Development of an improved construction bidding model incorporating multiple objective functions

The successful construction firm must be able to identify the optimal course of action in the bidding situation which satisfies in a balanced way the objectives of the firm, the risks associated with obtaining and undertaking contracts and the risks and consequences of not procuring particular contracts. Concepts from a number of disciplines are invoked to determine the important parameters of the bidding problem, the influence of various dynamic environments on the possible courses of action and the selection of the optimal solution. The construction bidding literature is classified and reviewed; the common shortcomings of the bidding strategies are highlighted; and the important elements of the bidding problem are identified and discussed. Two sets of data from Building and Civil Engineering jobs respectively are collected and analysed. A method of predicting a range for the number of competitors bidding for current projects is introduced and discussed. In the light of this work the desirable characteristics for a modified bidding model are identified and incorporated into a proposed bidding strategy which uses multiple objective functions, employs simulation techniques and requires a number of subjective inputs to produce an optimal range for the bid. A group of computer programs for the practical implementation of the proposed model are developed, presented and tested. The effect of accuracy of estimates on chances of winning a particular contract is discussed and proposals are made for further investigations in this and contiguous areas.