Balanced approach for tendering practice at the pre-contract stage: the UK practitioner’s perspective
Abstract
Tender documents often lack clarity and are incomplete, making it difficult for contractors to appropriately price projects. A general view is that the quality of tender documents has declined, which has affected the bidding strategies of contractors. However, the academic literature has focused mainly upon the views of contractors. To obtain a more balanced view of tendering practices, in-depth interviews were conducted with 10 practitioners (client, consultant, and contractor) who are involved in a common project at the same time in the UK construction industry. The contractor was satisfied that the quality of tender documents had been consistent. By contrast, both the client and the consultant agreed that the quality of tender documents is an ongoing issue. During the study it was revealed that tendering practice is influenced by the relationship between stakeholders or the unbalanced access to information rather than the accuracy and analysis of tender documentations. Tendering practices and proposed efficient ways of improving the bidding environment were examined. Using the awareness of other project stakeholder’s perspectives, this study can help the contractor to establish suitable tendering practices, and to mitigate tender risk at the bidding stage, which could effectively be implemented in the UK construction industry.
Keyword : risk management, tender document, tendering practice, bidding
How to Cite
Whang, S.-W., Donyavi, S., Flanagan, R., & Kim, S. (2022). Balanced approach for tendering practice at the pre-contract stage: the UK practitioner’s perspective. Journal of Civil Engineering and Management, 28(5), 338–348. https://doi.org/10.3846/jcem.2022.16580
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Al-Reshaid, K., & Kartam, N. (2005). Design–build pre-qualification and tendering approach for public projects. International Journal of Project Management, 23(4), 309–320. https://doi.org/10.1016/j.ijproman.2004.11.004
Arabiat, A., Edum-Fotwe, F. T., & McCaffer, R. (2007). Does client behaviour actively induce risk in construction projects? In Proceedings of the 23rd Annual ARCOM Conference (pp. 745–754), Association of Researchers in Construction Management, Belfast, NI.
Asenahabi, B. M., Busula, A. O., & Ronoh, R. (2019). A choice dilemma in the selection of an appropriate research design. International Journal of Advanced Research in Computer Engineering & Technology (IJARCET), 8(8), 348–356.
Asgari, S., Kandil, A., & Odeh, I. (2016). Optimal risk attitude for construction contractors in competitive bidding environments. In Construction Research Congress (pp. 2474–2480). https://doi.org/10.1061/9780784479827.246
Bagies, A., & Fortune, C. (2006). Bid/ no-bid decision modelling for construction projects. In Proceedings of the 22nd Annual ARCOM Conference (pp. 511–521), Birmingham, UK. Association of Researchers in Construction Management.
Benítez-Ávila, C., Hartmann, A., Dewulf, G., & Henseler, J. (2018). Interplay of relational and contractual governance in public-private partnerships: The mediating role of relational norms, trust and partners’ contribution. International Journal of Project Management, 36(3), 429–443. https://doi.org/10.1016/j.ijproman.2017.12.005
Bochenek, J. (2014). The contractor selection criteria in open and restricted procedures in public sector in selected EU countries. Procedia Engineering, 85, 69–74. https://doi.org/10.1016/j.proeng.2014.10.530
Bohari, A. A. M., Ikau, R. A., Budin, H., Hadi, N. A., & Chan, V. S. L. (2021). The key criteria in deciding to tender for construction projects. International Journal of Integrated Engineering, 13(3), 229–235. https://doi.org/10.30880/ijie.2021.13.03.028
Chairul, M., Umanailo, B., & Hamid, I. (2019). Utilization of qualitative methods in research universities. In Proceedings of the International Conference on Industrial Engineering and Operations Management (pp. 2076–2081). IEOM Society International.
