Framework to Facilitate Bid/No Bid Decision Making of the Contracting Organisations in Sri Lanka

Abstract

The process of bidders submitting offers for the completion of construction projects is known as construction bidding. Contractors frequently acquire projects through competitive bidding, and the decision to bid or not to bid is a critical step in that process. Errors in this decision-making process will ultimately result in huge losses for contractors. Many theoretical models have been established across the world to aid in the bid/no-bid decision-making process. However, researchers have identified that those models cannot be directly applied to construction projects due to their complexity. The majority of these models are merely academic exercises that are less useful in real-life circumstances. On the other hand, Sri Lankan contractors have less exposure to these models and more commonly commit malpractice when taking bid/no-bid decisions, which can have significant impacts on the contractor. This research was carried out to address these gaps where the main research aim was to offer a hierarchical framework for facilitating bid/no-bid decision-making of Sri Lankan contractors. The research adopted a qualitative research approach, where data was collected through semi-structured interviews. Consequently, code-based content analysis was used with the aid of the QSR NVivo software to capture significant findings. The research revealed three different bid/no-bid decision-making processes that are currently used in Sri Lanka. Furthermore, the drawbacks of each existing approach were compared and contrasted. Subjectivity, forces from the upper levels, and documentation errors have been identified as common drawbacks inherent in all three approaches. It is further evident that maintaining a database, contacting relevant parties to take the decision, and doing material and competitor analysis will be beneficial for contractors to enhance bid/ no-bid decision making.  The most popular and least specious approach among identified approaches was used as the basis to propose the new hierarchical framework.

Keywords: Bid/No Bid Decision, Decision-Making Approaches, Hierarchical Framework