Analyzing bidding competitiveness and success rate of contractors competing for public construction projects

Abstract

Purpose The purpose of this paper is to analyze and evaluate bidding competitiveness and success rate of contractors bidding for public construction projects (PCPs). Additionally, this research determines the effect of work sector, contractor’s classification category (experience), project size and number of bidders on contractors’ bidding competitiveness, and the influence of work sector and classification category on their success rate. Design/methodology/approach The data were collected through 2,296 bidding attempts for 289 tender projects that were announced by the Government Tenders Department in Jordan between 2013 and 2016. The research uses bid competitiveness percentage (BCP) to evaluate contractors’ bidding competitiveness. Pearson correlation is used to investigate the correlation among variables. Hypothesis testing using ANOVA was conducted to evaluate the effect of the abovementioned factors on contractors’ bidding competitiveness, and their success rate. Findings The results of the analysis indicate that contractors’ average BCP and success rate in Jordanian PCPs are 83.8% and 13.3%, respectively. The analysis also reveals that work sector, contractor’s classification category, project size and number of bidders significantly affect contractors’ bidding competitiveness, whereas classification category and work sector do not affect bidding success rate. Therefore, experience of contractors affects their bidding competitiveness, but does not affect their success rate. Originality/value The present research uses contractors’ bidding success rate as a measure to evaluate their bidding competitiveness for PCPs. The novel model of this research can be applied in any country, after considering local regulations, to measure and evaluate contractors’ bidding competitiveness, and success rate when bidding for PCPs. Also, contractors cannot depend on their experience (i.e. classification category) or increasing bidding attempts to win bids and improve bidding success rate, rather than enhance their bidding strategy.