Sturts, C S and Griffis, F H (2005) Addressing pricing: Value bidding for engineers and consultants. Journal of Construction Engineering and Management, 131(6), pp. 621-630. ISSN 0733-9364
Abstract
This paper presents a unique treatment of competitive bidding theory as applied to pricing engineering services. Unlike low-bid procurement, the selection of engineers and design consultants is often based on several factors such as quality, availability, reputation, resume, and references, and these criteria may or may not include price. From preliminary interviews, the authors conclude that there is a need for a systematic method of evaluating potential job opportunities and determining fair market prices. This hybrid model, Value-Bidding, refocuses the competitive bidding model from a fee-based selection criteria to a value-based selection criteria. Value-Bidding utilizes an established marketing research methodology, conjoint analysis, to establish the probability of winning based on multiple factors. The resulting analytical model enables engineers to analyze market conditions, evaluate client priorities, systematically track competitors, and optimize proposals, while maximizing the probability of winning, maximizing profit, and optimizing price.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | bids; business administration; consulting services; engineering services; market research; pricing; professional role |
| Index terms: | research methodology, marketing, selection criteria, business administration, pricing, engineer, analytical model, bidding, market research, interview, proposal, competitive bidding, market condition, profit |
| Subjects: | theoretical framing, tendering, market analysis, economic and policy analysis, profession, data collection methods, research design and methodology, business, project planning, bidding, economic analysis |
| Topics: | Procurement, Roles and Professions, Research Practice, Project Management, Business Strategy |
| Descriptive scope: | 4 PCTE |
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