Oo, B L; Lo, H P and Lim, B T H (2012) The effect of bidding success in construction bidding. Engineering, Construction and Architectural Management, 19(1), pp. 25-39. ISSN 0969-9988
Abstract
Purpose - Winning a bid will carry implications for capacity level of a construction firm. This paper aims to examine the impact of a winning bid on contractors' bid pricing strategies. Design/methodology/approach - In identifying the specific types of bidding trends before and after a winning bid, the variations in bids are expressed as a function of time relative to winning bid - the "event" of interest in this study - using a piecewise mixed effects model. The bids analysed comprised series of bids with a winning bid in between, recorded from Hong Kong building contractors. Findings - The results show that there is a relationship between bid price and bidding success. The bidders in general bid low for time periods before a winning bid and they are less competitive in time periods after a winning bid. However, by considering the individual bidders' characteristics that relate to differences in bidding competitiveness, it is shown that there is remarkable heterogeneity among the bidders in bid pricing decision for pre- and post-winning periods. Nevertheless, the statistically significant bidding trends before and after a winning bid strengthen the notion that systematic changes in bidding behaviour over time do occur in reality in response to changes in firm capacity level. Originality/value - This empirical investigation provides strong evidence on the systematic changes in bidding behaviour over time in response to changes in firm capacity level, supporting the need to incorporate firm capacity level in the future development of a suitable theoretical framework on construction bidding.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | bidding trend; companies; construction industry; firm capacity; tendering; winning bid |
| Index terms: | investigation, competitiveness, bidder, construction industry, building contractor, pricing, Hong Kong, evidence, methodology, variation, bidding, construction firm, strategy |
| Subjects: | practitioner, organization, evaluation and assessment methods, data collection methods, economic analysis, bidding, Geography, contractual condition, research methods, management, industry analysis, market analysis |
| Topics: | Contract Administration, Roles and Professions, Procurement, Business Strategy, Research Practice, Geographical Context |
| 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