How contractors take account of risk in the tender process: Theory and practice

Formal and analytical models that contractors can incorporate into the bidding process for pricing risk have been proposed by academic researchers in recent years. However, they are rarely used in practice. Some studies have elicted reasons for the low take-up of risk models by contractors but none has gone as far as examining what contractors actually do. Following an exploratory interview and documentary analysis study involving seven contractors in Ghana and five in the UK, four participant observation case studies were carried out in different construction firms where the whole tender process was shadowed to gain a better understanding of how contractors arrive at the bid price and how that price is influenced by the apportionment of risk.