Factors influencing bid/no bid decision of foreign contractors in Tanzania

Construction sector is an investment-led sector hence revolve around how to best allocate capital to maximize the returns. Bidding decision is critical to both foreign and local contractors and cannot be undertaken through perception or feeling, rather the bidder has to go through several decision making process involving the consideration of both internal and external factors. Submitting a lot of non-winning bids in response to request for tender is costly and also can damage contractors' reputation. Therefore, the purpose of this study is to investigate the factors influencing the bid no bid decision of foreign contractors in Tanzania. A quantitative approach using survey-based questionnaire was used to collect data. The sample was purposely selected whereby a total of 25 responses from foreign contractors were obtained and analyzed using descriptive statistics. The study revealed that “Financial capability of the client”, “Terms of payment”, “Client payment history” “Project type” and “Project size”, were the most top 5 significant factors identified by the foreign contractors. The results of this study will foster a better understanding of the factors influencing bid no bid decision of foreign contractors in Tanzania and also increase the awareness of existing decision-making practices and play a critical role in the future decisions of the construction companies, where foreign bidders need to evaluate the next opportunities encountered. Moreover, awareness of these identified “bid/no bid” factors would enable foreign contractors to select projects with greater likelihood of success in the future, which result in financial benefits and higher performance. Lastly, the consciousness of these factors might contribute to improving the contractor’s behaviours when bidding in a competitive market.