Schöttle, A and Arroyo, P (2017) Comparison of weighting-rating-calculating, best value, and choosing by advantages for bidder selection. Journal of Construction Engineering and Management, 143(8): 05017015, ISSN 0733-9364
Abstract
Selecting the best bidder during a tendering procedure is key to project success. However, the methods used for decision making and their implications are not well understood. This study presents a theoretical and case-based comparison of three multicriteria decision-making (MCDM) methods - weighting-rating-calculating (WRC), best value selection (BVS), and choosing by advantages (CBA) - to illustrate the impact of these methods on the tendering procedure. The authors explain the benefits of using CBA and why it is superior to WRC and BVS for avoiding the speculative behavior of bidders. The results of the applied sensitivity analysis provide evidence that superior methods, such as CBA, do not mix cost and value, because generally the price significantly impacts the decision disregarding technical performance. Therefore assigning a weighted score to the submitted price (WRC) and dividing price by score (BVS) are risky because bidders may try to compensate for a poorly made technical proposal by proposing a low bid price. In comparison, CBA does not mix cost and value, provides a transparent and reproducible framework to support the tendering procedure, and overcomes speculative bidder behavior. Therefore the authors recommend that public owners study and apply CBA.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | best value selection; choosing by advantages; contracting; multicriteria decision-making; tendering procedure; weighting-rating-calculating |
| Index terms: | public owner, proposal, sensitivity analysis, decision-making, evidence, project success, bidder, best value |
| Subjects: | decision analysis, sociology, environmental hazards, project management theory and practice, project planning, bidding, evaluation and assessment methods |
| Topics: | Sustainability, Procurement, Risk Management, Stakeholder Management, Research Practice, Project Management |
| Descriptive scope: | 3 PCA |
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