Kissi, E; Adjei-Kumi, T; Badu, E and Boateng, E B (2017) Factors affecting tender price in the Ghanaian construction industry. Journal of Financial Management of Property and Construction, 22(3), pp. 252-268. ISSN 1366-4387
Abstract
Purpose Tender price remains an imperative parameter for clients in deciding whether to invest in a construction project, and it serves as a basis for tender price index (TPI) manipulations. This paper aims to examine the factors affecting tender price in the construction industry. Design/methodology/approach Based on the literature review, nine independent constructs and one dependent construct relating to tender pricing were identified. A structured questionnaire survey was conducted among quantity surveyors in Ghana. Partial least squares structural equation modelling (PLS-SEM) examined the influences of various constructs on tender price development (TPD) and the relationships among TPD and TPI. Findings Results showed that cultural attributes, client attributes, contractor attributes; contract procedures and procurement methods; consultant and design team; external factors and market conditions; project attributes; sustainable and technological attributes; and TPI have a positive influence on tender price, whereas fraudulent attributes exert a negative influence. Practical implications The findings offer construction professionals broader understanding of factors that affect tender pricing. The results may be used in professional decision-making in the pricing of construction projects, as they offer clearer causal relations between how each construct will influence pricing. Originality/value This study adds to the body of construction pricing knowledge by establishing the relationships and degree of influences of various factors on tender price. These findings provide a valuable reference for practitioners.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Construction industry; Structural equation modelling; Ghanaian; Partial least square; Tender price |
| Index terms: | questionnaire, practitioner, construction project, decision-making, methodology, tender price index, partial least square, survey, structural equation modelling, design team, tender price, literature review, market condition, construction professional, construction industry, pricing, quantity surveying, procurement method, Ghana |
| Subjects: | decision analysis, industry analysis, statistical analysis, quantity surveying, research methods, tendering, production management, Geography, professional development, professional practice, contractual arrangements, data analysis and analytics, economic analysis, data collection methods, profession, economic and policy analysis, practitioner |
| Topics: | Procurement, Risk Management, Roles and Professions, Research Practice, Geographical Context, Project Management, Information Management, Business Strategy, Design Practice |
| Descriptive scope: | 5 PCTEA |
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