Chan, D. W. M., Chan, A. P. C., Lam, P. T. I., & Wong, J. M. W. (2011). An empirical survey of the motives and benefits of adopting guaranteed maximum price and target cost contracts in construction. International Journal of Project Management, 29(5), 577–590. https://doi.org/10.1016/j.ijproman.2010.04.002
Cheaitou, A., Larbi, R., & Al Housani, B. (2019). Decision making framework for tender evaluation and contractor selection in public organizations with risk considerations. Socio-Economic Planning Sciences, 68, 100620. https://doi.org/10.1016/j.seps.2018.02.007
Chisala, M. L. (2017). Quantitative bid or no-bid decision-support model for contractors. Journal of Construction Engineering and Management, 143, 4017088. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001407
De Schepper, S., Haezendonck, E., & Dooms, M. (2015). Understanding pre-contractual transaction costs for Public–Private Partnership infrastructure projects. International Journal of Project Management, 33(4), 932–946. https://doi.org/10.1016/j.ijproman.2014.10.015
Elhag, T. M. S., Boussabaine, A. H. & Ballal, T. M. A. (2005). Critical determinants of construction tendering costs: Quantity surveyors’ standpoint. International Journal of Project Management, 23(7), 538–545. https://doi.org/10.1016/j.ijproman.2005.04.002
Hassim, S., Muniandy, R., Alias, A. H., & Abdullah, P. (2018). Construction tender price estimation standardization (TPES) in Malaysia. Engineering, Construction and Architectural Management, 25(3), 443–457. https://doi.org/10.1108/ECAM-09-2016-0215
Heravi, A., Coffey, V., & Trigunarsyah, B. (2015). Evaluating the level of stakeholder involvement during the project planning processes of building projects. International Journal of Project Management, 33(5), 985–997. https://doi.org/10.1016/j.ijproman.2014.12.007
Hastie, J., Sutrisna, M., & Egbu, C. (2017). Modelling knowledge integration process in early contractor involvement procurement at tender stage – a Western Australian case study. Construction Innovation, 17(4), 429–456. https://doi.org/10.1108/CI-04-2016-0021
Hosny, H. E., Ibrahim, A. H., & Elmalt, A. E. (2019). Factors affecting quality of tender documents. Al-Azhar University Civil Engineering Research Magazine (CERM), 41(1), 346–355.
Jarkas, A. (2013). Primary factors influencing bid mark-up size decisions of general contractors in Kuwait. Journal of Financial Management of Property and Construction, 18(1), 53–75. https://doi.org/10.1108/13664381311305078
Jarkas, A., Mubarak, S. A., & Kadri, C. Y. (2014). Critical factors determining bid/no bid decisions of contractors in Qatar. Journal of Engineering Management, 30(4), 05014007. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000223
Khalifa, W. M. A., & Mahamid, I. (2019). Causes of change orders in construction projects. Engineering, Technology & Applied Science Research, 9(6), 4956–4961. https://doi.org/10.48084/etasr.3168
Krishna Rao, M. V., Kumar, V. S. S., & Kumar, P. R. (2018). Optimal contractor selection in construction industry: The fuzzy way. Journal of The Institution of Engineers, 99, 67–78. https://doi.org/10.1007/s40030-018-0271-1
Laryea, S. (2011). Quality of tender documents: case studies from the UK. Construction Management and Economics, 29(3), 275–286. https://doi.org/10.1080/01446193.2010.540019
Laryea, S., & Hughes, W. (2008). How contractors price risk in bids: theory and practice. Construction Management and Economics, 26(9), 911–924. https://doi.org/10.1080/01446190802317718
Laryea, S., & Hughes, W. (2011). Risk and price in the bidding process of contractors. Journal of Construction Engineering and Management, 137(4), 248–258. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000293
Laryea, S., & Lubbock, A. (2013). Tender pricing environment of subcontractors in the United Kingdom. Journal of Construction Engineering and Management, 140(1), 04013029. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000749
Liu, T., Wang, Y., & Wilkinson, S. (2016). Identifying critical factors affecting the effectiveness and efficiency of tendering processes in Public–Private Partnerships (PPPs): A comparative analysis of Australia and China. International Journal of Project Management, 34(4), 701–716. https://doi.org/10.1016/j.ijproman.2016.01.004
Lopez, R., & Love, P. E. D. (2012). Design errors in construction projects. Journal of Construction Engineering and Management, 138(5), 585–593. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000454
Love, P. E. D., Zhou, J., Matthews, J., Sing M. C. P., & Edwards, D. J. (2017). System information modelling in practice: Analysis of tender documentation quality in a mining mega-project. Automation in Construction, 84, 176–183. https://doi.org/10.1016/j.autcon.2017.08.034
Love, P. E. D., Ika, L. A., Ahiaga-Dagbui, D. D., Locatelli, G., & Sing, M. C. (2019). Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction. Production Planning & Control, 30(4), 285–298. https://doi.org/10.1080/09537287.2018.1535675
Low, W. W., Abdul-Rahman, H., & Zakaria, N. (2015). The impact of organizational culture on international bidding decisions: Malaysia context. International Journal of Project Management, 33, 917–931. https://doi.org/10.1016/j.ijproman.2014.10.010
Mbachu, J., & Cross, C. (2015). Key drivers of discrepancies between initial and final costs of construction projects in New Zealand. PM World Journal, 4(9), 1–13.
