terms: | survey, bidding, unbalanced bidding, interview, competitive bidding, profitability, owner, documents, loading, pricing, Jordan, regulation, construction project, bid evaluation, financing, motive, exploitation |
| Subjects: | production management, economic analysis, management, professional development, data collection methods, Geography, bidding, political science, tendering, sociology, construction operations, psychology |
| Topics: | Research Practice, Stakeholder Management, Information Management, Project Management, Procurement, Human Resources, Governance, Site Management, Geographical Context, Business Strategy |
| Descriptive scope: | 3 PCE |
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