A qualitative bidding model

Competitive bidding is one of the most critical activities for contractors in the construction industry. Contractors must first decide whether to bid or not and, if the bid decision was made, a suitable mark up percentage needs to be selected. The usual practice is to make these decisions on the basis of intuition derived from a mixture of gut feelings, experience and guesses. Numerous factors are involved in this process making it very difficult even for experienced contractors to always make the right decision within the available time. Thus it is necessary to have some type of structured solution for the bidding problem. Many models have been developed for the second part of the bidding problem, i.e. the mark up selection. However, very few publications can be found about the bid/no-bid decision, which should be made first before selecting a proper mark up. The development process of a qualitative bidding model is reported. First, the most important bidding criteria in Syria were identified and a parametric model was developed for each one. A new bidding situation was evaluated in terms of these criteria and a bidding index was produced for it. Based on this index, the model will recommend to bid or not to bid on the project under consideration. The proposed model was tested against one hundred and eighty two real bidding situations and proved 92.86% accurate in simulating the contractors' decisions.