A decision support tool for construction bidding

A reliable estimate of markup is essential for successful bid proposals. This paper presents a decision support model for construction bidding. The developed model can assist contractors in estimating markup, and owners and/or their agents in evaluating bid proposals. The model is generic and can be used as a tool to evaluate different alternatives in engineering, procurement, and construction. It utilizes the multi-attribute utility theory and the analytic hierarchy process and makes use of their advantages. Unlike models developed for similar purposes, the proposed model provides a decision support environment for the two functions; that is, estimating markup and evaluating bids. It also enables the user to construct the decision hierarchy that best suits his/her company's business environment and bidding strategy in a flexible manner. It accounts for the decision maker's attitude towards risk. Two numerical examples are presented to demonstrate the use and capabilities of the proposed model.