Li, S (2006) Three essays on bidding in the construction industry. PhD thesis, University of Utah, USA.
Abstract
These three essays examine aspects of contractor bidding in construction. The first paper, "Timing and Bundling Projects to Offset the Limitations on the Number of Bidders Created by Contractor Prequalification on Public Works," examines the effect of increased numbers of competitors in an auction on the dispersion between the lowest and the second lowest bid. This paper informs the discussion around reforming public procurement policies by moving away from an open bidding process towards a filtered auction where general contractors are prequalified in order to bid. While prequalification may have the benefit of reducing the prospect of performance problems on projects, it necessarily reduces the number of bidders on a project. The second paper, "Aggressive Entrant Bidding in Construction: An Artifact of Greater Entrant Uncertainty Regarding the True Cost of Construction," using Ordinary Least Squares (OLS) and quantile regression models examines the previously discovered phenomenon of aggressive bidding on the part of entrant contractors with a sample of subcontractors. This paper finds aggressive bidding behavior of entrants to be an artifact of greater entrant uncertainty regarding the true cost of construction. A wider dispersion of entrant bids at both ends of the bid distribution effectively results in relatively aggressive entrant tenders at the low end (i.e., the operative end) of bids. The third paper, "New Firms' Bidding Behavior and Survival: Evidence from Auctions of Utah Construction Industry," examines an aphorism heard from a mason contractor who had been in business for more than 30 years in Utah. Using a survival model applied to 35 years of panel data on subcontractor bidding in construction, this paper examines the role of aggressive bidding on the survival prospects of firms. The paper finds some evidence to support the notion that long-lived contractors do not stray far from the mean of auction bids. Because researchers have not previously had available to them panel data of this length, this paper is the first contribution to the study of the relationship between bidding behavior and the longevity of construction firms.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Thesis advisor: | Philips, P |
| Uncontrolled Keywords: | uncertainty; bidding; prequalification; mason; subcontractor; regression model |
| Index terms: | regression model, mason, public work, construction industry, survival, operative, procurement policy, number of bidders, general contractor, artifact, construction firm, bundling, evidence, bidding, subcontractor |
| Subjects: | infrastructure engineering, statistical analysis, industry analysis, sociology, practitioner, organization, evaluation and assessment methods, financial and cost management, environmental science, bidding, public policy |
| Topics: | Research Practice, Cost Management, Business Strategy, Governance, Roles and Professions, Engineering Principles, Procurement, Sustainability |
| Descriptive scope: | 4 PCTA |
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