Mohammed, H. H., Ibrahim, A. H., & El-Malt, A. E. (2019). Assessment of tender documents quality index. American Journal of Civil Engineering and Architecture, 7(4), 172–180.
Olawale, Y., & Sun, M. (2015). Construction project control in the UK: Current practice, existing problems and recommendations for future improvement. International Journal of Project Management, 33(3), 623–637. https://doi.org/10.1016/j.ijproman.2014.10.003
Oltmann, S. (2016). Qualitative interviews: A methodological discussion of the interviewer and respondent contexts. Forum Qualitative Sozialforschung / Forum: Qualitative Social Research, 17(2). https://doi.org/10.17169/fqs-17.2.2551
Oyeyipo, O. O., Odusami, K. T., Ojelabi, R. A., & Afolabi, J. A. (2016). Factors affecting contractors’ bidding decisions for construction projects in Nigeria. Journal of Construction in Developing Countries, 21(2), 21–35. https://doi.org/10.21315/jcdc2016.21.2.2
Puri, D. & Tiwari, S. (2014). Evaluating the criteria for contractors’ selection and bid evaluation. International Journal of Engineering Science Invention, 3(7), 44–48.
Queirós, A., Faria, D., & Almeida, F. (2017). Strengths and limitations of qualitative and quantitative research methods. European Journal of Education Studies, 3(9), 369–386.
Reza Alavipour, S. M., & Arditi, D. (2018). Impact of contractor’s optimized financing cost on project bid price. International Journal of Project Management, 36(5), 808–818. https://doi.org/10.1016/j.ijproman.2018.03.001
Saaidin, S., Endut, I. R., Samah, S. A. A., & Ridzuan, A. R. M. (2017). Stakeholder’s perspective on risks allocation in design and build projects in Malaysia. In MATEC Web of Conferences (Vol. 103). EDP Sciences. https://doi.org/10.1051/matecconf/201710303009
Schuhmann, R., & Eichhorn, B. (2017). Reconsidering contract risk and contractual risk management. International Journal of Law and Management, 59(4), 504–521. https://doi.org/10.1108/IJLMA-02-2016-0023
Simon, L., Jefferies, M., Davis, P., & Newaz, M. T. (2020). Developing a theoretical success factor framework for the tendering phase of social infrastructure PPPs. International Journal of Construction Management, 20, 613–627. https://doi.org/10.1080/15623599.2020.1720343
Tan, Y., Shen, L., & Langston, C. (2010) Contractors’ competition strategies in bidding: Hong Kong study. Journal of Construction Engineering and Management, 136(10), 1069–1077. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000219
Tarhini, A., Ammar, H., Tarhini, T., & Masa’deh, R. (2015). Analysis of the critical success factors for enterprise resource planning implementation from stakeholders’ perspective: A systematic review. International Business Research, 8(4), 25–40. https://doi.org/10.5539/ibr.v8n4p25
Urquhart, S., & Whyte, A. (2018). Contractor tendering research: going beyond bid/no-bid and markup models. Management, Procurement and Law, 170(6), 255–262. https://doi.org/10.1680/jmapl.17.00039
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