Modified price plus time bi-parameter bidding model incorporating float loss impact

Selecting the appropriate contractor is of paramount importance, especially for public agencies. Choosing a contractor based on the lowest price may not be the best approach as it may lead to delays and/or quality problems. The price plus time bidding system allows clients to choose contractors based on the total combined bid (TCB) after converting the time parameter into a monetary value. This proved to be successful in reducing project durations. However, as contractors compete using this method, they tend to reduce their project durations drastically to be competitive without thinking about the additional risks. Reducing project duration results in reducing the float available for non-critical activities and increases the risk of project delays. A modified price plus time bidding model is proposed. In addition to cost and time, a third parameter is added to form the TCB. This parameter is called float loss cost (FLC). Clients can use this modified model to evaluate the tenders submitted by bidders by converting the float loss to a monetary value. This encourages contractors to be more schedule conscious and increases the chances of timely project completion.