Harvey, J (1979) Competitive bidding on Canadian public construction contracts: Stochastic analysis for optimization. PhD thesis, University of Western Ontario, Canada.
Abstract
This research study addresses the problems facing the Canadian construction contractor in setting bids for public contracts. Those problems are seen to evolve around the "definition of uncertainty" in competitive bidding. What is meant by "definition of uncertainty" in this context is the identification of the precise areas of uncertainty, the way these areas relate to each other in the determination of a win probability and a procedure to apprehend this uncertainty. The study's purpose with respect to the definition of uncertainty is twofold: a) to show that there are strong and stable associations between low bids, individual firm's bids and a number of variables which are known before the bidding decision, b) to show that those associations can be gainfully incorporated in a contractor's bidding decisions. To verify the existence and stability of those patterns and associations, a wealth of bidding data on Canadian public construction contracts was gathered and analysed. To establish the possibility of profitably incorporating the resulting definition of uncertainty in bidding strategies, a deterministic simulation model was built. This simulation allowed "a posteriori" comparison of the performance of a number of bidding strategies, some of which were based on a multivariate assessment of the uncertainty. The study shows that it generally pays to incorporate the detailed circumstances of a job and the apparent bidding patterns of each competitor in the definition of the uncertainty in competitive bidding.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Uncontrolled Keywords: | competitive bidding; optimization; uncertainty; bidding; construction contractor; probability; stochastic analysis; simulation |
| Index terms: | public construction, strategy, stability, competitive bidding, stochastic analysis, bidding, construction contractor |
| Subjects: | practitioner, mathematical modelling, bidding, structural engineering, management, building construction |
| Topics: | Procurement, Roles and Professions, Research Practice, Engineering Principles, Business Strategy |
| Descriptive scope: | 3 PCA |
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