A multiagent system for negotiating construction bidding decisions

Competitive bidding is the most commonly adopted method to determine which contracting firm to be awarded a construction project. Depending upon the market condition and their existing workload, a contractor would have to make decisions on (i) bid or no bid; (ii) direct and indirect costs; and (iii) mark-up level. With the reliance on subcontracting system and the amount of materials involved in a construction project, decisions on the three crucial steps mentioned above cannot be made without first consulting and negotiating with the relevant S/Cs and suppliers. The problem is aggravated when various in-house departments participated in the decision making process. Careful negotiation on time, cost, resource allocation, quality standard, and so on during the bidding stage would, therefore, be paramount important as this could reduce the likelihood of disputes and project failure. Unfortunately, the negotiation process is normally carried out in a manual and unstructured manner. In an absence of time for thorough negotiation during the bidding stage, the results could be far from ideal. In this paper, The Multi-Agent System (MAS) approaches are applied to model the negotiation process during the bidding stage. The model (i) analyses the characteristics of negotiation at this process; (ii) identifies suitable problem to be solved; and (iii) selects the appropriate negotiation mechanisms for solving those problems. It is envisaged that, by adopting this distributed coordination methodology, the response time could be much reduced while the expected profit could be maximized.