Selinger, S (1983) Payment timing as a factor in bid evaluation. Journal of Construction Engineering and Management, 109(3), pp. 335-341. ISSN 0733-9364
Abstract
While the timing of payments to the contractor, in the course of the construction process, is an important factor in the project cost, it is not referred to either by the bid-comparison procedures or by the contract terms, in almost all kinds of contracts used in construction projects. An attempt is made here to overcome the consequent disadvantages to the owner, by means of a procedure based on an obligatory schedule whose activities are appropriately related to the items of the bill of quantities, the whole set-up forming an integral part of the bid and of the final contract. This enables the owner to prepare cash-flow estimates for the bids, compare them according to the present value of all expected payments, and select the bid with minimum cost. Apart from this, the procedure neutralizes bid imbalances (regarding unit prices and the production schedule) and facilitates deferment of non-critical activities, thereby reducing financial cost. The cash-flow estimate of the winning bid serves as a basis for the owner’s budget planning, with much higher accuracy in this function. The suggested procedure is adapted also for comparison of bids in which construction duration is determined by the bidder within a given interval.
| Item Type: | Article |
|---|---|
| Index terms: | bidder, bills of quantities, construction process, construction project, contract term, accuracy, duration, estimate, bid evaluation, project cost, owner |
| Subjects: | sociology, financial and cost management, bidding, tendering, professional development, economics, production management, contractual condition, building construction, project controls |
| Topics: | Cost Management, Site Management, Project Management, Contract Administration, Stakeholder Management, Time Control, Procurement, Information Management |
| Descriptive scope: | 2 PC |
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